Executive Briefings

What Supply-Chain Executives Must Know About Carbon Disclosure

Chrystina Gastelum, senior account manager with the Carbon Disclosure Project, outlines the initiative's mission, and talks about the importance of developing a standardized method for reporting on greenhouse gas and carbon emissions across global supply chains.

The mission of the Carbon Disclosure Project is to drive action on climate change, says Gastelum. The initiative provides a framework for businesses to report on their greenhouse gas emissions, along with related strategies, risks and opportunities for improvement. The CDP serves as a single source of information for all interested parties.

Carbon accounting typically falls into three categories, or "scopes," covering emissions from a company's direct activities, the electricity that it purchases, and the output from its entire supply chain. Some businesses are well along in reporting emissions in all three areas, while others have further to go, Gastelum says.

The CDP stems from efforts by 551 institutional investors, representing $71tr in assets, to obtain information on climate change from public corporations. The ultimate goal is to include partners all the way up and down the chain. Businesses with mature reporting processes are asking their suppliers the same kind of information that they themselves are providing. According to Gastelum, between 50 and 80 percent of a company's total emissions come from outside its own organization. "To ignore it would be irresponsible," she says.

The movement toward total carbon disclosure has evolved significantly over the last decade, Gastelum says. Previous efforts were confined to departmental "silos," with little attention paid to the larger picture. "We're now seeing procurement organizations taking sustainability very seriously," she says. "Externalities are becoming internalized. We're seeing actual structural changes in procurement departments."

The new push for disclosure can lead to some tension in customer-supplier relationships, she acknowledges. Often the discussion must progress in stages, as suppliers begin to understand the definition of a carbon footprint, and their own contribution to it. Once the basics are put into place, suppliers engage in deeper discussions with customers about innovative ways to control and reduce emissions, Gastelum says.

To view video in its entirety, click here

Chrystina Gastelum, senior account manager with the Carbon Disclosure Project, outlines the initiative's mission, and talks about the importance of developing a standardized method for reporting on greenhouse gas and carbon emissions across global supply chains.

The mission of the Carbon Disclosure Project is to drive action on climate change, says Gastelum. The initiative provides a framework for businesses to report on their greenhouse gas emissions, along with related strategies, risks and opportunities for improvement. The CDP serves as a single source of information for all interested parties.

Carbon accounting typically falls into three categories, or "scopes," covering emissions from a company's direct activities, the electricity that it purchases, and the output from its entire supply chain. Some businesses are well along in reporting emissions in all three areas, while others have further to go, Gastelum says.

The CDP stems from efforts by 551 institutional investors, representing $71tr in assets, to obtain information on climate change from public corporations. The ultimate goal is to include partners all the way up and down the chain. Businesses with mature reporting processes are asking their suppliers the same kind of information that they themselves are providing. According to Gastelum, between 50 and 80 percent of a company's total emissions come from outside its own organization. "To ignore it would be irresponsible," she says.

The movement toward total carbon disclosure has evolved significantly over the last decade, Gastelum says. Previous efforts were confined to departmental "silos," with little attention paid to the larger picture. "We're now seeing procurement organizations taking sustainability very seriously," she says. "Externalities are becoming internalized. We're seeing actual structural changes in procurement departments."

The new push for disclosure can lead to some tension in customer-supplier relationships, she acknowledges. Often the discussion must progress in stages, as suppliers begin to understand the definition of a carbon footprint, and their own contribution to it. Once the basics are put into place, suppliers engage in deeper discussions with customers about innovative ways to control and reduce emissions, Gastelum says.

To view video in its entirety, click here