U.S. Companies Face Challenges Tackling Supply Chain Emissions
Supply chain emissions are a continuing challenge for U.S. businesses that have committed to climate change action, according to a post last month on the Business for Social Responsibility blog.
“For most companies operating within global value chains, the pull and push of climate action also comes from abroad, and many U.S. companies now understand the potential to demonstrate global leadership through climate action,” writes BSR staffer Emilie Prattico. But “addressing supply chain climate impacts is a necessary step for companies with ambitious climate strategies and commitments. That’s because, compared with direct emissions in a company’s own operations, the average ratio of indirect emissions in the supply chain is 4 to 1.”
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Prattico points to a continuing challenge in translating the need into action—only 34% of the suppliers that report their operational emissions are decreasing them, and another 36% say they have insufficient data to report progress. While a couple of big companies, notably Walmart and GM, have had some success prompting their supply chains to action, others are farther back in the process.
“U.S. companies aspiring to become climate leaders in the global economy have an opportunity to improve their suppliers’ action, pulling more companies along on the path toward a thriving, clean economy,” she writes.
Alongside the “pull” of supply chain partners, Prattico says businesses are also facing a growing “push” from China as it continues to assert its new role as global climate leader.
“China is now the biggest investor in renewable energy,” she writes, and “climate activity is likely to push U.S. companies toward more ambitious action. The licence for doing business in China may soon include strong environmental performance and ambitious climate action. American companies will have the choice either to align with China’s new climate leadership or, better yet, surpass it. If American companies don’t align, the United States may lose its current position as the climate leader operating through global value chains,” an outcome that would weaken the country’s competitiveness on the world stage.