This week Paul Dickinson, CEO of Carbon Disclosure Project (CDP), offers a daily "sneak peek" at the results of this year's CDP Global 500 and S&P 500 Reports, produced by PricewaterhouseCoopers, ahead of their September 21 launch in New York.
Backed by 475 institutional investors with assets of over US $55 trillion, Carbon Disclosure Project's climate change information request was sent to 3,700 of the world's largest corporations to discover how businesses are managing their carbon emissions and climate change risks and opportunities.
Which companies are best positioned for the transition to the low-carbon economy? Which companies will remain profitable in a carbon-constrained world?
These are the big questions investors, governments and company's senior management are asking and we've set out to find the answers. On September 21, we will announce the results of the Carbon Disclosure Project -- Performance Scoring Pilot. Which firms are already making those efforts to remain profitable under a carbon-constrained economy? Which approaches are they taking? For the first time, we will go beyond scoring firms according to the level and quality of corporate climate change reporting and disclosure to actually rating corporate performance. In this new pilot program, we have scored corporations for their action in responding -- and reducing their contribution -- to climate change.
We wanted to see where risks are being best managed, opportunities best maximized -- so we can present a fuller picture to investors about real corporate commitments. Although I don't want to let the cat out of the bag about which are this year's 10 best performing corporations -- I can reveal what it takes to get there.
1. Offer transparency about their climate change activities and performance: Companies must report their emissions data and climate change strategies. Without transparency, they cannot be classed as high performers.
2. Demonstrate low-carbon intensity: Companies that are running the most carbon efficient operations demonstrate good carbon management and will be best positioned as we move to a low-carbon economy.
3. Establish and achieve emissions reductions plans: High-performing companies must implement emissions reductions plans and should detail any carbon cuts they have achieved so far and how they intend to continue to achieve their reductions. They should also publish forecasts for emissions and energy use.
4. Monitor and manage the evolving climate change agenda by engaging positively with policy makers: Leading companies are looking to policy makers for long-term regulatory incentives to enable them to make the necessary changes to their business to achieve a low-carbon economy.
5. Implement innovative ideas to capitalize on climate change opportunities and demonstrate good management of risks: The potential opportunities for some companies are enormous -- the provision of low-carbon technologies, products and services will generate large revenue streams for the companies who spot the opportunities early.
6. Demonstrate board-level involvement in climate change strategies: Companies that have appointed a board member to oversee climate change impacts demonstrate a clear understanding of the importance of the issue.
7. Drive the business towards climate change mitigation by offering incentives, often financial, to employees for individual management of climate initiatives: More and more companies are now using incentives to encourage behavior change amongst employees, and as engagement regarding climate change increases, senior management is finding that such schemes also enhance staff recruitment and retention.
Besides the winners and losers from our pilot study, we also found that some of the top-scoring firms for disclosing information under what we call the Carbon Disclosure Leadership Index -- scored equally highly with the performance pilot scheme. We are finding more and more companies are demonstrating a real commitment not only to full transparency on their greenhouse gas emissions and climate change strategies, but also to mitigating the effects of climate change by actually taking concrete measures to reduce emissions.
The scientific consensus tells us we must reduce emissions in developed economies by 80 percent by 2050 -- that means at least 3.9 percent per annum, so now is the time for every company to step up to the mark. We are seeing many innovative ways in which companies are cutting emissions and developing low-carbon products and technologies, but we do need to go further and the performance scores we will announce next week show which companies are on the right track for a low-carbon economy.
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