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Upward trend in US companies integrating sustainability agenda in larger business strategy reports Carbon Disclosure Project

September 12, 2012

NEW YORK, Sept. 12, 2012 /PRNewswire/ — New Carbon Disclosure Project (CDP) analysis shows that S&P 500 companies are making significant strides in both transparency and progress towards carbon goals when compared to the Global 500. The results highlight a tipping point in the actions being taken in American C-suites and boardrooms to integrate a sustainability agenda into overall business strategy despite a lack of comprehensive regulatory requirements in the US.

The CDP S&P 500 Climate Change Report, co-written by CDP and professional services firm PwC, on behalf of 655 institutional investors representing $78 trillion in assets, provides an annual update on greenhouse gas emissions data and climate change strategies at America’s largest public corporations. It reveals that the average disclosure score, calculated by CDP to reflect each company’s transparency on climate change, has increased by 13% and the average disclosure score required by companies to achieve a position in the Carbon Disclosure Leadership Index (CDLI) has increased by 11% to 92. This is now on par with the minimum score of 94 required for a position on the Global 500(1) CDLI and shows that the quality of reporting in the United States continues to improve.

Further, the average S&P 500 performance score, which ranks companies according to the scale and quality of their emissions reductions and strategies, increased 44%, with the addition of 24 companies eligible to receive performance scores.

These findings, based on 338(2) company responses to the investor request for information, provide evidence that more S&P 500 companies are taking actions to mitigate their impact on climate change, in spite of the vacuum created by regulatory and legislative inaction. Among the S&P 500 92% of the survey respondents reported board or executive-level oversight compared to 86% in 2011 and 25% of respondents disclosed greenhouse gas information in their Annual Reports, up from 18% in 2011.

Globally, according to the CDP Global 500 Climate Change Report also released today, this year has seen a 10% increase year-on-year in companies integrating climate change into their business strategies (2012: 78%, 2011: 68%), contributing to a 13.8% reduction in reported corporate greenhouse gas emissions from 3.6 billion metric tons in 2009 to 3.1 billion metric tons in 2012. The fall is equivalent to closing 227 gas-fired power stations or taking 138 million cars off the road. A third of companies (31%) however reported no emissions reductions.

CDP’s executive chairman Paul Dickinson says: “The best interests of investors are catalyzing US companies to improve the management of environmental risk, which is vital if we are to forge a more sustainable economy. This report shows us that the powerful American corporation is responding to a growing market demand and increasingly understands that transparency and action on climate change is a business imperative. Failure to act could result in a competitive disadvantage.”

Doug Kangos, partner for Sustainable Business Solutions at PwC says: “The takeaway from this year’s report is clear: more S&P 500 companies have begun to view climate change as critical to their long-term resilience. As a result, they are embedding the physical risks of climate change into their business continuity plans, making headway in reducing GHG emissions, preparing for potential GHG oversight, and improving GHG disclosure. Leadership on the path forward to operating in a lower-carbon economy is coming from their own ranks, not from the public sector.”

“The progress revealed in this year’s CDP numbers shows that, against a backdrop of government inaction, corporations are stepping into the leadership vacuum, fostering a new era in which sustainability and growth are not at odds, but rather, very much in sync,” says Kim Slicklein, president of OgilvyEarth Worldwide, the communications partner for CDP in the US. “The companies that have adopted and integrated sustainability into their business proposition are sure to reap the rewards during the short and long term; indeed, many of them already have. It is our belief that these organizations will be the business leaders of the future.”

The CDP disclosure and performance indices are used by investors to assess corporate preparedness for national or international emissions regulation and to guide investment decisions. CDP’s performance leaders report having lower energy costs, increased productivity, and obtaining the proprietary knowledge needed for development of current and future low-carbon, energy efficient products and services.

S&P 500 carbon disclosure leaders
Companies on the S&P 500 CDLI have the highest carbon disclosure scores and provide perspective on the range and quality of responses to the CDP questionnaire. This year’s CDLI includes the top-scoring 10% of responding S&P 500 companies, 53 in total. Key statistics to note:

  • 6 companies improved disclosure scores by at least 20 points.
  • 25 companies improved disclosure scores by at least 10 points.
  • 22 companies have scored 95 or greater in 2012, compared to 8 companies in 2011.
  • On average, leaders have improved their score by 9 points, a 10% increase from 2011.
  • The CDLI index minimum score has increased to 92 in 2012 from 83 in 2011.

