Big green brands have dirty supplier secrets: CDP

Almost half of the global big brands with green ambitions are not aware of the carbon impacts of their supply chain, according to a report published on Thursday by non-profit CDP.

Only half of the suppliers of more than 200 global companies - including Unilever, Nike, and Alphabet - had targets to reduce emissions in 2021, Bloomberg reported citing the CDP study.

"It's not like the suppliers are racing to set any emission-trimming objectives. Almost none of the targets set by suppliers have been vetted by the Science-Based Targets initiative, an arbiter of corporate climate plans."

At the current average pace, it would take at least another decade to get the remaining 5,000 suppliers reporting to the CDP to create any kind of climate playbook.

Meanwhile, the CDP report noted that the brands rarely look beyond their own emissions, even though their complex supply networks can emit over 11 times more greenhouse gas than their own operations. This means the 207 companies reporting to the CDP may seem to be on track to achieve their net-zero goals while buying $5.5 trillion worth of goods and services from dirty sources.

Those suppliers, which worked together with brands on climate plans, mapped out initiatives to trim CO2 emissions by 231 million tons - about the same as the annual footprint of Pakistan - in 2021, according to the Global Carbon Project.

As companies fall over themselves to set goals to reach net-zero emissions within decades, they are struggling to draw a plan for the full scope of their emissions.

Reportedly, the suppliers' carbon impact defined as Scope 3 emissions in carbon accounts is typically many times larger than the company's direct emissions, called Scope 1 and 2.

"Our data show that corporate environmental ambition is still far from being ambitious enough," said Sonya Bhonsle, global head of value chains at CDP, in a statement. "Alongside that, companies have blinkers on when it comes to assessing their indirect impacts and engaging with suppliers to reduce them."

The environmental impact goes beyond greenhouse gas emissions. Sourcing commodities from areas vulnerable to deforestation is another area of concern. Still, over half of traders, manufacturers and retailers engage beyond first-tier suppliers to combat this.

The situation also is dire when it comes to risks like flooding and water scarcity. Only 16% of companies work with suppliers to manage water security.

Carbon Disclosure Project (CDP) is an international non-profit organisation that helps companies and cities disclose their environmental impact with aim to make environmental reporting and risk management a business norm while driving disclosure, insight, and action towards a sustainable economy.