- Companies cutting their Scope 3 emissions have saved US$13.6 billion in costs
- Collaboration between buyers and suppliers has delivered 43 million tonnes of GHG savings – equivalent to Sweden’s annual emissions
- But only 15% of companies targeting value chain in climate action
(London, 25 September 2024): Supply chain climate risks remain an untapped resource for business with a potential $165 billion in financial reward to be gained from tackling Scope 3 emissions, according to figures released today by CDP, the world’s only independent environmental disclosure platform. CDP’s Strengthening the Chain: Industry insights to accelerate sustainable supply chain transformation, published in collaboration with HSBC, unearths the financial opportunities that come from tackling emissions across the entire value chain.
Companies that actively manage supply chain emissions have saved US$13.6 billion, demonstrating that ambitious climate action enhances business efficiency. Investing in reducing upstream climate risks can also deliver substantial financial gain for corporates, with nearly US$165 billion in potential benefits, almost double the US$94 billion required to realize these opportunities.
Leading companies are already making strides. In 2023, engagement between corporate buyers and their suppliers resulted in 43 million tonnes of emissions reductions – equivalent to more than Sweden’s annual emissions.[1] Over 5,500 suppliers are collaborating with buyers through CDP Supply Chain, with the potential to cut an additional 193 million tonnes of emissions.
CDP’s analysis, drawn from data disclosed by over 23,000 companies worth two thirds of global market capitalization, underscores that addressing scope 3 emissions is crucial to mitigating climate risk, with US$162 billion in potential costs raised by disclosing companies. On average, corporate supply chain emissions are 26 times greater than direct operational emissions.
However, despite the business case for greater engagement with suppliers on emissions, a majority of companies are failing to capitalize on these opportunities and risk being exposed to hidden costs and future regulatory pressures. Supply chain emissions remain a blind spot for many companies as only 15% are targeting their supply chains with emission reduction initiatives, omitting a vast majority of a company’s carbon footprint.
Simon Fischweicher, Director of Supply Chain and Reporter Services, CDP, said:
“Our data tells a very clear story: efficiency, competitiveness and ambitious climate action go hand-in-hand. Yes, climate change presents an undeniable risk to businesses and global supply chains, but it also offers a significant opportunity for those willing to act. These findings make clear that companies embracing transparency and addressing supply chain emissions are not only reducing climate risks but realizing financial gains. Those capitalizing not only improve their resilience, but increase attractiveness to customers and investors, improving their competitive positioning in the market. Put simply, measuring and managing supply emissions make business sense. Those that fail to act will be left behind.”
Marissa Adams, Americas Head of Global Trade Solutions, HSBC, said:
“Working with our clients to help mitigate a variety of risks within their supply chain operations is at the core of what HSBC Global Trade Solutions offers. The findings of CDP’s report reinforce the need for companies to consider climate risk and the associated financial and environmental benefits of addressing supply chain emissions solutions. Recognizing the role finance can play decarbonizing global trade flows and supply chains, HSBC provides unique solutions which enable our corporate clients to tackle emissions reduction throughout their value chain. Findings from the report give a clear indication that corporates will only further enhance the focus on efficiency within their supply chains, and HSBC’s position as the World’s Leading Trade Bank enables us to help corporates to de-risk, improve supply chain resiliency, and capture opportunities in the new economy.”
-Ends-
Notes to editor
For more information, or exclusive interviews, please contact:
- Elvis Moyo, Media & Spokesperson Engagement Manager, [email protected]
About CDP:
CDP is a global non-profit that runs the world’s environmental disclosure system for companies, cities, states and regions. Founded in 2000 and working with more than 700 financial institutions with over $142 trillion in assets, CDP pioneered using capital markets and corporate procurement to motivate companies to disclose their environmental impacts, and to reduce greenhouse gas emissions, safeguard water resources and protect forests. Over 24,000 organizations around the world disclosed data through CDP in 2023, with more than 23,000 companies – including listed companies worth two thirds global market capitalization - and over 1,100 cities, states and regions. Fully TCFD aligned, CDP holds the largest environmental database in the world, and CDP scores are widely used to drive investment and procurement decisions towards a zero carbon, sustainable and resilient economy. CDP is a founding member of the Science Based Targets initiative, We Mean Business Coalition, The Investor Agenda and the Net Zero Asset Managers initiative. Visit cdp.net or follow us @CDP to find out more.
About HSBC:
HSBC Holdings plc, the parent company of HSBC, is headquartered in London. HSBC serves customers worldwide from offices in 60 countries and territories. With assets of US$2,975bn at 30 June 2024, HSBC is one of the world’s largest banking and financial services organizations.
HSBC Bank USA, National Association (HSBC Bank USA, N.A.) serves customers through Wealth and Personal Banking, Commercial Banking, Private Banking, Global Banking, and Markets and Securities Services. Deposit products are offered by HSBC Bank USA, N.A., Member FDIC. It operates Wealth Centers in: California; Washington, D.C.; Florida; New Jersey; New York; Virginia; and Washington. HSBC Bank USA, N.A. is the principal subsidiary of HSBC USA Inc., a wholly-owned subsidiary of HSBC North America Holdings Inc.
[1] Source: https://ourworldindata.org/co2-emissions