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Interserve, National Grid, Royal Dutch Shell, Scottish & Southern Energy, Tesco, Unilever, United Utilities along with Centrica and Reckitt Benckiser were among the UK corporations leading efforts in both performance and disclosure to tackle climate change, according to this year’s Carbon Disclosure Project (CDP) FTSE 350 Report. The results were launched today in London at an event hosted by Bank of America Merrill Lynch, one of CDP’s global sponsors.
This year’s FTSE 350 Report, produced by PricewaterhouseCoopers LLP, shows UK companies are disclosing the highest ever levels of greenhouse gas emissions at 390 million metric tons of CO2-equivalent, equating to 61% of total UK emissions. Yet despite the significant influence they hold in the UK’s level of emissions, just 35% of the FTSE 350 disclosed emissions reduction targets. This is lower than the 51% of Global 500 companies reporting emission reduction targets to CDP.
“This year the UK’s largest businesses are showing year-on-year improvement in the quantity and quality of climate change data disclosed,” said CDP’s chief executive Paul Dickinson. “Yet with regulation such as the Carbon Reduction Commitment and the EU Emissions Trading Scheme making climate change an increasingly material issue, a greater number of UK companies need to be setting emissions reduction targets. A new global deal will be essential in providing a framework for businesses to set these targets.”
Interestingly, the introduction of the Carbon Reduction Commitment in April 2010 was identified by 55% of responding UK companies as a risk, as well as being seen by 24% as an opportunity.
Ian Powell, chairman and senior partner, PricewaterhouseCoopers LLP said, “The launch of this year’s CDP FTSE 350 report comes at a critical stage in the run up to the December Copenhagen Climate Change Conference. The highest ever levels of greenhouse gas emissions reported stems from more companies being able to more accurately measure and report their emissions. More companies understand the issues, and as the performance pilot demonstrates, more are seeing climate change in business terms of opportunity and return on investment too. Markets need this kind of information, as much as business needs an international framework and agreement on carbon emissions targets this year, in order for them to invest for the transformation to a low-carbon global economy.”
This year’s CDP FTSE 350 report included a new performance scoring pilot methodology. The performance scores measure corporations’ actual performance in responding to and reducing their contribution to climate change and is intended to complement the Carbon Disclosure Leadership Index (CDLI) which rates firms according to the level and quality of their disclosure and reporting on greenhouse gas emissions and climate change strategy data. This year, HSBC, Rio Tinto and Carnival take top positions in the CDLI. Nine of the ten top performing companies also featured in the CDLI.
In 2010, CDP plans to formally incorporate the performance pilot into its analysis and perform a deeper level analysis of the performance actions disclosed by participants. This will provide investors with greater insight into how well companies are preparing to compete in a low carbon environment.
The best performing companies all shared the following traits:- They are taking effective action to manage risks and capitalise on new opportunities
- Show carbon reduction activities that deliver results
- Incorporate expected regulation into forward thinking and planning
Other key findings from 2009 FTSE 350 Report:
- Reporting of emissions forecasts increased from 7% in 2008 to 30% in 2009, showing more companies are focusing on their future carbon exposure as regulation increases
- Utilities leads as the strongest performing sector of the FTSE 350
- 67% of utilities companies have achieved positive results in emissions reduction and energy saving measures from carbon reduction programmes.
- Carbon reporting continues to advance; the standard of disclosure has increased dramatically over the past four years since the FTSE 350 were first asked to report to CDP in 2005
- Improved disclosure of emissions data with 55% of companies disclosing Scope 1* and 2 in 2009 compared to 47% in 2008
- CDP maintained an overall response rate of 67% and an increase in responses from the FTSE 100 of 4%, suggesting that, despite the economic downturn, climate change remains high on the agenda
