CDP’s new supply chain report, Engaging the chain: driving speed and scale, analyzes environmental data disclosed through CDP in 2021 from 11,400+ corporate suppliers. According to the report:

• 56% of suppliers did not have any climate targets in 2021.
• Just 1 in every 40 suppliers have approved science-based targets.
• Progress is being made on direct environmental impacts with 71% of suppliers reporting reductions in their Scope 1 and 2 emissions.
• However, action is not cascading down the supply chain; only 38%, 47% and 16% of reporting companies are engaging with their suppliers on climate change, deforestation and water security, respectively.
• Over 200 major buyers worldwide with US$5.5 trillion in procurement spend requested 23,487 suppliers to disclose in 2021.

It is concerning that in 2021 – two years into the Decade of Action – only 2.5% of reporting suppliers have approved science-based targets. Released today, CDP’s latest supply chain report finds that more than half of suppliers (56%) did not have any climate targets at all. Additionally, only 28% of companies reported having a low-carbon transition plan in place to meet their climate goals.

The number of suppliers setting any climate targets increased on average 5% per year. CDP found that at the current pace, at least another decade is required to ensure that all suppliers reporting in 2021 set any climate target, let alone a science-based target.

Companies are insufficiently tracking Scope 3 emissions, despite value chain emissions being more than 11 times greater than emissions resulting from their own operations. Only 38% of disclosing companies engage with their suppliers on climate change, and this drops even further to 16% for water security. Just 47% of downstream companies – traders, manufacturers and retailers – are working beyond their first-tier suppliers to manage and mitigate deforestation risks.

Click here to access CDP's supply chain report.