Three-quarters of the world’s largest companies listed on the FTSE Global 500 have responded to the sixth annual Carbon Disclosure Project (CDP) survey. It finds that performance is patchy among several carbon-intensive sectors.
The CDP is supported by 385 institutional investors with assets of $57 trillion. Its annual survey collects greenhouse gas emissions data with the aim of raising awareness of the implications of climate change for shareholder value. The number and quality of responses is seen as an good indicator of corporate engagement on climate change.
The number of companies responding to the CDP in 2008 is holding steady at 77% - the same as last year - despite the economic downturn and big changes in the composition of the Global 500. Fifty-eight of the 383 responding companies did so for the first time. Among the companies in the Global 500 last year as well as this, the response rate was 82%.
The report finds a significant increase in responses from US companies, up from 76% to 82%, although the quality of their disclosures was below average. Only 50% of Asian companies responded but European firms again responded strongly at 83%.
There has been a big increase in the proportion of companies reporting emissions from their operations and from purchased electricity at 72%, up from 58% last year. But less than half of these companies attempted to report indirect emissions from business travel and product use. Few companies would disclose emissions forecasts.
The report finds that 74% companies claim to have emissions reduction targets, but only 56% actually disclose them.
The CDP scores companies on the quality of their responses to questions such as whether they have identified the risks and opportunities of climate change, what their greenhouse gas emissions are and if they have plans to reduce them. The report reveals a wide variety in responses from individual sectors.
Among the carbon-intensive sectors, utilities scored best because of the fullness of disclosures driven by its exposure to regulation such as the EU emissions trading scheme. The transport sector scored worst.
Most carbon-intensive sectors are good at identifying the risks of climate change but less good at identifying opportunities. The chemicals industry is a case in point, although some firms such as BASF are trying to quantify the emission-reduction benefits of their products (ENDS Report 311, pp 10 - 11 
). An exception is the construction sector which highlights the chance to build energy efficient buildings and retrofit existing ones.
However, the report criticises the construction sector for its low response rate and the refusal of responders to allow their data to be made public.
The CDP also says there is "significant scope" for the oil and gas sector to improve its understanding of the risks and opportunities it faces as a result of climate change.
In the non-carbon-intensive sector, the financial firms score highest for the extent of disclosures. Most companies recognise that their main impact is through investments and loans, for instance, to develop new coal-fired power stations (ENDS Report 403, p 10 ). Using finance to reduce emissions and provide solutions remains a "challenging task", the report says.
The highest scoring companies are listed in the ‘carbon disclosure leadership index’ (see table). Companies such as German chemicals company BASF and Spanish power company Iberdrola are praised by the CDP for "making climate change an integral part of their overall strategy and… planning to benefit from the transition to a low-carbon economy."
However, the ratings are not a measure of a company’s emissions reduction performance or its ‘sustainability’. Indeed, many of the companies in the index are highly carbon-intensive. For instance, the report shows that French cement company Lafarge has an emissions intensity of 4,318 tonnes of CO2 equivalent per million US$ of revenue, while German power company RWE’s is 3,169 tonnes/$ million. US healthcare company Johnson & Johnson has lowest carbon intensity in the index at 15 tonnes/$ million.
Some responses highlighted by the CDP reveal a lack of understanding about climate change. For instance, Japanese electronics company Nintendo told CDP: "We do not consider our company to be exposed to general risks from climate change." German lorry manufacturer MAN refused to take responsibility for emissions from the use of its vehicles which "must be attributed to our customers".
The CDP’s report on performance by UK companies will be published on 8 October.