Global Program to Cut Energy Use Launched

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A new collaboration, launched today by CDP and the Institute for Industrial Productivity, will help reduce the energy used by the supply chains of some of the world’s biggest multinationals.

The value of using supply chains to drive change cannot be underestimated.

Six of the world’s biggest multinational companies will endeavor to increase energy efficiency across their supply chains through Action Exchange, a collaborative international project launched today. The companies participating in the first phase of the project are the Bank of America, L’Oreal, PepsiCo, Philips, Vodafone and Walmart.

The Action Exchange project is being implemented by CDP, the leading NGO providing the only global environmental disclosure system, in partnership with the Institute for Industrial Productivity (IIP) and the University of Minnesota. It will provide participating firms and their suppliers with tools and expertise designed to cut greenhouse gas emissions and improve their competitiveness.

IIP, an international NGO that specializes in industrial energy efficiency, says the value of using supply chains to drive change cannot be underestimated.

“Around 40 to 60 percent of a manufacturing company’s carbon footprint comes from its supply chain, but this number can be as high as 80 percent. These numbers could be significantly reduced through better energy efficiency practices,” says Jigar V. Shah, IIP’s Executive Director.

As part of Action Exchange, IIP will work with participating firms to help them improve energy efficiency in their supply chains by conducting assessments in suppliers’ facilities. As energy efficiency brings a host of other benefits, these companies can also expect to improve their profitability, productivity and competitiveness in the process.

The six firms participating in the first phase of the three-year project will lead the way for other companies to follow, as part of CDP’s groundbreaking project to enable suppliers to reap targeted cost and emissions reductions benefits.

According to CDP’s report, 'Collaborative Action on Climate Risk', also released today, almost three quarters of companies responding to their survey identified a current or future risk related to climate change. Despite this, investment in emissions reductions programs was reported to be going down, with regulatory issues stated as the major cause.

IIP says that, while firms have a key role to play in driving emissions reductions, governments also need to better regulate greenhouse gas emissions if real change is to occur.

“While some governments are taking action through regulation, it is out of proportion to the size of the task. The fact is that collective progress is not happening quickly enough to spur the transition to a clean energy economy. And each year that the status quo persists, the challenge becomes greater. Action Exchange will go some way to overcoming the barriers for firms but more collaborative action needs to be taken,” Dr Shah says.

The Action Exchange Project bears no cost for participating firms. It is being generously supported by the ClimateWorks Foundation and the Energy Foundation.

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