January 27, 2015

Suppliers in the United States, Brazil, China and India Least Resilient Against Climate Change Risks, Finds New Global Study from CDP and Accenture

NEW YORK; January 27, 2015 -- Lack of preparation currently leaves supply chains in Brazil, China, India and the United States more vulnerable to climate risks than those in Europe and Japan. However, suppliers in China and India deliver the greatest financial return on investment to reduce their greenhouse gas emissions and demonstrate the strongest appetite for collaboration across the value chain, according to research released today by CDP, the international NGO formerly called Carbon Disclosure Project, and Accenture (NYSE:ACN).

Supply chain sustainability revealed: a country comparison. CDP supply chain report 2014–15 the most comprehensive overview of the climate risks and opportunities that exist for supply chains globally. The new research, which also incorporates information from the United Nations’ World Risk Report*, is based on data collected from 3,396 companies on behalf of 66 multinational purchasers that work with CDP to better understand and manage the environmental impacts of their supply chains; they account for $1.3 trillion in procurement spend, and include organizations such as Nissan Motor Co. Ltd., and Unilever plc.

Analysis and scoring of suppliers’ climate change mitigation strategies, carbon emissions reporting, target setting, emission reduction initiatives, climate risk procedures, uptake of low-carbon energy, and water risk assessment efforts, as disclosed by suppliers to CDP, were used to create a sustainability risk/response matrix which offers a visual comparison of how well prepared suppliers across 11 major economies* are to mitigate and manage environmental risk in their supply chains.

“While climate and water risks are apparent, the implications for businesses and economies reliant on complex supply chain models are less understood,” said Paul Simpson, chief executive officer, CDP. “That multinationals are engaging with thousands of suppliers to better manage environmental challenges and opportunities is encouraging. These companies are catalyzing progress in response to global problems.”

Mr. Simpson added: “It is particularly exciting to see such a strong appetite for collaboration and superior financial returns on initiatives to reduce emissions from Chinese and Indian suppliers. This should attract investment, which in turn will drive greater action within these high emitting markets.”

“What is concerning is that, despite the increase in the number of companies assessing and reporting on their emissions, the data suggests that suppliers are making either marginal or no improvements in their development of sustainable supply chains capable of weathering climate risks and other natural disasters,” said Gary Hanifan, managing director, Accenture Strategy. “The good news is that as companies transform their supply chains into digital supply networks they will gain greater end-to-end visibility, traceability and access to information to report on their compliance progress and mitigate climate risks.”

The sustainability risk/response matrix reveals that:

The global picture, which is presented alongside the country-by-country analysis in the report, establishes some encouraging signs of global progress. Today, more organizations than ever assess and report to CDP about their environmental impact. The 3,396 companies that took part in the program this year represent a substantial increase of 40 percent in the past three years.

Further, the quantity and percentage of suppliers setting emissions targets, which is a crucial and advanced component of climate risk management, shows a steady upward trend: nearly half (48 percent) of the suppliers set targets last year, compared to 44 percent in 2013 and 39 percent in 2012. There has also been an increase in the number of suppliers achieving emissions reductions since 2012, with the percentage rising from 34 percent to 40 percent in 2014. As suppliers become more advanced at carbon management, the number of companies realizing monetary savings from their actions to reduce emissions mirrors the rising trajectory, jumping from 29 percent in 2012 to 33 percent in 2014.

Supply chain sustainability revealed: a country comparison. CDP supply chain report 2014–15 is available to view online today..

* United Nations University-Institute for Environment and Human Security, World Risk Report 2014. See www.ehs.unu.edu/file/get/11895.pdf

* The economies of Brazil, Canada, China, France, Germany, India, Italy, Japan, Spain, the UK and the US were identified as the major markets most relevant to the purchasing organizations working with CDP, and as where CDP had sufficient data. A global overview is presented alongside market-by-market analysis within the report.

About CDP
CDP, formerly Carbon Disclosure Project, is an international, not-for-profit organization providing the only global system for companies and cities to measure, disclose, manage and share vital environmental information. CDP works with market forces, including 767 institutional investors with assets of US$92 trillion, to motivate companies to disclose their impacts on the environment and natural resources and take action to reduce them. CDP now holds the largest collection globally of primary climate change, water and forest risk commodities information and puts these insights at the heart of strategic business, investment and policy decisions. Please visit www.cdp.net or follow us @CDP to find out more.

About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with approximately 319,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$30.0 billion for the fiscal year ended Aug. 31, 2014. Its home page is www.accenture.com.

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