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The Power of Transparency The Power of Transparency

Amanda Haworth WiklundGlobal Compact Nordic NetworkReykjavik, May 8th 2008

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• What is the Carbon Disclosure Project?

• How CDP moved from Investors to Supply Chain

• Supply Chain Leadership Collaboration

• The Story so far

• Why companies are engaging with their suppliers in a collaborative way

• What is it all about?

• How companies are using the process

• What’s next

• Q + A

Carbon Disclosure in the Supply Carbon Disclosure in the Supply ChainChain

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A global NGO with a mission to facilitate a rational response to climate change

A secretariat for 385 investors with assets of $57 trillion

Information requested from over 3000 companies (GHG protocol plus)

1,300 companies answered the questions in 2007

www.cdproject.net largest registry of corporate GHGs in the world

2007 expansions in US, Japan, UK, France, Germany, Canada, Brazil, India, Australia, Asia, South Africa, Scandinavia

Global launches with high profile speakers

CDP is now an established annual process

CDP is where the corporate world reports GHG emissions

The Carbon Disclosure Project (CDP)

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CDP – Collaboration and Co-ordinationCDP – Collaboration and Co-ordination

385 Investors

$57 trillion

3000Companies

CDP

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Highest response rate ever – 77% answered questionnaireNorth America leads growth in emissions disclosure

Improved carbon accounting; more robust responses - 79% disclosed GHG data

Dramatic rise in Scope 3 reporting

80% see risks from climate change

82% see opportunities

76% implemented emissions reductions programs

46% strategies for emissions trading

Wide variations in risk exposure – between and within sectors

CDP5 Key Findings 2007 (FT500 Companies)

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• Wal-Mart approached CDP in 2006 with the idea of using CDP process to engage with suppliers

• CDP and Wal-Mart carried out pilot project in 2007• 7 product groups

• 43 suppliers

• Lots of learning!

• CDP5 results showed• Big increase in scope 3 reporting

• Collective realisation that many risks and opportunities lay in the supply chain

• CDP launched Supply Chain Leadership Collaboration in October 2007

• Standard questionnaire to suppliers from CDP

• Will become annual process like investor CDP

• Massively extends scope of CDP • From 2000 to 200 000 companies in 3 years?

From investors to supply chainFrom investors to supply chain

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CDP – Collaboration and Co-ordinationCDP – Collaboration and Co-ordination

SCLC Members

Suppliers

CDP

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Launched in October 2007 at the London launch event 12 members at the start of the pilot project in December

Including Tesco, Unilever, Nestle, P+G, Dell, HP, Cadbury Schweppes

335 suppliers involved, many with more than one customer among the members

Only 35 of the suppliers had responded to CDP in the past – 90% first-timers

Pilot closed end Feb, report in April Early lessons

Asking the questions prompts new thinking and leads to change directly First timers struggle, capacity building needed Response rate expected to be similar to investor CDP, first time usually about 40%

but grows with each iteration Quality of supplier engagement from procuring organisation makes a big difference

SCLC – The story so farSCLC – The story so far

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• To accelerate understanding of waste in supply chains• Get the benefits faster

• To accelerate suppliers‘ understanding of the risks/opportunities

• Suppliers start to change as soon as they know the questions

• Innovate faster

• To demonstrate thought-leadership to stakeholders• Investors value forward thinking (supply chain engagement as element of future

leadership indices)

• Consumers value pioneer companies

• To identify risks/opportunities outside corporate boundaries• Better strategy formulation

• Earlier action on risks

• Earlier action on opportunities

SCLC – why companies become SCLC – why companies become members?members?

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• The same questionnaire as CDP6, with an additional section, exploring supplier capabilities and splitting emissions

• Members choose which suppliers are involved (up to 2000)

• Members provide CDP with supplier contact data

• CDP sends request for disclosure to suppliers

• Suppliers register and enter on line• 3 levels of disclosure – public, members, customers

• Members can see status of all suppliers on-line• Members cannot see who each others‘ suppliers are

• CDP sends reminders

• Members receive searchable database at end of disclosure

• CDP commissions report

What is involved in SCLCWhat is involved in SCLC

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• Letting suppliers know that this is a business issue

• Getting suppliers onto the learning journey NOW

• Identifying which suppliers are engaged on climate change

• Incorporating into vendor rating

• Targeting known hot-spots or key product lines

• Verifying product-footprinting projects

• Supporting scope 3 assessments

• Extending understanding of risks and opportunities

• Operationalising climate change management• From investor relations to procurement!

SCLC – how companies are using the SCLC – how companies are using the data (early view)data (early view)

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• CDP currently inviting all respondents to become SCLC members

• 27 members so far. Recent new members Carrefour, Johnson Controls, UK National Grid, Juniper Networks, Merrill Lynch, IBM, Kellogg’s, Johnson and Johnson, Colgate-Palmolive

• Extend success of CDP from investor community to supply chain

• Integrating disclosure into procurement will massively accelerate business action on climate change

• Private companies, SMEs, emerging markets

• One standardised disclosure process avoids duplication and therefore cost

• Recognise the learning journey – don‘t overwhelm suppliers

• SCLC to become annual process, in line with investor request

SCLC right now and the futureSCLC right now and the future

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Thank you

Carbon Disclosure Project

www.cdproject.net

Amanda Haworth Wiklund

amanda.haworth@cdproject.net

+46 8 31 42 06