More Companies Report Data to CDP Despite Uncertain Climate

More Companies Report Data to CDP Despite Uncertain Climate

The number of U.S. and global companies reporting their greenhouse gas emissions continues to grow, despite a still-shaky economy and the chances for a global climate agreement more uncertain today than many would have expected a year ago.

Amidst the continuing uncertainty, however, a small crop of global companies are emerging as leaders in measuring and managing their carbon footprints, and analyzing and disclosing the risks they face from climate change. Siemens, Deutsche Post, BASF, Bayer and Samsung Electronics, for example, are setting the bar in carbon management and communication, according to the latest annual reports from the Carbon Disclosure Project (CDP).

The U.K.-based nonprofit has for years solicited the world's largest companies for climate change data on behalf of institutional investors. Every year, more companies receive and respond to the CDP questionnaire. This year, CDP, backed by 534 institutional investors overseeing more than $64 trillion in assets, sent inquiries to more than 4,700 companies.

"Fueled by opportunities to reduce energy costs, secure energy supply, protect the business from climate change risk and reputational damage, generate revenue and remain competitive, carbon management continues to rise as a strategic priority for many businesses," CDP CEO Paul Dickinson said in a statement. "Companies globally are seizing commercial carbon opportunities, often acting ahead of any policy requirements. More companies than ever before are reporting through CDP and measuring and reporting their emissions which is the first building block in working towards a low-carbon economy."

The reports released today from CDP cover the Global 500 and S&P 500. Some 82 percent of Global 500 companies responded to the questionnaires, compared to 70 percent of S&P 500 companies, illustrating a trend that has been playing out for several years: North American companies lag their European counterparts in both climate disclosure and performance.

For example, there were three times as many European companies listed on the CDP's new Carbon Performance Leadership Index (CPLI) as North American companies. The CPLI scores companies on their emissions reductions, governance, strategies, and stakeholder communications.

This new index differs from the Carbon Disclosure Leadership Index (CDLI), which ranks companies based on their carbon reporting. Utilities is the most frequently represented sector in this index. Siemens, Deutsche Post, BASF, Bayer and Samsung Electronics scored the highest on the CDLI, and also appeared on the CPLI.

Also new this year, the CDP launched Reporter Services to help companies responding to the questionnaires to develop carbon management strategies by increasing the quality of their data, digging deeper during analysis, and sharing best practices.

Among some of the highlights in the reports:

• Of the 70 percent of S&P 500 companies responding to the CDP questionnaires, 59 percent reported emissions data, compared to 52 percent the year before. Regulatory developments are driving the trend, such as the mandatory emissions reporting rule in the U.S. for the country's highest-emitting facilities, and the Carbon Reduction Commitment in the U.K., in which some U.S.-based companies will need to participate, including Walmart.

• Seventy percent of S&P 500 respondents described how they were going to capitalize on the business opportunities associated with climate change, such as services to help consumers and businesses reduce their emissions, or products that are more energy efficient. But companies also acknowledge the challenges posed by climate change, with 66 percent disclosing significant business risks, such as regulatory risks for carbon intensive sectors or weather-related risks for companies that depend on agricultural materials or natural resources.

• Nine out of 10 Global 500 companies reported climate change-related business opportunities, but less than eight out of 10 disclosed one or more significant risks. Seventy-three percent disclosed their greenhouse gas emissions, compared to 68 percent in 2009.

• Leading companies continue to set the bar, with the average disclosure score of the CDLI rising to 91, compared to 84 in 2009.