Green action now part of leading global firms: Carbon Disclosure Project

The Economic Times , Thursday, September 15, 2011
Correspondent : AGENCIES

MUMBAI: The 2011 annual CDP Global 500 report, published on Wednesday, reported for the first time in the 10 years since the survey begun more than two-thirds (68%) of leading global businesses have embedded climate change actions in their business strategies, a 20% jump on 2010.

The CDP Global 500 report, which examines carbon reduction activities at the world's largest public corporations, also found 45% of companies are now reducing and reporting reductions in their greenhouse gas emissions, a marked increase on last year when it was just 19%. The PwC, which carried out the research on behalf of CDP, attributed the rises to growing board-level awareness of the link between energy efficiency and increased profitability. The report was released simultaneously in 10 cities around the world including Mumbai via Telepresence, a video conferencing technology to cut emissions from travel. The other cities include London, New York, Sao Paulo and Berlin.

In the report a correlation was also established between higher stock market performance over time, and representation on CDP's Carbon Performance Leadership Index (CPLI) and the Carbon Disclosure Leadership Index (CDLI). Companies with a strategic focus on climate change provided investors with approximately double the average total return of the Global 500 from January 2005 to May 2011.

"The improved financial performance of companies with high carbon performance is a clear indicator that it makes good business sense to manage and reduce carbon emissions. This is a win win for business - the short ROIs many emissions reducing activities have, can help increase profitability, says Paul Simpson, CEO of the Carbon Disclosure Project.

"Today's investors have different information needs, which are leading to tougher verification regimes, more emphasis on executive and staffing responsibilities and incentives, and much more unforgiving examinations of the contribution of business to society," Alan McGill, partner, sustainability and climate change, PwC said.

According to the CDP report, 93% of top firms now have board or senior executive oversight for climate change, up from 85 per cent in 2010, while 62% have board level responsibilities and monetary incentives for achieving climate change strategy. In terms of sectors, today's report shows the utilities sector has the best average climate change performance, but the energy sector has the lowest proportion of companies setting targets (55 per cent) and is underrepresented in both the CDLI and CPLI. Telecommunications is the only sector not represented in the CPLI this year, a finding PwC described as "surprising" given the sector's expected role in supporting emissions reduction activities.

There were 14 new entrants to the 2011 CPLI. They include UK entrants British American Tobacco, BG Group and Glaxo SmithKline.

Other key findings from CDP's Global 500 report

* 74% of Global 500 respondents reported emissions reduction targets, up from 65% in 2010

* The majority of respondents (93%) reported board or senior executive oversight for climate change (up from 85% in 2010) demonstrating the importance of climate change as a management issue

* Over 30 new companies targeted by CDP's Carbon Action request* (see notes to editor) have now set reduction targets, implying growing recognition by companies of the commercial benefits of emissions target setting

* Utilities is the sector with the best average climate change performance (band B)

* Telecommunications is the only sector not represented in the CPLI this year; a surprising finding given expectation that this sector will support emissions reduction activities

* The Energy sector lags others sectors with the lowest proportion of companies setting targets (55%) and underrepresentation in both the CDLI and CPLI

* Just 37% of respondents currently verify their emissions to acceptable standards, despite the importance of providing investors with validated climate data

The top 10 best performing companies on both measures this year are:

USA: Bank of America, Cisco Systems

Japan: Honda Motor Company, Sony Corporation

Germany: Bayer, BMW, SAP

United Kingdom: Tesco

Netherlands: Philips Electronics

Australia: Westpac Banking Corporation

There are 14 new entrants to the 2011 Carbon Performance Leadership Index, which counts just 29 companies due to more demanding criteria applied by CDP. These are:

USA: Air Products & Chemicals, Lockheed Martin, Morgan Stanley

Japan: Honda Motor Company, Sony Corporation

Germany: SAP

France: AXA Group, Schneider Electric

Italy: ENEL, FIAT

United Kingdom: British American Tobacco, BG Group, Glaxo SmithKline

Switzerland: Novartis

 
SOURCE : http://economictimes.indiatimes.com/environment/developmental-issues/green-action-now-part-of-leading-global-firms-carbon-disclosure-project/articleshow/9981998.cms
 


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