Corporate America ‘acts on carbon emissions’October 2011
US companies are accelerating their action on climate change, with more than half of the country’s 500 largest firms now putting the issue at the centre of business strategy.
The tenth annual Carbon Disclosure Project results show that, for the first time, the majority of companies on the Standard & Poor’s 500 index, which includes most of the world’s largest companies, are finally integrating climate change into their core operations, in spite of the hindrance of global policy uncertainty.
The CDP, which collects data from companies on behalf of 551 signatory investor institutions worth $71tn, says increasing recognition of new revenue opportunities, investor pressure and volatile fuel prices are the drivers for integration and now covers up to 68% of respondents, up from less than half last year.
In more good news for US firms’ CSR reputation, almost half of companies are reporting reductions in CO2 emissions, up from less than a fifth in 2010, while climate reporting within business strategy has almost doubled.
The level of board oversight, emissions targets and financial incentives to staff for managing climate change issues are also on the increase.
The report also said there was a positive link between stock performance and climate change action, with those companies taking strong measures far outstripping the market average.
Common projects disclosed by companies include energy efficiency improvements to facilities and changes to transportation networks.
As usual, the CDP names its top performers over the year in its Carbon Disclosure Leadership Index, a list that includes Philips, Tesco, Bank of America and Bayer.
But disclosure levels overall are down and the report has also named and shamed the largest non-responders in the index. These include Amazon, Apple and Bank of China.
Public reporting on emissions and verification have also seen a sharp fall in the past year.
Paul Simpson, chief executive 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.”
The CDP does caution, however, of an absence of mandatory rules for corporations on climate change.
US companies are still lagging far behind global targets on emissions, and the CDP’s warning on the lack of global oversight comes amid suggestions that global carbon emissions overall are set to rise “way beyond 2030”.
Research published by the Economist Intelligence Unit suggests there will be “a steady increase in global carbon emissions” beyond 2030, the year many governments are targeting a reduction of up to 50%.
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