2011 Carbon Disclosure Project S&P 500 Findings: Majority of US Companies Taking Climate Change Action, Despite Absence of Mandatory Rules
NEW YORK, Sept. 20, 2011 /PRNewswire/ — The 2011 S&P 500 report from the Carbon Disclosure Project (CDP) has found that while national and global policy remains uncertain, most large US companies recognize the opportunity to gain strategic advantage from acting to address climate change. For the first time since its inception, CDP has found that a majority of the S&P 500 disclosing companies now integrate climate change into core business strategy.
CDP’s report, which analyzed disclosures from 339 of the largest US corporations by market capitalization, is written by global professional services firm PwC and is seen as a bellwether for greenhouse gas emissions reduction activity at corporate America. CDP collects data from companies on behalf of 551 signatory investor institutions, which together manage $71 trillion in assets worldwide.
The recently released report found an increase in respondents who have senior executive or board oversight of their company’s climate change programs from 68% in 2010 to 87% this year. There was also a doubling of companies reporting climate change policies as an integral part of corporate business strategy, up from 35% of respondents in 2010 to 65% in 2011. Meanwhile, 64% of respondents are setting greenhouse gas emissions reduction targets, up from 51% in 2010 and 32% in 2008.
Contrary to conventional wisdom that presumes long payback periods for emissions reduction and energy efficiency programs, respondents cite commercial benefits as significant, with over 60% of projects offering payback in three years or less.
The most common projects disclosed by corporations were improvements to energy efficiency in their facilities, business processes and transportation networks, supported both by capital investments and changes in employee behavior. 54% of companies now offer financial incentives to staff for managing climate change issues, up from 35% in 2010.
Paul Simpson, CEO of the Carbon Disclosure Project, said: “Energy costs represent a significant component of operational spend and we are seeing the management of carbon increasingly move into companies’ core business strategies, in order to reduce this overhead. As rising energy demands compete for finite resources, the businesses that make the decisions today that perpetuate a low-carbon, high growth economy will be best placed to forge ahead of their slow moving peers.”
In the absence of a comprehensive regulatory framework in the US, companies are raising the profile of the importance of climate change action throughout the business. In addition to incorporating climate change in operational planning to reduce energy costs and business planning for the development and marketing of low-carbon related products, it is also being included as a function of strategic planning to mitigate fiduciary and reputational risk. Companies cite the chance to shape investor perceptions as an important strategic opportunity, recognizing increasing investor focus on how the environmental efficiency of an organization may impact future corporate earnings.
“Companies recognize sustainability is much more than an environmental issue,” says Kathy Nieland, US sustainable business solutions leader, PwC. “Particularly in the absence of regulation, PwC is helping companies take action to contain costs, manage risk and enhance revenue opportunities by incorporating sustainability strategies into corporate objectives.”
Jack Ehnes, CEO of the North American public pension fund CalSTRS, said: “We recognize the growing risk to our investment portfolio that carbon emissions present. In today’s economic environment, there is strategic advantage to addressing climate risk. Companies that measure their carbon emission exposure are better positioned to respond to changing regulatory requirements and to take advantage of efficiency opportunities that can increase shareholder value.”
According to CDP’s Carbon Performance Leadership Index, the companies leading US corporate efforts to tackle climate change include Air Products & Chemicals, Alcoa, Bank of America, Cisco Systems, Clorox, Consolidated Edison, CSX, Ecolab, Lockheed Martin, Molson Coors Brewing, Morgan Stanley.
John E. McGlade, chairman, president and chief executive officer at Air Products said: “We are very proud to be ranked by CDP among the top tier companies on its Global Disclosure and Performance Leadership Indexes and recognized for our commitment to climate change policy disclosure, strategy development, and our energy and emissions reduction programs. The carbon management practices highlighted by the CDP Leadership Indexes have helped Air Products lay a strong foundation for our broader sustainability efforts.”
Full copies of the S&P 500 report 2011: https://www.cdproject.net/en-US/Pages/SP500.aspx
Largest S&P 500 non-responders in 2011
Company Sector Apple Inc. Information Technology Amazon.com Consumer Discretionary Berkshire Hathaway Financials Comcast Consumer Discretionary Honeywell International Industrials DIRECTV Group Consumer Discretionary Express Scripts Health Care National Oilwell Varco Energy EOG Resources Energy General Dynamics Industrials
Note to Editors
About Carbon Disclosure Project (CDP)
The Carbon Disclosure Project (CDP) is an independent not-for-profit organisation holding the largest database of primary corporate climate change and water information in the world. Some 3,000 organisations across the world’s largest economies now measure and disclose their greenhouse gas emissions, water usage and assessment of climate change and water risk and opportunity through CDP, in order that they can set reduction targets and make performance improvements. This data is gathered on behalf of institutional investors, purchasing organisations and government bodies and made available for integration into business and policy decision making. For more information visit www.cdproject.net.
About PwC’s Sustainable Business Solutions Practice
PwC’s Sustainable Business Solutions practice provides practical strategies to help businesses address strategic, compliance, operational, reputational and financial sustainability-related issues. Our global network of firms has more than 700 assurance, advisory, and tax professionals who are dedicated to providing sustainability and climate change business advice. Leveraging our deep industry knowledge, we help clients achieve sustainability goals, capitalize on efficiencies, mitigate risks, and find solutions that can lead to long-term profitability. To learn more, visit http://www.pwc.com/us/sustainability.
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PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients. More than 161,000 people in 154 countries in firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. See www.pwc.com for more information.
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SOURCE Carbon Disclosure Project (CDP)