Bayer and Nestlé score top rankings in annual disclosure and performance survey
The Carbon Disclosure Project (CDP) has released its annual rankings, which measure companies on how they monitor and disclose carbon emissions and the actions they have taken to mitigate their carbon footprint.
The study, which achieved an 81 percent response rate this year, surveys the ‘Global 500’ companies on behalf of 655 investors with $78 tn under management. German chemical and pharmaceutical group Bayer and Swiss food giant Nestlé both top this year’s disclosure and performance rankings.
Nestlé, which is regularly nominated at the IR Magazine Awards, won best use of technology for IR and best IR in Switzerland in June this year, while Bayer was short-listed for best in the chemicals sector.
Among the top 10 companies on the CDP chart are Allianz, BASF and BMW, all of which also won IR Magazine Awards this year.
The CDP study shows that although most companies are aware of the strategic importance of acting on climate change, only a few of them are actually setting the necessary targets or making the appropriate investments. Most companies are finding it difficult to justify the business case for low carbon investment in the current economic climate, and only 21 percent of them have a dedicated budget for low carbon R&D.
The target agreed at the last UN climate summit in Durban, which set the limit for global warming at 2 degrees, is unlikely to be met. Indeed, a PwC analysis shows that in order to obtain such results, a 4 percent yearly decrease in emissions between 2020 and 2050 will be necessary.
Unfortunately, actual corporate targets don’t present that level of ambition. The study reveals that if 82 percent of companies have set emissions targets, only a quarter of them have set them to 2020 and beyond, making the average long-term target about 1 percent per year.
This deficiency reflects the lack of regulatory initiative taken by governments. The study shows that half of respondent companies consider regulation to be an important driver of corporate action, although regulation is also seen as a barrier to long-term investments in emissions mitigation technology.
Climate change appears to remain a priority topic for corporate boards, however. The survey reveals that 78 percent of companies have integrated climate change into their business strategy, up from 68 percent in 2011, and that 96 percent of respondents have board or senior executive oversight of climate change issues, up from 93 percent in 2011.
Moreover, according to the CDP, companies that have entered either the Carbon Performance Leadership Index or the Carbon Disclosure Leadership Index (CDLI) display superior stock performance. An investment in CDLI stocks, for example, would have generated a total return of 67.4 percent over the past six years, more than double the 31.1 percent return of the Global 500.
Candice de Monts-Petit
Candice de Monts-Petit joined IR Magazine as a senior editor in 2012. Prior to this, she worked in investor relations, first as an IRO for oil and gas firms in Paris and Moscow and subsequently as an IR consultant in London. She graduated in business...
