McDonald’s and L’Oreal Join CDP’s Latest Green Supply Chain Push

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CDP has announced that its forest supply chain initiative has expanded with the addition of eight new corporates, including global brands L’Oréal and Johnson & Johnson.

The investor-backed environmental disclosure group said the companies would work with it to gather information from key suppliers detailing how they are tackling deforestation risks.

The companies signing up to the expanded initiative include McDonald’s Latin American franchise Arcos Dorados, Swiss fragrance company Firmenich, Brazilian meatpacker JBS, Brazilian paper producer Klabin, Canadian restaurant group Restaurant Brands International, and UK energy firm SSE.

Four companies – Arcos Dorados, Firmenich, Johnson & Johnson and L’Oréal – are already gathering information from their suppliers across three environmental areas of climate change, water, and forests.

CDP works with institutional investors to request information on environmental performance from listed companies. However, in recent years it has branched out to also work with multinationals to request information from their suppliers on the environmental risks and opportunities they face.

The group said that companies could face significant environmental risks in their supply chains, with firms disclosing to CDP revealing that nearly a quarter of their revenues depend on the four commodities responsible for most tropical forest loss – cattle, timber, palm oil and soy.

As such deforestation represents a significant business risk, with a 2016 CDP analysis revealing as much as $906bn in annual turnover could be at stake.

“Ending deforestation will be fundamental to global efforts to prevent dangerous climate change,” said Dexter Galvin, head of supply chain at CDP. “With such a large proportion of company revenues attached to commodities in their supply chain that are driving deforestation, this is now a critical business issue.

“Supply chains are like rows of dominoes: if unsustainable commodities enter the top of a supply chain, the effects will cascade throughout. Collaboration with suppliers is therefore essential for companies to reduce their exposure to deforestation and meet their zero deforestation targets – which makes sense for the bottom line and the planet.”