Increasing incidents of extreme weather events which disrupted business operations and supply chains around the world have pushed climate change up the boardroom agenda, according to the Carbon Disclosure Project’s Global 500 Climate Change report released today.
“With the hottest U.S. summer on record, fires in Russia and flooding in the U.K., Japan and Thailand, among other events, 81% of reporting companies now identify physical risk from climate change, with 37% perceiving these risks as a real and present danger, up from 10% in 2010,” CDP said in a press release..
“Extreme weather events are causing significant financial damage to markets,” says Paul Simpson, CEO of the Carbon Disclosure Project. “Investors therefore expect corporations to think more about climate resilience. There are still leaders and laggards but the economic driver for action is growing, as is the number of investors requesting emissions data. Governments seeking to build strong economies should take note.”
The report notes that 2012 has seen a ten percentage point increase year-on-year in companies integrating climate change into their business strategies (2012: 78%, 2011: 68%), contributing to a 13.8% reduction in reported corporate greenhouse gas emissions, the report found.
Malcolm Preston, global lead, sustainability and climate change, PwC says: “Even with progress year-on-year, the reality is the level of corporate and national ambition on emissions reduction is nowhere near what is required. The new ‘normal’ for businesses is a period of high uncertainty, subdued growth and volatile commodity prices. If the regulatory certainty that tips significant long term investment decisions doesn’t come soon, businesses’ ability to plan and act, particularly around energy, supply chain and risk could be anything but ‘normal’.”
The CDP report, co-written by professional services firm PwC on behalf of 655 institutional investors representing $78 trillion in assets, provides an annual update on greenhouse gas emissions data and climate change strategies at the world’s largest public corporations.
The report features emissions data from 379 companies and rates them according to their climate change transparency. The best disclosers enter CDP’s Carbon Disclosure Leadership Index. This year, two companies achieved the maximum carbon disclosures scores of 100: German pharmaceuticals company Bayer and the consumer goods giant Nestle of Switzerland. While U.S. companies dominate the leadership index, German companies are proportionally over-represented, as are companies from Finland, Spain and the Netherlands.
Royal Bank of Canada was listed as one of the world’s largest non-responders to CDP’s request for emissions data, along with other big names such as Apple Inc., Berkshire Hathaway, Caterpillar Inc. and Amazon.com.