The Carbon Disclosure Project (CDP), a collaboration of over 315 institutional investors, including Goldman Sachs, Merrill Lynch, Allianz and HSBC, is now working with some of the world's largest companies to help them assess greenhouse gas (GHG) emissions through their supply chains.

CDP has teamed up with some of the largest purchasing global organizations under the CDP Supply Chain Leadership Collaboration (SCLC). New corporate members include Dell, HP, L'Oreal, PepsiCo, and Reckitt Benckiser. They join original members Cadbury Schweppes, Imperial Tobacco, Nestlé, Procter & Gamble, Tesco and Unilever announced in October 2007. CDP is working with these global companies and their suppliers to create one single standardized approach to provide key climate change information throughout their supply chains.

Each member of the Supply Chain Leadership Collaboration has selected up to 50 suppliers to work with them and to respond to the CDP pilot information request in the first quarter of 2008. The results of the pilot will refine the process in preparation for the roll out and will help customers and suppliers to work together to develop strategies to reduce their carbon footprints. Some members will work with suppliers at national level, others will work internationally.

The project will be rolled out in May 2008, and CDP is inviting more companies to join the Supply Chain Leadership Collaboration. This will broaden both the geographical and sectoral scope, and potentially bring tens of thousands of new suppliers into the CDP process and extend disclosure globally. A report will be produced on the findings.

The CDP information request gathers detailed information on companies' supply chains. It encourages suppliers to report carbon footprints and climate change-relevant information, such as greenhouse gas emissions data, emissions reduction targets and climate change strategy. This is the first scheme that allows corporations to assess the emissions through their supply chain using one single standardized methodology. This will vastly decrease the burden on suppliers who might otherwise receive several separate requests for similar information.

Key sectors which are represented in member supply chains include agriculture, chemicals, transportation, buildings management, packaging and electronic components, and this is the first time CDP will collect climate change relevant information from private companies and Small and Medium Enterprises (SMEs). The Supply Chain Leadership Collaboration will bring some of the world's largest privately owned companies into the CDP system. It is also an important step to moving the CDP process into China, where a significant number of suppliers to large multinationals are based.

Adrian Gonzalez, ARC Advisory Group, commented, "Calculating the carbon footprint of a supply chain is a challenging task, especially if you have a multi-tiered global supply chain. How far back into their supply chains should companies go? Does Dell or HP, for example, have to track the carbon emissions involved in converting sand into silicon? And how do you get this data from vendors in places like Vietnam? Therefore, the work being done by the CDP and its member companies is an important step towards developing standard GHG measurement and reporting methodologies. I assume, and hope, the CDP is aligning its efforts with those of the standards community, specifically ISO (International Organization for Standardization), the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), who recently signed a Memorandum of Understanding under which they have agreed to jointly promote the ISO 14064 standards and the WRI and WBCSD GHG Protocol standards."
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