Ethical Performance
inside intelligence for responsible business


Global 500 companies lag behind emissions targets

October 2012

Few companies are setting the targets or investments needed for long-term resilience to climate change, reports the Carbon Disclosure Project (CDP), the non-profit body that advises business on emissions and sustainability.

The CDP, summarising its annual survey of Global 500 companies to measure climate change effects on their business, recalls that all countries agreed at the 2011 UN climate summit to aim at limiting warming to 2°C.

It calculates that businesses must reduce emissions by 4% a year between 2020 and 2050 to reach that objective, but says corporates are falling short. Only a fifth of companies have targets for 2020 and beyond, and the average of the longer-term absolute targets is only a yearly 1% reduction. This, says the CDP, probably results from government reluctance to make emission cuts compulsory.

Furthermore, the report says only 40% of the survey respondents reduced emissions as a policy, while others achieved reductions through cost and staff cuts necessitated by the economic downturn.

Yet climate change has remained on company agendas. The CDP reports that in 96% of respondent companies, a director or senior executive still oversees climate change activity, against 93% last year, and 78% have integrated climate change into their business strategy, against 68% in 2011.

Moreover, more companies are appreciating that tackling climate change brings customer approval and an enhanced reputation, and are more likely to attract investment for emissions reduction when they appreciate climate change awareness gives a competitive advantage.

Around half of respondent companies saw the potential for new products and services as a response to climate change, even though only 20% reported they had a budget for low-carbon product research and development.

Another statistic from the report is that 94% of companies on the 2012 Carbon Performance Leadership Index say their long-term strategy has been influenced by climate change, compared with 54% of the Global 500.

Meanwhile, there is an increasing array of tools available to help businesses initiate long-term sustainability efforts. One, an online platform called Caring for Climate, gives information on the UN project of that name. The portal provides tools and guidance to help companies understand the issues and devise policies on climate performance and related risks and opportunities. It is also designed to allow the private sector to report progress on its core commitments.

Investment consultancy South Pole Carbon and the Swiss Federal Institute of Technology have teamed up to develop a financial tool that shows the CO2 emissions profiles of more than 40,000 publicly-listed companies, to promote greater disclosure and allow investors to build more responsible portfolios.

Carbon Disclosure Project | Global | Emissions


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