CDP respondents find climate change opportunities

Two thirds of FTSE350 companies see significant opportunities in the low-carbon agenda, but most are not externally verifying their own emissions data

The Carbon Disclosure Project’s latest survey of the UK’s 350 largest listed firms suggests they are increasingly aware of climate change opportunities and embedding them into their business plans. But the accuracy of their emissions data needs improving and many companies with emissions reduction targets are struggling to meet them.

The CDP, established in 2000, now sends questionnaires to 4,700 global companies annually, asking about their greenhouse gas emissions and how they manage them.

Results from the Global 500 – the world’s 500 largest listed firms – were published last month (ENDS Report, September 2010).

Those from the UK’s FTSE 350 Index firms were published on 8 October. Of the 243 respondents, 83% saw “significant” opportunities arising from efforts to address climate change, while 79% saw climate change as a risk.

There has been a notable shift towards the opportunities end of the spectrum, says the CDP.

Examples of business opportunities mentioned by respondents included the development of new eco-products and services, an enhanced role for information technology and the development of smart electricity grids.

But the CDP found few firms engaging with policymakers to encourage them to introduce supportive policies. In addition, 40 of the 126 respondents with emissions reduction targets are not on track to meet them.

The 69% response rate was 2 percentage points up on 2009. However, only 59% of FTSE 350 firms provided emissions information. Fewer than half of these (95 companies) had sought external verification of any of their data.

The CDP hopes to press firms more on this issue in the future. If investors are to make use of the data provided, they will require the same degree of confidence in the figures as they have in financial data.

One of the CDP’s solutions is to offer respondents a new $12,000 membership package, in association with several technology and consultancy firms, including SAP and Microsoft. Companies signing up will receive an online carbon reporting and management system, enhanced analysis of their emissions data and advisory services.

This year, 51% of FTSE 350 respondents said they had embedded climate change into their business strategy, up from 40% in 2009. Moreover, 96% have a board-level executive responsible for the issue.

However, only 39% offer financial incentives to staff linked to carbon management, such as performance-related pay.

Last year, the CDP began rating respondents on their efforts to manage their emissions. This year, 13 were awarded an A-rating, including Barclays, BT, HSBC, Kingfisher, Reckitt Benckiser, Rolls-Royce, Royal Bank of Scotland and Tesco.

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