The way companies evaluate total cost of ownership (TCO) is reaching a tipping point, according to a new CDP report entitled “A Paradigm Shift in Total Cost of Ownership.” As more and more major purchasers—including the U.S. military—look to cut their environmental costs, sustainability is being embedded throughout the value chain and factored into purchasing decisions. Greater environmental accountability, better management of resources and a broader definition of costs are driving purchasers to look outside their walls and hardwire sustainability into the value chain. Some of the world’s largest purchasers are encouraging key suppliers to calculate and disclose their environmental impacts in order to identify opportunities to create resource- and energy-efficient products, and capitalize on the shift to a low-carbon economy. Through CDP’s supply chain program, 89 purchasing organizations with $2.7 trillion in collective annual spend use CDP’s globally recognized environmental reporting platform to engage with over 8,200 strategic suppliers on greenhouse gas management and water risk mitigation.
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