Executive Briefings

Many Suppliers to Top Companies Acknowledge Risk of Climate Shock, But Fail to Prepare for It

Goldman Sachs Group Inc., Coca-Cola Co. and 73 other companies that together buy more than $2tr of goods and services are unprepared for climate shocks because suppliers are ignoring requests for data on their exposure to rising temperatures and climate regulation.

Many Suppliers to Top Companies Acknowledge Risk of Climate Shock, But Fail to Prepare for It

Almost half of the 7,879 main suppliers to 75 companies, including General Motors Co., Microsoft Corp. and Wal-Mart Stores Inc., failed to respond to requests for data on managing climate risk, according to a report by non-profit organizations CDP, formerly known as the Carbon Disclosure Project, and BSR, a sustainability consultant.

Many large companies pledged to take measures to address climate change to contribute to a United Nations climate agreement between 195 nations sealed last month in Paris. While they’re setting targets to cut their own fossil-fuel pollution, the report shows their suppliers, which are responsible for as much as four times as much greenhouse gas emissions, are out of sync.

Only 4,005 suppliers, about 51 percent of those asked, provided data on their climate risk management, water risks or carbon emissions. Of those which did respond, 72 percent said climate change risks could significantly impact their operations, sales or costs. Nearly two-thirds said climate policies, such as carbon taxes, posed a risk to their business.

But less than half of respondents set a target to cut carbon emissions and only 34 percent reduced emissions in the past year.

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Almost half of the 7,879 main suppliers to 75 companies, including General Motors Co., Microsoft Corp. and Wal-Mart Stores Inc., failed to respond to requests for data on managing climate risk, according to a report by non-profit organizations CDP, formerly known as the Carbon Disclosure Project, and BSR, a sustainability consultant.

Many large companies pledged to take measures to address climate change to contribute to a United Nations climate agreement between 195 nations sealed last month in Paris. While they’re setting targets to cut their own fossil-fuel pollution, the report shows their suppliers, which are responsible for as much as four times as much greenhouse gas emissions, are out of sync.

Only 4,005 suppliers, about 51 percent of those asked, provided data on their climate risk management, water risks or carbon emissions. Of those which did respond, 72 percent said climate change risks could significantly impact their operations, sales or costs. Nearly two-thirds said climate policies, such as carbon taxes, posed a risk to their business.

But less than half of respondents set a target to cut carbon emissions and only 34 percent reduced emissions in the past year.

Read Full Article

Many Suppliers to Top Companies Acknowledge Risk of Climate Shock, But Fail to Prepare for It