U.S. companies lagging in efforts to reduce greenhouse gas emissions

While leading companies are forging ahead to cut emissions and seize business opportunities, United States companies still lag their global peers in the numbers and types of actions they are taking to reduce greenhouse gas emissions. However, some 70 percent of firms surveyed believe they can seize new commercial opportunities and improve relations with customers, employees and other stakeholders by addressing sustainability and climate change issues. These were a few of the findings in the 2010 Carbon Disclosure Project (CDP) S&P Report, produced by PwC. The report also notes a well-defined group of American business leaders is emerging, including Cisco Systems, ConEd, News Corporation, Praxair and Spectra Energy.

The results were launched recently in New York at an event hosted by Bank of America Merrill Lynch, one of CDP’s global sponsors.

Bob Moritz, PwC's U.S. chairman and senior partner, believes companies are waking up to the significant commercial potential for products and services that reduce carbon emissions. "As a result," he said, "companies are not just talking differently about climate change, they are also acting differently. More and more of them see the upside of climate related business opportunities."

There are three times as many Global 500 companies* (48) compared to S&P 500** (14) that scored well enough to be recognized on this year’s new Carbon Performance Leadership Index (CPLI). Those are companies with the highest performance scores that have demonstrated a commitment to strategy, setting emissions reductions plans, governance and stakeholder communications.

The survey also found a widening gap between the companies in the CPLI and other companies in the S&P 500 index. 93 percent of the S&P 500 CPLI companies report integrating climate change risks or opportunities into their overall business strategy, as opposed to 35 percent of all respondents in the sample. In addition, more than half of the CPLI companies report in their CDP submission that they have achieved significant emissions reductions in the past year, compared to just 15 percent of all respondents.

Of those companies that made the S&P 500 CPLI, the Utilities sector had the highest representation, with 36 percent, representing five companies. The carbon-intensive sectors – including Utilities, Materials, Energy and Industrials – constituted more than half overall (9 of 14), indicating that those companies that have been most regulated may already have many of the mechanisms in place to facilitate the transition to a low-carbon economy.

However, there are positive signs that businesses increasingly understand the need to better manage their carbon. Despite the legislative uncertainty in the US, and after several years of slow economic growth, the S&P 500 saw an increase in response rates to the highest level ever of 70 percent, with 32 companies responding to CDP for the first time. In addition, more companies are disclosing their emissions, up from 52 percent in 2009 to 59 percent this year, or a 30 percent increase since 2008.

“Companies are seeing the opportunity from climate change, from energy efficiency initiatives to renewable energy development and new innovations,” said Paul Dickinson, CEO of CDP. “Despite the need for much greater regulatory certainty in the US, if companies are to continue to pursue competitive advantage in a complex global economy they need to move quickly to grasp these opportunities. As leaders forge ahead independently in managing their carbon, we will likely see others follow.”

The S&P 500 Report was launched today at the CDP Global Forum at Bank of America headquarters in New York, marking the beginning of Climate Week. Influential business leaders and government officials from around the world and across the spectrum of industries – from financial services, energy, consumer products and manufacturing – will explore key issues and solutions around the central theme of: ‘Climate Innovation = Commercial Opportunity’.

*Largest 500 listed companies in the world, as listed by FTSE
**Largest 500 US listed companies as listed by S&P

Click here to download the CDP 2010 S&P 500 report

Top 10 S&P 500 companies in both the Carbon Disclosure Leadership Index and the Carbon Performance Leadership Index

Carbon Disclosure Leadership Index (CDLI) highlights those companies which have displayed the most professional approach to corporate governance in respect of climate change disclosure practices

Largest S&P 500 non-responders in 2010 by market capitalization

NOTES TO EDITORS

About CDP
The Carbon Disclosure Project (CDP) is an independent not-for-profit organization holding the largest database of primary corporate climate change information in the world. Some 2,500 organizations across the world’s largest economies now measure and disclose their greenhouse gas emissions and climate change strategies through CDP, in order that they can set reduction targets and make performance improvements. This data is gathered on behalf of 534 institutional investors, with combined assets under management in excess of $64 trillion, as well as purchasing organizations and government bodies and made available for integration into business and policy decision making. For more information visit www.cdproject.net.