More companies integrating climate change into business strategies
Climate change has climbed the boardroom agenda after a number of extreme weather events disrupted business operations and supply chains around the world, according to the Carbon Disclosure Project (CDP) Global 500 Climate Change report released today.
Recent events have included the hottest US summer on record, fires in Russia and severe flooding in the UK, Japan and Thailand. Due to these events 81% of reporting companies now identify physical risk from climate change, with 37% perceiving these risks as a real and present danger, up from 10% in 2010.
The CDP report, co-written by professional services firm PwC on behalf of 655 institutional investors representing $78tn in assets, provides an annual update on greenhouse gas emissions data and climate change strategies at the world's largest public corporations.
In 2012, companies integrating climate change into their business strategies increased by 10% year-on-year, to 78%.
The increase contributed to a 13.8% reduction in reported corporate greenhouse gas emissions from 3.6bn metric tons in 2009, as the financial slowdown began to take hold, to 3.1bn metric tons in 2012.
The fall is equivalent to closing 227 gas-fired power stations or taking 138m cars off the road. A third, or 31%, of companies however reported no emissions reductions at all.
Carbon Disclosure Project CEO, Paul Simpson, said: "Extreme weather events are causing significant financial damage to markets".
"Investors therefore expect corporations to think more about climate resilience. There are still leaders and laggards but the economic driver for action is growing, as is the number of investors requesting emissions data. Governments seeking to build strong economies should take note".
The CDP report features emissions data from 379 companies and rates them according to their climate change transparency with the best disclosers entering CDP's Carbon Disclosure Leadership Index (CDLI).
CDP then assesses companies according to the scale and quality of their emissions reductions and strategies, and ranks these according to performance bands. The indices are used by investors to assess corporate preparedness for national or international emissions regulation and to guide investment decisions.
Global lead, sustainability and climate change at PwC, said: "Even with progress year on year, the reality is the level of corporate and national ambition on emissions reduction is nowhere near what is required.
"The new 'normal' for businesses is a period of high uncertainty, subdued growth and volatile commodity prices. If the regulatory certainty that tips significant long term investment decisions doesn't come soon, businesses' ability to plan and act, particularly around energy, supply chain and risk could be anything but 'normal'."
Companies on the CDLI are responding to market demand and improving their climate accountability, achieving higher average disclosure scores year-on-year.
This year, two companies achieved the maximum carbon disclosures scores of 100 - German pharmaceuticals company Bayer and the consumer goods giant Nestle of Switzerland.
The world's largest non-responders to CDP's request for emissions this year included Apple Inc., Berkshire Hathaway, Royal Bank of Canada, Caterpillar Inc., Amazon.com Inc., Comcast Corporation, America Movil, Lukoil, Bank of China and National Oilwell Varco, Inc.