Carbon Disclosure Project: 'World's largest corporations seek clarity on climate change regulation'

Climate change questionnaire draws largest response to date from Global 500, S&P 500

Global corporations view climate change as a driver of risk and opportunity and have cited clear regulation as key to managing the impacts, in this year's findings from the Carbon Disclosure Project (CDP), which includes exclusive data from 1550 of the world's major companies on greenhouse gas emissions and climate change related strategies.

With a backdrop of regulatory uncertainty delaying strategic investment decisions, senior management are calling for greater visibility on climate change related policy in order to better anticipate the impact of regulation driven carbon markets and carbon prices.

Despite the uncertainty with regard to regulation the majority of global companies are acting to reduce their emissions. 74% are now reporting emissions reduction targets, showing companies are increasingly taking climate change mitigation seriously.

The findings published by the CDP, which represents some 385 institutional investors with $57 trillion in assets under management, also revealed the Utilities sector to be the most transparent in their reporting of greenhouse gas emissions, with 93% responding to CDP. In contrast the Oil and Gas sector (an early adopter of carbon reporting) performed relatively poorly with a response rate of just 69%.

Carbon disclosure and climate change reporting is becoming critical for investors to fully assess their risks, liabilities and opportunities within their portfolios.

"We can see from 2008 responses to CDP a marked increase in levels of engagement from companies, with more companies reporting than ever before. With increased regulation on the horizon, investors are requiring this information to better understand the credit worthiness of companies in their portfolio and how climate change might affect their profitability" said Paul Dickinson, CEO of CDP.

The report, containing analysis by Pricewaterhouse Coopers (PwC) of 1550 responses from Global 500 and US S&P 500 companies will be launched Monday Sept. 22 at the New York headquarters of Merrill Lynch, one of CDP's global sponsors. The event will also feature a debate between senior climate change policy advisors to presidential candidates Barack Obama and John McCain.

Global 500 (FTSE Global Equity Index Series) Findings

The overall response rate among Global 500 companies was maintained at 77% in 2008. European and North American companies set the pace among constituents of the 'Global 500' with response rates to CDP's annual Questionnaire of 81% and 78% respectively. This compares to a response rate of just 41% in respect of Asian constituents of the Global 500. Out of the 383 companies that completed the Questionnaire, 58 companies (15%) were responding to CDP for the first time.

Business Risks and Opportunities