Dive Brief:

• CDP, a nonprofit environmental research firm working with institutional investors and governments, says it will start rating companies by how they manage carbon emissions and climate change across their supply chains.
• The group plans to issue an annual report starting in January 2017 focusing on companies that take action to reduce emissions and lower climate-related hazards in the supply chain. Subsequent reports will note companies failing to handle these issues.
• Supply chains account for up to four times the amount of greenhouse gas emissions of a company's direct operations, CDP says. The group, which aims to increase buyer engagement to accelerate action on supply chain emissions, also released its methodology for rating companies.

Dive Insight:

CDP previously reported that companies could cut greenhouse gases globally by 3.7 billion metric tons of CO2 a year by 2030 as a result five key business initiatives. The initiatives include opposing commodity-driven deforestation, doubling energy productivity, accelerating development of low-carbon technologies, including science-based emission targets and committing to 100% renewable energy, 

Kellogg, for example, has lowered carbon emissions by 14 percent per metric ton of food produced since 2005 and engaged suppliers to help them cut emissions in half by 2050, according to the emission-monitoring agency.

However, such commitments require companies to evaluate the energy consumption or greenhouse gas emissions throughout their entire supply chains, as opposed to a single plant or office. Previously, companies looking for such evaluations would go to CDP: over 8,300 suppliers have been evaluated by the NGO.

With the released methodology, though, companies can provide the CDP survey to their suppliers (adding a step of work) and rank them independently. In addition, CDP's January ranking will spotlight those companies who have been most active in building a sustainable supply chain.