Supply Chain Report with CDP

2013-2014
Collaborative Action on Climate Risk
Video Transcript

Hi, Im Gary Hanifan and Im the

global lead for Accentures Sustainable
Supply Chain practice. Id like to take a
moment and share some key findings
from the 2014 CDP Supply Chain
Program Research initiative. This year,
a record 2,898 companies participated
in the CDP supply chain program.
They are responsible for around 18%
of global industrial emissions, and
the data they disclosed through the
program can be an unparalleled source
of information about climate change
risk throughout the corporate world.
Today, I will share 3 major findings
from our analysis.
First, companies have become
cautious about investing in emissions
reductions and the monetary value
generated from those initiatives has
decreased.
Overall, investment by the
responding companies to reduce
their carbon emissions seems to
have stalled with the average
spend falling 11% year on year.
Seven of the 10 sectors covered
report investment falling from 2011
or 2010 levels, or from both. They
are also increasingly focusing on
investments with shorter pay-back
periods, which tend to deliver only
incremental benefits. And while
the performance of the 64 member
companies continues to improve,
they are leaving their suppliers
behind. For example, 34% of
members have set both absolute and
intensity-based emissions targets,
up from 33% last year. For suppliers,
the figure is 7%, up from 5% in
2012.
All this is leading to poorer
outcomes. The monetary value
generated by emissions reduction
investments made by participants
this year came to $11.5 billion,
down from $13.5 billion last
year. This is largely because the
regulatory signals seem to be less
clear. In many parts of the world,
policymakers appear to be less
focused on climate change and
sustainability, as they grapple with
near-term economic issues.

Second, the pressure to change is

growing.
The climate science for reducing
emissions is becoming increasingly
compelling. Almost three-quarters
of participants identified a current
or future risk which is related to
climate change, and that has the
potential to significantly affect their
business or revenues. In addition,
more than half of participating
companies say their consumers are
becoming more concerned about
climate change, and more receptive
to low-carbon products and services.
In fact, 85% of these say consumer
behavior is already changing, or will
do so within the next five years.
We think this indicates that
regulation for change will soon
catch up to the global situation, and
companies will need to move fast in
response.
Third, substantial emission reductions
and monetary savings can be found in
existing supply chains.
This year, our work with CDP
has primarily focused on helping
companies decide how to prioritize
their sustainability investments
and capture this value. We have
mined the data to discover how
companies can best improve their
own sustainability performance, and
that of their supply chain partners.
We have looked at where emissions
are concentrated in the supply
chain, and we have analyzed which
supply chains are most likely to
deliver a return on investment, both
in terms of emissions reductions and
potential financial returns.
Here is what we found, whether
companies are starting out on the
journey, or have taken their first
steps towards addressing supply
chain sustainability, a three-stage
process should be followed:

The first stage is to Assess the scope

of their climate and sustainability
exposure, and determine the
opportunities that are available.
Organizations that are serious
about sustainability will position
climate change firmly within their
strategic vision. The data the CDP
supply chain program has collected
can help companies understand
where they are now, and help
them identify points in their supply
chains where scarce resources can
best be deployed to help improve
sustainability performance.
The second stage is to Collaborate
with supply chain partners to
help reduce risk and exploit
opportunities. Collaborating with
suppliers and consumers helps drive
corporate emissions reductions
and, monetary savings from
emission reduction initiatives. Those
companies that engage with two or
more suppliers, consumers or other
partners are both twice as likely
to see a financial return from their
emission reduction investments, and
twice as likely to reduce emissions.
The third stage is to Motivate
employees to help ensure
sustainability objectives are
prioritized. Performance can be
enhanced by engaging a higher
number of corporate functions in
the supply chain effort. Companies
which involved more than
four functions in supply chain
sustainability were, compared with
companies involving fewer than
four, almost twice as likely to deliver
annual emissions reductions and
four times more likely to generate
monetary savings.
I hope that the work Accenture has
done with CDP, and the insights that
work has generated, will help to make
the case for investment in supply
chain sustainability, and help to make
each of those investments count.

About Accenture
Accenture is a global management
consulting, technology services
and outsourcing company, with
approximately 281,000 people serving
clients in more than 120 countries.
Combining unparalleled experience,
comprehensive capabilities across
all industries and business functions,
and extensive research on the worlds
most successful companies, Accenture
collaborates with clients to help them
become high-performance businesses
and governments. The company
generated net revenues of US$28.6
billion for the fiscal year ended Aug.
31, 2013. Its home page is www.
accenture.com.

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