Suppliers that don't manage CO2 could lose clients

Suppliers that fail to manage their greenhouse gas emissions could lose clients, said a report published on Monday.

Some 56 percent of large firms would in the future deselect suppliers for failing to meet criteria on managing carbon emissions, according to a survey by the Carbon Disclosure Project (CDP).

The CDP Supply Chain report said that six percent of its members, which include Google, Dell, PepsiCo and Cadbury, would today stop doing business with suppliers that did not manage their carbon.

This is no longer a 'nice to have' for leaders, it is becoming a 'need to have' and we expect to see this trend growing across the whole business sector, said the CDP's head Paul Dickinson.

In the survey, CDP Supply Chain's 44 member companies reached out to 1,402 of their suppliers. Over half of the suppliers responded, while 7 percent declined and 42 percent did not respond.

Only 20 percent of the companies reported figures for supply chain emissions. That compares to around 90 percent that have both an established strategy to engage suppliers on climate change and a board-level executive responsible for environmental affairs.

It makes good business sense for us to work with suppliers who understand how climate change is impacting their business and manage these issues properly, said Brad Minnis, a director at Juniper Networks.

U.S. securities regulators last week nudged companies toward disclosing risks associated with climate change in their annual reports.

In a 3-2 vote, a divided SEC heeded investors' calls and suggested that companies have a responsibility to discuss the effects of the environment and pending rules on their business.

(Reporting by Michael Szabo; Editing by William Hardy)