The number of companies forging ahead with an industry-leading approach to tackling emissions in the supply chain has doubled in a year, according to new research by CDP, the non-profit global environmental disclosure platform, with analysis provided by McKinsey & Company.

CDP has awarded 58 companies – out of a total of +3,300 – a place on its second annual Supplier Engagement leader board, double the 29 identified in 2017. The leaders are announced as more companies than ever before are looking at water security in their supply chains – leading to a 15% rise in suppliers disclosing water data to their customers through CDP in 2017.

The number of supply chain members requesting their suppliers to report water information has reached a new high this year, with nearly 1,500 suppliers disclosing water data through the CDP supply chain program, out of 4,850 companies that were engaged. In addition, 58% of all responding suppliers report integrating water risk management into their business strategies, while 62% report company-wide water-related targets.

The number of suppliers awarded the highest score for their water disclosure also rose, with 41 suppliers figuring on the Supplier Water A List in 2017, highlighting companies that have taken an active approach towards water stewardship.

The leaders – which include Bank of America, BT Group, Nestlé, Panasonic, Rolls Royce, Société Générale, Tokyo Gas Co. and Unilever – have been recognized for their work with suppliers to reduce emissions and lower environmental risks in the supply chain.

Closing the Gap: Scaling up sustainable supply chain practices, CDP’s Global Supply Chain Report 2018, is based on climate, water and deforestation-related data collected from 4,872 supplying companies across global supply chains at the request of 99 of the world’s largest purchasing organizations.

Wielding a combined purchasing power in excess of US$3 trillion, these organizations include Accenture, BT Group, Cisco, KMPG UK and Philips Lighting.

Last week’s discussions at Davos concerning international trade and the World Economic Forum’s recently published Global Risks Report 2018 – which confirmed environmental risks as the most significant facing humanity – have all highlighted the importance of addressing supply chains when tackling environmental challenges. This is especially significant because greenhouse gas emissions located in the supply chain are on average four times higher than those arising from direct operations.

“Delivering on the ambitions of the Paris Agreement will require businesses to play a key role to reduce emissions, manage water resources and limit deforestation within their operations and their supply chains,” commented Patricia Espinosa, Executive Secretary, United Nations Framework Convention on Climate Change, who has written the foreword in the report.

The report shows that over three quarters (76%) of suppliers responding to CDP have identified some inherent climate change risks to their business and more than half (52%) report that they have integrated climate change into their business strategy.

The report includes a global analysis, as well as a market-by-market comparison of eight major economies. The economies of Brazil, China, France, Germany, India, Japan, the UK and the USA were identified as the major markets most relevant to the purchasing organizations working with CDP, and as where CDP had sufficient data. The report looked more closely into the eight major economies to compare how well-prepared suppliers are to mitigate environmental risk. It found that suppliers in some countries are taking a clear lead, while others are lagging behind:

In 2017, CDP collected data on behalf of 99 Supply Chain members from: 4,858 companies responding to the climate change questions within the CDP supply chain questionnaire; 1,452 responding to the water questions; and 88 responding to the forests questions. This represents data across 51 different industry groups/segments and 86 different countries. The total number of companies invited to participate were 9,139 for the climate questionnaire, 4,850 for the water questionnaire, and 244 for the forests questionnaire.

Over 6,300 companies with some 55% of global market capitalization disclosed environmental data through CDP in 2017, in addition to more than 500 cities and 100 states and regions who disclosed.

Click here to download the CDP’s Global Supply Chain Report 2018 Closing the Gap: Scaling up sustainable supply chain practices