Who in the corporate world does it best when it comes to carbon disclosure and reduction?

Who in the corporate world does it best when it comes to carbon disclosure and reduction?

Bank of America might be under enormous financial strain, but when it comes to carbon at least, it appears to be doing well. That’s according to the 2011 edition of the annual Carbon Disclosure Project (CDP) Global 500report, which examines carbon reduction activities at the world’s largest public corporations. Bank of America shared the top spot with Cisco Systems, followed by Honda and Sony at joint second place. Bayer, BMW and SAP took an equal share of third place.  

This year’s report found for the first time in the ten year history of the survey, the majority of companies have climate change actions embedded as part of their business strategy. The report, written by PwC on behalf of CDP, attributes this to growing board-level awareness of the link between energy efficiency and increased profitability. 

The report, entitled Accelerating low carbon growth, analysed disclosures from 396 of the world’s largest companies, revealing that 68 percent have climate change at the heart of business strategies, compared with 48 percent 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 percent, up from 19 percent 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. 

The Carbon Performance Leadership Index and Carbon Disclosure Leadership Index are revised annually based on company submissions and present the leaders of the Global 500 in carbon performance and disclosure respectively. The top 10 best performing companies on both measures this year are: 

* USA: Bank of America, Cisco Systems

* Japan: Honda Motor Company, Sony Corporation

* Germany: Bayer, BMW, SAP

* United Kingdom: Tesco

* Netherlands: Philips Electronics

* Australia: Westpac Banking Corporation 

Fourteen new entrants made the 2011 Carbon Performance Leadership Index this yeart, which counts just 29 companies due to more demanding criteria applied by CDP. These are: 

* USA: Air Products & Chemicals, Lockheed Martin, Morgan Stanley

* Japan: Honda Motor Company, Sony Corporation

* Germany: SAP

* France: AXA Group, Schneider Electric

* Italy: ENEL, FIAT

* United Kingdom: British American Tobacco, BG Group, Glaxo SmithKline

* Switzerland: Novartis 

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* (see notes to editor) have now set reduction targets, implying growing recognition by companies of the commercial benefits of emissions target setting

* Utilities is the sector with the best average climate change performance (band B)

* Telecommunications is the only sector not represented in the CPLI this year; a surprising finding given expectation that this sector will support emissions reduction activities

* The Energy sector lags others sectors with the lowest proportion of companies setting targets (55%) and underrepresentation in both the CDLI and CPLI

* Just 37% of respondents currently verify their emissions to acceptable standards, despite the importance of providing investors with validated climate data 

Download the report in full here.

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