September 21, 2011—The 2011 edition of the annual Carbon Disclosure Project (CDP) Global 5001 report, which examines carbon reduction activities at the world’s largest public corporations, has found for the first time in the 10-year history of the survey that the majority have climate change actions embedded as part of their business strategy. The report, written by global professional services firm PricewaterhouseCoopers (PwC) on behalf of CDP, attributes this to growing board-level awareness of the link between energy efficiency and increased profitability.
The report, titled Accelerating Low Carbon Growth, analyzed disclosures from 396 of the world’s largest companies, which revealed that 68% have climate change at the heart of business strategies, compared with 48% in 2010. There was also a marked rise in the number of companies reporting reduced greenhouse gas emissions as a result of emissions reduction activities (45%, up from 19% in 2010).
A correlation was also established between higher stock market performance over time, and representation on CDP’s Carbon Performance Leadership Index (CPLI) and the Carbon Disclosure Leadership Index (CDLI). Companies with a strategic focus on climate change provided investors with approximately double the average total return of the Global 500 from January 2005 to May 2011.
Rising oil prices, energy supply risks, and growing recognition of the commercial returns on investments in emissions reduction activities contributed to the growth in importance of climate change as a boardroom issue. Over half (59%) of reported emissions reduction activities delivered payback in three years or less, according to company submissions. These include energy efficiency projects (building fabric, building services and processes), low carbon energy installations, and staff behavioral change. Employee incentives to reduce emissions are now offered by 65% of companies, compared with 49% in 2010.
Other key findings from CDP’s Global 500 report include:
- 74% of Global 500 respondents reported emissions reduction targets, up from 65% in 2010.
- The majority of respondents (93%) reported board or senior executive oversight for climate change (up from 85% in 2010), demonstrating the importance of climate change as a management issue.
- Over 30 new companies targeted by CDP’s Carbon Action request have now set reduction targets, implying growing recognition by companies of the commercial benefits of emissions target setting.
- The majority of respondents (93%) reported board or senior executive oversight for climate change (up from 85% in 2010), demonstrating the importance of climate change as a management issue.
The results of the survey demonstrate that executives of companies both large and small have much to gain by ensuring their businesses have a commitment to sustainability and a definite plan to reduce emissions.
