Investors prepared to interrogate businesses on resource efficiency
29 November 2012, source edie newsroom
"Investors understand that sustainability is paying back to business" - CDP's Frances Way
Speaking at the Sustainable Brands Conference in London yesterday, the CDP's co-chief operating officer, Way, said those companies that are not incorporating sustainability into their strategies are likely to see investors move to those who do.
"We are working with 92 institutional investors, who are prepared to ask companies and highlight sectors to prove that they have carbon reduction targets, that they have made year on year reductions and they are investing in carbon emission and energy efficient activities," she said.
Way warned that investors are now prepared to take this data to engage directly with the management of a company and discuss future expectations.
"Investors understand that sustainability is paying back to business and they know that if companies are not investing in this their operating costs are actually higher than they should be".
According to Way, if a company is not investing in sustainable operations then shareholders could be wasting their money as the business is unlikely to make a profit.
"Companies should be thinking about this even if energy is not a big percentage of their operating costs".
Earlier this year, research published by the CDP found that while some companies are demonstrating an awareness of the strategic opportunities associated with acting on climate change, few are setting the necessary targets required to ensure their long-term resilience.
However, following increasing incidents of extreme weather events which disrupted business operations and supply chains around the world, climate change has climbed the boardroom agenda.
"With the hottest US summer on record, fires in Russia and flooding in the UK, Japan and Thailand, among other events, 81% of reporting companies now identify physical risk from climate change", it added.
The CDP said that companies are more likely to be successful at raising investment for emissions reduction activities with a long-term payback of three years or more, when they recognize that their climate change strategy gives them a competitive advantage.
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| at 30/11/2012 11:29:00|
Interesting article, but all a bit elitist, really - the bulk of businesses in the UK are SMEs who are not staying awake at night worrying about institutional investors.
We have worked with over 2,000 SMEs over the last two and a half years and have delivered carbon reduction results in our region by talking about real return on investment projects that positively affect the bottom line - these businesses have collectively spent over ?4.7 million in that period on projects that have helped to lower the CO2 footprint of the commercial sector in our region by just over 10%.
This is not rocket science - just dare to talk to the businesses that can (and have the willingness, motivation and ability to) make a difference instead of focusing on the companies that represent a minority of businesses in the UK (i.e. the non-SMEs) just because they create 'sexy' results due to their size. It will require more legwork and fewer meetings in plush boardrooms but it's where real, significant and measurable reductions can be achieved.
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