CDP: Businesses failing to capture financial gains from environmental performance

Major telecommunications and consumer goods firms are failing to capture financial value from strong environmental performance, according to research, despite almost $500bn in disclosed value at stake.

A new report from CDP, Accenture and Hermes Investment Management shows that four in 10 of these firms have not yet quantified the potential value, while climate risks with known impacts of at least $700bn remain “poorly understood and under-quantified”. This is despite almost 70% of investors reporting that CSR strategies help manage volatility, the research claims.

“We see this as a huge missed opportunity for companies,” said Accenture Strategy managing director Justin Keeble. “Reporting on financial value through environmental performance allows businesses to build investor trust, provide meaningful transparency and help ensure long-term profitability.”

‘Sound business sense’

The report calls for businesses to identify opportunities and set achievement goals, pursue quick successes that demonstrate robust financial and environmental value creation, and apply financial capabilities to capture environmental opportunities and show investors a resilient business.

“The bottom line is that environmental performance improvement makes sound business sense, “said CDP chief executive Paul Simpson. “By recognizing the tangible business and financial benefits of disclosure and action, companies can drive sustainable economies and secure long-term growth.” 

There is a swelling body of evidence that shows that measuring value from strong environmental performance results in healthier finances. Indeed, only last month it was revealed that global clean energy stocks had surged past investments in fossil fuels in the past year.

BT, which earlier this week set itself a new science-based target to reduce emissions by 2030, also revealed that its consumer operations and products that contribute to carbon savings now represent 22% of the company’s annual revenue and are worth £5.3bn.

Samsung breaks ties with deforester

In related news, South Korean firm Samsung has declared that it will no longer pursue a business venture with Indonesian conglomerate Korindo, after widespread news coverage uncovered revelations of Korindo’s rainforest destruction on its palm oil plantations in Indonesia.

Photographs had surfaced of executives from both companies shaking hands in front of a banner showcasing their corporate logos, but Samsung has since confirmed “that we [Samsung SDS] do not have any plans to develop a business between the two companies”.

Commenting on the announcement, environmental NGO Mighty Earth campaign director Deborah Lapidus said: “Samsung is doing the right thing by dropping ties with the notorious deforester Korindo.

“Korindo’s deforestation has put its business at risk in many different sectors, not just palm oil. We hope Korindo wakes up to the reality that even from a business perspective, it can’t continue to allow deforestation.”

George Ogleby

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