Supply Chain Climate Action Report: Leading companies still need to strengthen coordinated emission reduction with upstream supply chains

On October 31, the Center for Public Environmental Research (IPE) released the annual report on the Green Supply Chain CITI Index and the Supply Chain Climate Action CATI Index in Beijing.

The report shows that leading Chinese and foreign companies have reduced supply chain emissions through green procurement. 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.

The report recommends that companies should strengthen environmental information and carbon data disclosure to encourage and drive supply chain emission reductions. At the same time, they should also pay attention to their own and supply chain's efforts to protect biodiversity, control of toxic chemicals and new pollutants, and control of plastic pollution, and incorporate the above issues into sustainable development strategies.

New pollutant management and information disclosure significantly lag behind traditional pollutants

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.

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 five supply chain climate action CATI index. Brands such as Dell, Primark, and Cisco also entered the top ten in the two indices.

Among enterprises in Greater China, Pengding Holdings, Anta Sports, Huawei, Lenovo Group, Li Ning, LONGi Green Energy, Vitasoy, Kesen Technology, Geely Automobile, Hang Lung Real Estate, Asus, etc. also ranked first.

CITI evaluation shows that more Chinese and foreign companies are expanding environmental management upstream of the supply chain, including Foxconn, Lixun Precision, Pengding Holdings, Kesen Technology, Schaeffler, Shenzhou International, Dextar, Lifeng, Jingyuan International, etc. Industry suppliers have established a green supply chain management system to drive their own industrial chains to coordinate green and low-carbon transformation.

In order to evaluate companies 'performance in responding to the severe "triple global crises" of global climate change, biodiversity loss and environmental pollution, IPE includes indicators such as biodiversity protection, new pollutant control, and plastic pollution control in this green supply chain CITI index.

The evaluation shows that 70% of companies have disclosed information on chemical use, water or other natural resource use, 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. Resource consumption, prevention and reduction of waste generation, recycling waste, reducing the use of raw plastics, etc.

However, the evaluation believes that companies 'management and information disclosure of new pollutants significantly lag behind traditional pollutants. In industries that widely use plastic packaging such as retail, daily chemical, food and beverage, less than 30% of companies disclose plastics-related data, and less than half of companies in various industries have set plastics-related targets. Most companies need to raise their attention to plastic pollution issues. and action.

More suppliers are increasing their greenhouse gas emission reduction ambitions driven by chain owners

In the face of the climate crisis, Chinese and foreign companies have accelerated their climate actions and publicly disclosed their climate commitments.

The evaluation shows that 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.

"Brand companies 'Scope 3 emissions related to supply chains are 26 times their own emissions. If the entire supply chain can move towards a low-carbon green transformation, it can contribute more to global climate governance." Ma Jun, director of IPE, said.

The accounting and disclosure of factory-level carbon data is of great significance to promoting brands to implement supply chain emission reductions. With the active promotion of brand companies, 2836 suppliers have disclosed carbon emission data through the Azure Map website, a year-on-year increase of 27.5% compared with the 2023 evaluation period, and the total annual disclosure is 55.01 million tons of carbon dioxide equivalent. Another 890 suppliers have set absolute emission reduction targets, a year-on-year increase of 37.6%, and committed a total emission reduction of approximately 6.46 million tons of carbon dioxide equivalent, more than twice the emission reduction commitment in 2023.

The above-mentioned promotion by leading Chinese and foreign companies has been translated 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 evaluation report recommends improving the information disclosure mechanism, allowing all sectors of society to conduct scientific evaluations based on data, build a constraint and incentive mechanism, consolidate the supply chain management responsibilities of leading enterprises in various industries, and empower suppliers to be green and low-carbon with technological innovation, digital technology and green finance. Transform, jointly build an environmentally-and climate-friendly, ecologically sustainable global supply chain, and protect the earth's homeland.