• Retail giants are stepping up on supply chain sustainability.
  • Target Corp and Tesco have joined Walmart in collecting data from suppliers to reduce environmental risk and cut carbon emissions in the supply chain. 
  • Ten years after CDP started collecting supply chain data, 115 businesses – representing a combined annual spend of more than US$3.3 trillion – are now requesting data from over 11,500 suppliers.
115 businesses – representing a combined annual spend of more than US$3.3 trillion – are now requesting data from over 11,500 suppliers

115 businesses – representing a combined annual spend of more than US$3.3 trillion – are now requesting data from over 11,500 suppliers

US department store retailer Target Corp and UK supermarket group Tesco have joined Walmart in collecting data from suppliers to reduce environmental risk and cut carbon emissions in the supply chain.  

Retail giants are stepping up on supply chain sustainability, according to the latest figures from global environmental impact non-profit CDP.

The leadership shown by the retail sector is part of a wider surge of action from private and public-sector organisations, harnessing their purchasing power to tackle climate change, deforestation and water security, the organisation says.

Ten years after CDP started collecting supply chain data on behalf of the world's largest purchasing organisations, 115 businesses – representing a combined annual spend of more than US$3.3 trillion – are now requesting data from over 11,500 suppliers. This is more than a 15% increase from last year when 99 organisations requested data.

"With emissions in the supply chain on average around four times greater than those from a company's direct operations – and rising to up to seven times greater for retailers and consumer-facing companies – large multinational corporations cannot comprehensively address their environmental impact without looking to their supply chains," explains Sonya Bhonsle, head of supply chain at CDP.

"It's very encouraging to see so many of the world's biggest buyers taking supply chain sustainability seriously. By requesting data from their suppliers, they are shining a light on the risks hidden deep within their production chains – and uncovering a myriad of opportunities for reducing their overall environmental footprint, boosting innovation and cutting costs."

The rise in companies scrutinising their supply chains coincides with growing momentum behind the take-up of science-based targets – goals that allow companies to reduce their emissions in line with the decarbonisation required to keep global temperature increase below two degrees Celsius, the central aim of the Paris Agreement.

The Science Based Targets initiative (SBTi), which helps companies develop and approves such targets, requires companies to set scope 3 targets if their scope 3 emissions account for at least 40% of their total emissions. For global retailers that do not manufacture many of the products they sell, scope 3 emissions in their supply chain can be far greater than 40%.

Ariane Grazian, senior manager of sustainability at Walmart, which has been requesting data from its suppliers for ten years, says while the retailer is proud of the improvements its made in reducing our own emissions, it still aims to do more.

"That's why Walmart is working with CDP, our suppliers and others on Project Gigaton – an approved science-based target initiative aimed at avoiding a gigaton (one billion metric tons) of emissions from the global value chain by 2030," she explains. "Walmart is collaborating with CDP's supply chain program to accelerate action and track suppliers' progress toward Project Gigaton. In year one, Project Gigaton has helped inspire action that has led to the avoidance of 20 million metric tons of emissions and has expanded into China and the UK with participation from over 400 suppliers with operations in over 30 countries."

Meanwhile, the future of Target's business depends on taking care of the resources we have today, according to the retailer's vice president of corporate responsibility, Jennifer Silberman. "We are constantly working to find more environmentally friendly ways to bring guests the products they want," she says.

"We have been reporting our own emissions to CDP since 2012, and will now seek this data from key Target suppliers to better support them in achieving greater efficiency, investments in innovation and sustainable choices. As Target puts the needs of people, communities and the planet at the heart of how we work today, to build a better tomorrow, we are confident this new work with CDP will be a catalyst for change across the industry."

While suppliers' carbon emissions have long been on the radar of companies working with CDP, a surge of interest in deforestation and water security sees a growing number of purchasing organisations also engaging with strategic suppliers on their impacts on forests and water.

In 2017, companies reported a total of 3,770 water risks via CDP – risks that threaten their license to operate, their ability to grow and the security of their supply chains.

In addition, with up to US$941bn of turnover in publicly listed companies dependent on commodities linked to deforestation, the number of organisations leveraging their purchasing power to achieve deforestation-free commodity supply chains has doubled from seven to 14 in just a year.