S&P 500 carbon performance leaders
The average performance score for CPLI companies was 91 compared to 79 in 2011 and 85 in 2010. The average performance score for the S&P 500 companies that qualified to receive a performance score was 54, up from 39 in 2011 and 47 in 2010. Key statistics to note:

  • 15 companies achieved band A in 2012, up from 11 companies in 2011.
  • 5 companies improved their band from C to A.
  • 1 company has stayed in the CPLI for 3 consecutive years (Bank of America).
  • CPLI average performance score increased by 15%.
  • 7 S&P 500 CPLI companies are included in the Global 500 CPLI, up from 6 in 2011.

US top ten companies on disclosure and performance

Combining both indices establishes the best companies in the US in terms of carbon disclosure and performance. The financial sector dominates the top ten table.

    US Top Ten Companies on CPLI and CDLI
    -------------------------------------
    Company Name                          Sector      Performance Disclosure
                                                      Band        Score
    ---                                               ----        -----
    Pepco Holdings*                       Utilities   A                       97
    --------------                        ---------   ---                    ---
    NYSE Euronext*                        Financials  A                       96
    -------------                         ----------  ---                    ---
    Wells Fargo                           Financials  A                       95
    -----------                           ----------  ---                    ---
    Ace                                   Financials  A                       94
    ---                                   ----------  ---                    ---
    Eaton                                 Industrials A                       94
    -----                                 ----------- ---                    ---
    Exelon                                Utilities   A                       94
    ------                                ---------   ---                    ---
    Autodesk                              IT          A                       93
    --------                              ---         ---                    ---
    Bank of                               Financials  A                       93
    America*
    -------
    Lockheed Martin                       Industrials A                       93
    ---------------                       ----------- ---                    ---
    Allstate                              Financials  A                       92
    --------                              ----------  ---                    ---

* Companies that have been carbon disclosure leaders for at least three consecutive years.

Emissions data on S&P companies responding to CDP can be found in the appendix of the S&P 500 report at https://www.cdproject.net/CDPResults/CDP-SP500-2012.pdf. Individual public company responses to CDP can be downloaded at https://www.cdproject.net/en-US/Results/Pages/responses.aspx. Details on the Global 500 climate disclosure and performance leaders can be found at https://www.cdproject.net/en-US/Pages/global500.aspx.

Today – CDP’s virtual Global Climate Change Forum featuring some of the world’s foremost climate change leaders. Journalists can register to view the event online through the CDP website. The discussion will take place at the following times: San Francisco 06:00 – 7:30 / New York 09:00 – 10:30 / Sao Paulo 10:00 – 11:30 / London 14:00 – 15:30 / Bonn 15:00 – 16:30

[1] The Global 500 are the largest companies by market capitalization included in the FTSE Global Equity Index Series

[2] 343 companies had responded by the time of printing of the report

Note to Editors

About CDP
The Carbon Disclosure Project (CDP) is an international, not-for-profit organization providing the only global system for companies and cities to measure, disclose, manage and share vital environmental information. CDP harnesses the power of market forces, including 655 institutional investors with assets of US$78 trillion, to collect information from companies on their greenhouse gas emissions and assessment of climate change and water risk and opportunity. CDP now holds the largest collection globally of primary climate change and water data and puts these insights at the heart of strategic business, investment and policy decisions. Please visit www.cdproject.net to find out more.

About PwC
PwC firms help organizations and individuals create the value they’re looking for. We’re a network of firms in 158 countries with close to 169,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com. © 2012 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. 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 www.pwc.com/us/sustainability.

About OgilvyEarth
OgilvyEarth is a global sustainability practice that helps brands harness the power of sustainability through innovative business thinking, strategic planning and communications. OgilvyEarth works with visionary companies that are looking to make sustainability a growth driver for both their business and the communities they serve. Its clients include: Bimbo Bakeries, CDP, Coca-Cola, Delhaize, Domtar, DuPont, The Economist, GSK, J&J, Nabob Coffee, Project Frog, Rainforest Alliance, SAP, SCJ, Siemens, SMaRT, Tetra Pak, Unilever, United Nations, UPS, USGBC, Waste Management, Women For Water and The Water Tank Project. OgilvyEarth is a unit of Ogilvy & Mather, a WPP company (NASDAQ: WPPGY), one of the world’s largest communications services groups. For more information, please visit www.ogilvyearth.com.

SOURCE Carbon Disclosure Project


Source: PR Newswire