Few suppliers to big firms adopt emissions-reductions plans, despite growing pressure to do so to win contracts
SAO PAULO (Thomson Reuters Foundation) – Brazil’s private sector has a long way to go in adopting measures to reduce damage from climate change, a recent survey has found.
According to the 2012 Carbon Disclosure Project (CDP) Supply Chain Brazil programme, only 13 percent of the suppliers used by companies in the programme invested in action against greenhouse gas emissions in 2012.
The same survey shows that merely 13 percent of suppliers had specific goals for emissions reduction – a decline from the 23 percent reported in 2011 by the same research.
CDP Supply Chain Brazil is part of a global programme run by CDP, an international nongovernmental organisation that helps large companies engage their suppliers in adopting measures that help mitigate the effects of climate change.
Globally, 63 percent of the companies surveyed by CDP admit their earnings are at great risk because of climate change, either now or in the future. And 72 percent of them think their businesses are at physical risk from extreme weather, drought or rises in sea level because of climate change.
In Brazil, the programme works with seven of the country’s biggest companies including pulp and paper firms (Suzano and Fibria), a bank (Bradesco), a mining concern (Vale), an energy company (AES Eletropaulo), a polymer business (Braskem) and a food company (Marfrig). The survey included 202 businesses that supply these companies.
The research showed that even among the big partner companies, only 57 percent have adopted emissions cut goals themselves, and just 43 percent invested in reducing emissions last year.
LACK OF GLOBAL PLAN
The lack of commitment of private companies and their suppliers to reduce climate change effects can be seen mostly as a consequence of the difficulties faced by governments in reaching global goals for emission cuts, according to Saulo Rodrigues Pereira Filho, a professor in the Sustainable Development Centre at Brasília University.
U.N. climate negotiations, aimed at reducing the world’s climate-changing emissions, resume in Bonn this week. But progress remains far too slow to limit warming to 2 degrees Celsius or less, a level consistent with avoiding the worst impacts of climate change, experts said.
Already “the effects of such timid progress (in reducing the effects of climate change) is evident on people, especially in developing countries,” Pereira Filho said. Communities and economies are being hit with more intense and frequent droughts and floods, he said, which is “increasing our vulnerability.”
And “those who are to pay the highest price, as usual, are the poorer populations” who will see their housing, jobs, health, transportation and access to information affected, he said.
According to CDP’s director in Brazil, Fernando Figueiredo, the tepid level of response to climate change can be explained in part by uncertainties about regulation in sectors such as energy, where most Brazilian companies saw their profit forecasts drop in late 2012 after the federal government issued a provisional act reducing Brazilans’ lighting bills.
Figueredo says the survey’s 2012 results are “within expectations,” but he acknowledges there is a lot to be done to build environmental awareness.
“There is a difference between suppliers and the companies that are part of our programme,” Figueiredo said. “The latter are all in the stock market, with full business disclosure. The same doesn’t happen with all of their suppliers. Not all of them need to go so public.”
HOW TO EXERT PRESSURE
The challenge is to increase companies’ awareness of the influence they can exert, according to Figueiredo. “They need to incorporate concerns related to climate change and apply them in their business strategies, because it affects everybody without exception,” he added.
Figueiredo uses the finance sector as an example. Even though banks are not among the largest emitters of greenhouse gas, he says they can put pressure on many of their suppliers – such as manufacturers of armoured vehicles – to adopt climate change reduction measures.
“This is a change-inducing process in companies that don’t see this issue as a business strategy. They think climate change a business for big corporations. But if they are pressured by two or three of their clients, they’ll have to adapt,” he said.
AES Eletropaulo, a major power distributor in the state of São Paulo and a partner of GDP in Brazil, makes direct contact with each of its suppliers, so that they participate in the survey and adopt measures to mitigate climate change, according to the company’s environment manager, Sonia Hermsdorff.
“We want the suppliers to inform us of details like gas and energy consumption, or even the way they deal with taxi rides and plane trips. Little by little we make our point, so they know they can make a difference,” said Hermsdorff.
She acknowledges that most suppliers see climate change activities primarily as a way to ensure they get business from big companies.
“The more companies demand suppliers (have) emissions reduction programmes, the more they adopt them. But that’s all they see – a market opportunity,” said Hermsdorff. She hopes this will change in the future, with companies and suppliers understanding the risk that global warming represents to everyone – including their businesses.
A survey last year by the National Geographic Society and GlobeScan institute showed Brazilians to be the third most environmentally aware consumers in the world, behind Indians and Chinese. But CDP’s findings about companies in Brazil are reflected in Brazilians’ opinions about business.
Research released in 2012 by the country’s environment ministry showed that 55 percent of Brazilians consider businesspeople to have bad or very bad attitudes towards climate change – a worse score than the ones obtained by federal and local governments.
Rafael Spuldar is a journalist based in Sao Paulo.
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