CDP, formerly the Carbon Disclosure Project, has announced that it will begin rating companies on their handling of greenhouse gas emissions in their supply chains. CDP already rates companies on their internal greenhouse gas mitigation efforts, in addition to its main service as a platform for disclosing emissions.
This new ratings project is a natural next step for the organization. Supply chains are the source of four times the amount of emissions of internal company operations. With nearly a hundred businesses already reporting supplier-related data to the CDP, the basic framework for the ratings system is already in place. The methodology will include governance, ambition, measurement and supplier engagement.
CDP has stated that it will credit the highest performers in its annual CDP supply chain report. It also plans to start naming the worst performers after a few years. Dexter Galvin, head of the non-profit’s supply chain program said “By shining a light on whether companies are taking responsibility for the emissions hidden in their supply chains, we hope to spur on the laggards and drive a race to the top.”
How companies will react to this new development is unclear. The reaction will probably be largely positive, as those disclosing data to the CDP are likely confident about their performance. However, public sustainability ratings are still an emerging trend. Regardless, this project is sure to get the attention of leaders in impacted businesses.