CDP Report: World’s Largest Companies Doing Little On Climate Change

CarbonEmissions

“As countries around the world seek economic growth, strong employment and safe environments, corporations have a unique responsibility to deliver that growth in a way that uses natural resources wisely. The opportunity is enormous and it is the only growth worth having.” – Paul Simpson, Chief Executive Officer, CDP

Fifty of the 500 largest listed companies in the world are responsible for nearly three quarters of the group’s 3.6 billion metric tons of greenhouse gas emissions, so finds the CDP Global 500 Climate Change Report 2013 released this week. The carbon emitted by these 50 highest emitting companies, which primarily operate in the energy, materials and utilities sectors, has risen 1.65% to 2.54 billion metric tons over the past four years.

The report is co-written by CDP, formerly known as the Carbon Disclosure Project, and professional services firm PwC. It provides the most authoritative evaluation of corporate progress on climate change.

Inadequate momentum to mitigate climate change is also true of the biggest emitters found in each of the ten sectors covered in the report. Titled Sector insights: what is driving climate change action in the world’s largest companies, the new publication includes industry-specific analysis which shows that the five highest emitting companies from each sector have seen their emissions increase by an average of 2.3% since 2009.

Guardian Sustainable Business offered a biting analysis of the report, concluding companies are making little progress in addressing climate change.

“For all the talk of companies taking the threat of climate change seriously, the latest evidence shows the corporate sector is failing to respond in a meaningful way to the threat of environmental catastrophe,” wrote GSB’s Jo Confino.

Paul Simpson, CEO at CDP says: “Many countries are demonstrating signs of recovery following the global economic downturn. However, clear scientific evidence and increasingly severe weather events are sending strong signals that we must pursue routes to economic prosperity whilst reducing emissions of greenhouse gases. It is imperative that big emitters improve their performance in this regard and governments provide more incentives to make this happen.”

While the biggest emitters present the greatest opportunity for large-scale change, the report identifies opportunities for all Global 500 companies to help build resilience to climate and policy shocks by significantly reducing the amount of carbon dioxide they produce each year. For example, the emissions from nearly half (47%) of the most carbon intensive activities that companies identify across their value chains are yet to be measured. The lack of detailed reporting and information of GHGs from sources related to company activities (Scope 3 emissions), as opposed to those from sources owned or directly controlled by them, may lead companies to underestimate their full carbon impact.

Malcolm Preston, global lead, sustainability and climate change, PwC says: “The report underlines how customers, suppliers, employees, governments and society in general are becoming more demanding of business. It raises questions for some organizations about whether they are focused on sustaining growth in the long term, or just doing enough to recover growth until the next issue arises. With the initial IPCC report only weeks away corporate emissions are still rising. Either business action increases, or the risk is regulation overtakes them.”

Companies that demonstrate a strong commitment to managing their impact on the environment are generating improved financial and environmental results. Analysis of the corporations leading on climate progress, as based on CDP’s acclaimed methodology and including BMW, Nestlé and Cisco Systems, suggests that they generate superior stock performance. Further, the businesses that offer employees monetary incentives related to energy consumption and carbon emissions are 18% more successful at accomplishing reductions.

The CDP Global 500 Climate Change Report 2013 is available to download free. It launches this week at CDP’s annual Global Climate Forum which is broadcast live online. The public disclosures of climate change information from Global 500 companies taking part in CDP this year are also available on the CDP website. Over 4,500 businesses in markets around the world have disclosed through CDP this year. Their data will be disseminated to investors via various channels, such as Bloomberg terminals, where it is downloaded an average of 1 million times every six weeks.

Read the CDP Report here

Adapted from an original article at Sustainable Industries blog here

Originally Posted on Eric Block on Responsible Branding.

2 Responses to CDP Report: World’s Largest Companies Doing Little On Climate Change

  1. Ajay Phatak September 19, 2013 at 7:35 am #

    This is rather sad state of affairs. And it is not just the carbon emission – it is also resource ry depletion as a very rapid rate. The Industries should strive at growing employment and well being rather than the $$ numbers. The days of counting $$ are getting over :-(

    Ajay

  2. Peter Hansford September 20, 2013 at 9:43 pm #

    I am sad to say it but I am not surprised by the fact that the largest polluters are not improving their environmental performance.

    These companies obviously have developed a business model which depends on emissions and business models are hard to turn around if they can continue to add to the companies market position and profitability.

    Management of these companies have a fiduciary duty to maximise shareholder value and under most accounting rules this ignores the stock of natural resources and the flow of environmental contaminants.

    The late Ray Anderson of Interface was able to change the performance metrics to include environmental dimensions as CEO and Chair of the global textile company that he part owned. But even then it took an epiphany, support from Paul Hawken and others and 10 years of focussed action.

    Pavan Sukhdev, from the UN LEED project, and others have called for legislation that changes this circumstance and requires mandatory reporting.

    Until then we must rely on the media and environmental groups to spotlight poor environmental performers so that we can be more conscious in our choices.

    However the media as we have seen is facing its own difficulties in terms of grappling with new technologies and audiences and every advertising dollar is precious – whether it comes from environmentally destructive companies or not.

    Its hard to expect brave decisions from people whose job depends on not making them.

    What therefore are we to do?

    We need action from a coalition of international organisations (IMF, World Bank, UN (IPCC),etc) to insist on Global Reporting of environmental and social dimensions of their business outputs.

    We need to change the game but the rules need to change to facilitate this.