CITI index and CATI index show that the scale of green procurement in the supply chain upstream is insufficient
The 2024 Green Supply Chain CITI evaluation shows that more Chinese and foreign companies are expanding environmental management upstream of the supply chain, encouraging suppliers to fulfill their main responsibilities for ecological and environmental protection, and reducing environmental impacts and carbon footprints. The score in the 2024 Supply Chain Climate Action CATI Index evaluation is still low, and the scale of green procurement in industries such as automobiles and construction is not enough to drive the accelerated decarbonization of upstream carbon-intensive industries such as steel and aluminum. The Center for Public Environmental Research (IPE) recently released its annual report on the CITI Index and CATI Index in Beijing, showing the above conclusions.
The 2024 CITI and CATI index evaluation covers 780 Chinese and foreign companies in 23 industries, including Inditex, Adidas, Levi Strauss Co., Nike and Puma lead the green supply chain CITI index; Adidas, Foxconn, Puma, Lixun Precision and Apple rank among the top 5 supply chain climate action CATI index. Brands such as Dell, Primark and Cisco also entered the top 10 in the two indices. Among the enterprises in Greater China, Pengding Holdings, Anta Sports, Huawei, etc. also rank among the first phalanx. A number of industry core suppliers, including Lixun Precision, Pengding Holdings, and Kesen Technology, have also established relatively complete green supply chain management systems to drive their own industrial chains to coordinate green and low-carbon transformation.
CITI index shows: Leading Chinese and foreign companies promote actual emission reductions by upstream suppliers
In order to evaluate the company's performance in responding to the severe "triple global crises" of global climate change, biodiversity loss and environmental pollution, IPE has included biodiversity protection, new pollutant control, and plastic pollution control in this green supply chain CITI index, and plans to gradually refine and expand it.
This evaluation shows that 70% of companies disclosed information on chemical use, water resources or other natural resources, pollutant emissions, packaging and plastic use. Some of these leading companies have expanded the scope of data disclosure into the value chain and publicly committed to reducing water consumption, preventing and reducing waste generation, recycling waste, and reducing the use of raw plastics.
Faced with the severe climate situation, Chinese and foreign companies have accelerated their climate actions, and the number of companies that publicly disclose their climate commitments, organizational and product carbon footprints, and full value chain climate goals has increased significantly. Among them, the number of companies that disclosed greenhouse gas emissions in Scope 12 (own operations) and Scope 3 (value chain) increased by 13% and 15% respectively year-on-year compared with the 2023 evaluation period. 127 companies in 20 industries, including the "three new products" of photovoltaics, new energy vehicles, and lithium batteries, calculated and disclosed the carbon footprint data of their main products.
Factor-level carbon data accounting and disclosure are of great significance to promoting brands to implement supply chain emission reductions. Under the active promotion of Adidas, Foxconn, Puma, Lixun Precision, Cisco, Dell, Nike and other companies, 2836 suppliers disclosed carbon emission data through the Azure Map website, a year-on-year increase of 27.5% compared with the 2023 evaluation period. The total annual disclosure is 55.01 million tons of carbon dioxide equivalent. Apple, Samsung and other companies have clearly stated the requirements for supplier factory-level carbon accounting and carbon management in public written documents such as the Supplier Code of Conduct.
Driven by Chinese and foreign brands, 890 suppliers have set absolute emission reduction targets, a year-on-year increase of 37.6%, and committed emission reductions totaling approximately 6.46 million tons of carbon dioxide equivalent, more than twice the promised emission reductions in 2023, showing that more suppliers are driven by chain owners to increase their greenhouse gas emission reduction ambitions.
This evaluation found that the above-mentioned promotion by leading Chinese and foreign companies has begun to translate into actual emission reductions by suppliers. Analysis from 1590 suppliers that disclosed carbon data for two consecutive years shows that their total carbon emissions have dropped by 5.02 million tons. Among suppliers 'many emission reduction measures, clean energy substitution accounts for the highest proportion, indicating that the scale of renewable energy in China has significantly increased and has played an important supporting role in decarbonization of the supply chain.
"The green procurement requirements of leading Chinese and foreign companies have promoted a decline in carbon emissions in supply chains. However, to cope with the increasingly severe global ecological environment and climate challenges, more industry leaders are needed to strengthen coordinated emission reduction with upstream supply chains." Ma Jun, director of IPE, said.
The CATI index shows that many automotive industry companies have not yet effectively carried out supply chain emission reduction actions
This issue of the Supply Chain Climate Action CATI Index has developed an industry-specific climate action CATI index for enterprises in the automobile industry, and carried out collaborative carbon reduction research on the automotive-steel and aluminum industry chain. By comparing the climate action performance of 51 Chinese and foreign automobile companies, and analyzing the product carbon footprints of various mainstream models, it is found that while the automobile industry is undergoing a low-carbon transformation, it is necessary and necessary to focus on the production and manufacturing stage of raw materials such as steel and aluminum smelting. Carbon emissions encourage and drive the steel and aluminum smelting industry chains to coordinate the implementation of energy conservation and emission reduction measures to reduce carbon emissions in the production of raw materials such as steel and aluminum smelting.
Despite this, most participating companies still score low in the evaluation of the Climate Action CATI Index. Many companies that have made clear Scope 3 carbon neutrality commitments have not yet effectively carried out supply chain emission reduction actions, especially in industries such as automobiles and construction. The scale of green procurement is not enough to accelerate the decarbonization of upstream carbon-intensive industries such as steel and aluminum.
During this evaluation period, climate scientists issued a clear warning that more boundaries related to the earth's home are at risk of being breached. The evaluation report recommends that companies enhance their sense of urgency, learn from the best practices of leading companies, strengthen environmental information and carbon data disclosure, and encourage and drive supply chain emission reductions. The report also recommends that companies pay attention to their own and supply chain performance in biodiversity protection, toxic chemicals and new pollutants control, plastic pollution control, etc., and incorporate these issues into sustainable development strategies.
In addition, the evaluation report also recommends that all sectors of society pay more attention to the performance of enterprises 'green supply chains, improve information disclosure mechanisms, conduct scientific evaluations based on data, build restraint and incentive mechanisms, and consolidate the supply chain management responsibilities of leading enterprises in various industries, and use technological innovation, Digital technology and green finance empower suppliers to transform green and low-carbon, jointly build an environment-and climate-friendly, ecologically sustainable global supply chain, and work together to protect the earth's homeland.
The 2024 Green Supply Chain and Climate Action Forum is co-sponsored by IPE and the Heinrich Burr Foundation (Germany) Beijing Representative Office. This is the 11th consecutive year that IPE has released the annual report on the Green Supply Chain CITI Index, and it is also the seventh consecutive year that IPE has carried out the annual evaluation of the Supply Chain Climate Action Index.
