The Carbon Disclosure Project (CDP), largest institutional investor collaboration on the business implications of climate change, published on September 14, 2005 a report drawing the main conclusions of its third information request on greenhouse gas emissions sent out to the chairmen of 500 of the biggest companies in the world earlier this year. The CDP issued this latest information request on behalf of 155 institutional investors with more than $21 trillion assets under management, including the ethos Investment Foundation.
The launch of these results follows the recent publication by another group of investors, the Institutional Investors Group on Climate Change, of a guide for pension funds on tackling climate change risk. Investors’ interest in the implications of climate change is therefore building momentum. As mentioned in the CDP3 report: “This increased interest from the investment community, coupled with a record high 71% disclosure rate to the CDP information request points to a continued elevation of climate change as a critical shareholder value issue in the minds of investors and corporations alike.”
This year, more than 70% of the 500 companies responded to the CDP information request, a jump from 59% in CDP2 and 47% in CDP1. Furthermore, more than 90% of the 354 responding companies flagged climate change as posing commercial risks and/or opportunities to their business.
In spite of these rejoicing numbers, the CDP3 highlights that the progress discussed should not obliterate the fact that there is still a long way to go. Indeed, despite the increase in numbers of corporations that are aware of climate change, CDP3 reveals a large gap between awareness and action:
- 54% of the 500 companies disclosed emissions data, but out of this number, the performance of only 30% could be accurately benchmarked year-to-year because of inconsistent data quality.
- In the period between CDP2 and CDP3 only 13% of the 500 companies reported a reduction in their absolute emissions, while 17% reported an increase.
- Only 51% of respondents have implemented emission reduction programs and only 45% have established emission reduction targets.
- Less than 35% report having taken early action in emissions trading.
With respect to Swiss companies, the number of respondents remains stable, with 10 companies out of the 12 contacted responding to the request. These are: ABB, Credit Suisse Group, Holcim, Nestlé, Novartis, Roche, Swiss Re, Swisscom, UBS, and Zurich Financial Services. Their responses are downloadable from the CDP’s website.
Copies of the CDP3 report, and corporate responses to the greenhouse gas emissions questionnaire are downloadable from the CDP’s website: www.cdproject.net www.cdproject.net
