Summary
• The CDP collects and disseminates information relating to carbon emissions and climate change.
• The timber sector is failing to assess the business risk from carbon emissions.
• The latest CDP report focuses on central government procurement.
• Carbon data requests will become more common.
Risk management is fundamental to business management. Yet climate change risk and, more specifically, the business risk from carbon emissions, are not being widely assessed across the timber sector.
The Carbon Disclosure Project (CDP), launched in 2000, is a not-for-profit organisation that operates globally. CDP’s purpose is “to collect and distribute high quality information that motivates investors, corporations and governments to take action to prevent dangerous climate change”. Its investor members alone hold US$55 trillion in assets.
CDP’s emission measurement activities now extend to UK public sector procurement and suppliers to local and national government received its questionnaires for the first time last year. “Public sector procurement in the EU accounts for roughly 18% of GDP, or around e1.2 trillion in spend,” said Tom Carnac, head of CDP’s Public Procurement Programme.
“Private companies assess business risk relative to their bottom line. In the financial sector, risk management is defined by fiduciary responsibility. In the public sector, the concept of value for money (VFM) is central to assessment. Although under EU procurement rules, only supplier differentiators that directly relate to the operation of a contract can be deployed in assessment, the VFM weighting in tenders can help to encourage carbon emissions reduction,” said Mr Carnac.
“Our first Public Sector Procurement report in 2008 showed that our well-established assessments from the private sector could be adapted for public sector use. It also highlighted a need to increase public sector investment in skills and resources to analyse suppliers’ carbon data, and to create mechanisms to better utilise resulting information in local and national procurement.”
Central government procurement
CDP’s second Public Procurement report, launched just before the opening of the Copenhagen climate change summit, focuses on central government procurement. “It was decided to establish identical, robust supplier reporting and assessment systems across central government,” said Mr Carnac. “It would then be easier to roll out similar systems across the local government network. Fourteen government departments and agencies sent questionnaires to suppliers asking for emissions. The overall response rate attained was 60%: an excellent return.
“For 2009 we’ve adopted a new supplier ‘Organisational Carbon Appraisal’ format, developed by AEA, which allows public sector procurers to help suppliers by identifying areas for improvement. This approach also enables supplier companies to be rated against a sector average which, in turn, will give a baseline for developing future local government procurement and environmental strategies.
“To prevent suppliers receiving multiple questionnaires, each supplier was contacted by only one of the 14 departments and agencies involved. Supplier data was then analysed centrally and made available to all. This collaborative approach is informing plans for the 2010 data-gathering round, which will once again centre primarily on local authority supply chains,” said Mr Carnac.
From CDP’s experience in 2008, it emerged that local authorities need more dedicated resources to focus on carbon management, particularly when looking towards fulfilment of National Indicators 185 and 186 on emissions reporting. As an example, this summer Gloucestershire County Council appointed its first carbon management officer, and Tom Carnac believes that such appointments will rapidly increase across the UK.
Local authorities
“Local government is now obliged to report its operational emissions and the proportion of supplier emissions for which the authorities are responsible. Apportioning those emissions accurately still needs work, as carbon accounting is in its technical infancy.
“CDP is working with both national and local government to define processes and systems, ensuring that carbon measurement can reap its full potential in the VFM assessment process. We’ve found a clear correlation between carbon measurement and disclosure and enhanced efficiency, which contributes to the ‘triple bottom line’ of sustainability.”
Mr Carnac feels the timber sector should swiftly investigate the business benefits of carbon management: “Companies need to look through a different lens: those organisations able to respond will certainly reap benefits. There are plenty of agencies ready to help, amongst them the Energy Saving Trust and the Carbon Trust.
“Senior management in the timber sector should tackle carbon emissions with the same energy they’ve devoted to driving down illegal logging. There’s no sense in delaying carbon measurement until non-disclosure penalties are introduced.
“Big corporations already send CDP carbon questionnaires to their suppliers through CDP Supply Chain, the private sector equivalent of our Public Procurement Programme. I’d encourage leading timber companies to join CDP Supply Chain and work with suppliers to identify efficiencies, expose risk and reduce organisational impacts. Now that national and local government are doing the same, it will be a question of when, rather than if, carbon data requests come your way.”
