CDP Highlights Water and Plastic Threats in Global Supply Chains

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by | Apr 9, 2024

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CDP is shedding light once more on significant environmental concerns: plastic pollution and water security. In two just-released reports, CDP delves into more than 3,000 companies’ disclosures, providing insights into how they deal with challenges and demonstrating a clear need for more robust, comprehensive strategies to mitigate risks associated with plastics and water within global supply chains.

The Plastic Conundrum: Risks and Responses

Plastic pollution remains a persistent, escalating crisis, posing substantial environmental, health, and financial risks. In an unprecedented disclosure, nearly 3,000 companies with a collective market capitalization surpassing US$25 trillion reported on their plastic usage through the CDP. While almost half of these companies have taken the crucial first step of mapping where plastics are produced and utilized in their value chains, a mere 21% acknowledged the risks tied to their plastic-related activities.

Only a third are taking essential actions, such as assessing their plastic use’s environmental and health impacts.

These findings highlight a gap in corporate action and understanding regarding the plastic crisis. Despite the good intentions, the data reveals that a significant portion of the business world has yet to fully engage with the realities of plastic pollution.

This lack of engagement is especially prevalent among sectors with considerable plastic footprints, such as food and beverage, retail, and apparel, which will likely encounter direct risks, including regulatory changes, supply chain disruptions, and waste management costs.

Water Security: A Flow of Challenges and Opportunities

Turning to water security, the CDP’s comprehensive analysis based on responses from more than 3,000 large companies paints a mixed picture. Half of the respondents say they actively engage their supply chains on water risk; a deeper dive into their strategies reveals a patchwork of commitment and action levels.

Only 14% of companies offer financial incentives to senior leaders for water management improvements, suggesting a gap between awareness and tangible action.

The water crisis threatens not just the environment but the economic fabric of our global society, with an estimated $77 billion at risk due to water-related challenges in supply chains. Yet, many companies, particularly in high-impact sectors such as agriculture, manufacturing, and transportation, still need to be more engaged in addressing water security with their suppliers.

Bridging the Gaps: The Path Forward

Plastic pollution and water security challenges demand a coordinated, comprehensive response from the corporate sector. Both issues highlight the interconnectedness of environmental sustainability and corporate resilience, underscoring the necessity for companies to adopt a more integrated approach to ecological disclosure and action.

Enhanced Disclosure and Transparency: The call for mandatory corporate disclosure on plastics, supported by 37 influential companies, including Stella McCartney and Unilever, mirrors the need for increased transparency across all aspects of environmental impact, including water use and security. Effective disclosure requires not just sharing data but ensuring its accuracy and relevance to prevent the dilution of genuine sustainability efforts. This calls for stringent verification processes and an ethical commitment to truth in environmental reporting, combating greenwashing by highlighting tangible, verifiable actions over mere claims of sustainability.

Strategic Engagement and Collaboration: Companies must move beyond risk assessment to actively engage their supply chains in mitigating plastic and water-related impacts. They should be setting clear targets, incentivizing sustainable practices, and collaborating on innovative solutions that address these challenges at their source.

Policy and Regulatory Advocacy: As negotiations for the Global Plastics Treaty continue, businesses must advocate for and support policy measures that enforce greater environmental stewardship. Water security should be championed as a critical component of sustainable business practices, with companies playing a proactive role in shaping policies that ensure the sustainable management and protection of water resources.

The CDP reports clearly demonstrate more needs to be done. The global business community must intensify its efforts to tackle plastic pollution and water security. The journey ahead is complex, but through collaborative action, enhanced transparency, and strategic innovation, each company has a role in turning these environmental challenges into opportunities for resilience, sustainability, and growth.

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