Sprint Should Consider Dropping Most Carbon-Intensive Suppliers, Report Says

by | Mar 17, 2011

Sprint Nextel should consider setting carbon reduction targets for suppliers, and possibly retender contracts with the worst performers, according to a report produced for the company by consultants Trucost.

Trucost’s report on Sprint’s scope 3 greenhouse gas (GHG) emissions (pdf) said that a realistic target for the telecoms companies’ suppliers would be for each to lower carbon emissions to the average for its sector. If the five highest-emitting sectors were successful in meeting this goal, Sprint Nextel would reduce its absolute supply chain emissions by 13.5 percent, Trucost said.

“Sector average environmental performance is a realistic and achievable target for your suppliers and is something that will help drive a continuous improvement cycle,” the report said.

The report found that manufacturing is the most carbon intensive supplier sector, accounting for 83 percent of Sprint suppliers’ total carbon emissions and 67 percent of carbon expenditure. That sector also saw the biggest variation between the best and worst performers. In information, transportation and warehousing, professional, scientific and technical services, and other sectors, suppliers are performing very close to the sector average, Trucost said.

In most of these sectors, Sprint can move the worst performers to the sector average by educating suppliers about carbon footprints, the report said. In manufacturing, the best approach may be retendering to suppliers with an average or below average carbon footprint, Trucost said.

The report said that the top five Sprint suppliers contribute to 58 percent of the total carbon footprint of the supply chain and the top 50 suppliers contribute to the vast majority, accounting for over 94 percent of the total carbon. But only seven percent of the suppliers’ carbon cost is generated by them directly, with the remaining 93 percent coming from suppliers of suppliers.

The greenhouse gas (GHG) emissions from the Sprint Nextel supply chain amount to 2,082,983 tonnes of CO2 equivalent, with a total cost of $74,175,0302.

This represents around 0.55 percent of Sprint’s total expenditure in its supply chain.

The carbon price represents the environmental and social cost of emitting one tonne of carbon, Trucost said. It is the theoretical cost which companies in Sprint’s supply chain could be liable for if an emissions trading scheme or tax comes into force.

Sprint suppliers’ carbon intensity was 154 tonnes of CO2e per million dollars of expenditure. The report said that this compares favorably to that of companies in many other industries. It is lower than that of a facilities management company, clothing retailer, aircraft parts manufacturer, university, national public agency and a local government in London, and slightly higher than that of a television broadcaster and public hospital.

Sprint’s supply chain consists of 162 suppliers, of which 34 companies, with a combined expenditure of $9.5 billion, verified their emissions with Trucost and had their data included in its report. These companies account for around 81 percent of Sprint’s supply chain emissions.

Last year Sprint announced that it was rolling out a scorecard for its supply chain, requiring that phones be made of sustainable materials, and be manufactured and packaged sustainably.

Comment: Reducing Scope 3 Carbon Emissions

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