Foreword
Paul Simpson, CEO, Carbon Disclosure Project
investment consultancy Mercer released a report concluding that the best way for institutional investors to manage portfolio risk associated with climate change may be to shift 40% of their portfolios into climate- sensitive assets with an emphasis on those that can adapt to a low- carbon environment.
Corporations, investors and governments today are faced with a choice: to compete aggressively for finite resources, or to advance towards a low-carbon economy that enables sustainable, profitable growth, whilst reducing reliance on increasingly scarce materials.
Last year global energy-related carbon dioxide emissions reached a record high. The International Energy Agency estimates made for bleak reading but compounded the necessity to take bold and decisive action if we are to have any chance of limiting temperature increase to the 2°C level agreed by world leaders to protect against catastrophic climate change.
What’s more, rising energy demands are competing for a limited supply of fossil fuels. The competition for increasingly scarce natural resources is putting pressure on commodity prices and having a growing impact both socially and economically. It is clear that today, more than ever, we must build momentum to decouple economic growth from emissions.
Managing carbon emissions and protecting the business from climate change impacts is fundamental to achieving sustainable and strong shareholder returns. Earlier this year,
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An important part of an investor’s strategy should be to engage with the companies in which they invest to encourage performance improvement. In a new initiative launched by CDP this year, a leading group of investors is encouraging their portfolio companies to reduce emissions by investing in emissions reducing activities with a satisfactory payback period. This reflects the growing recognition that there is a huge range of carbon reducing activities companies can undertake that have a very clear business case. It is in the interests of all investors and not just the more active owners of investments to ensure these actions are taken.
As the management of carbon continues to move into companies’ core business strategies and mainstream investment thinking, demand for primary corporate climate change information grows around the world. As well as working on behalf of 551 institutional investors to gather relevant information from large corporations around the world, CDP is also working with global businesses and governments to strengthen the resilience and sustainability of their supply chains through the CDP Supply Chain program. CDP Cities has launched to help the world’s major cities reduce climate change risk and bolster economic growth; and CDP Water Disclosure is now in its second year of working with major global companies to improve water management.
A key part of CDP’s strategy is to ensure the effective use of data collected. To assist with this, companies are able to obtain tools that help them to measure, report
and manage carbon more effectively, through CDP Reporter Services.
It is through partnerships that CDP can achieve the largest impact. We are delighted to be working again this year with KPMG, our Ireland advisor and report writer, as well as with our principal sponsor in Ireland the NTR Foundation, the Environmental Protection Agency, the Sustainable Energy Authority of Ireland and Whitespace Publishing. These and our other partners around the world are integral to the acceleration of CDP’s mission.
Whilst we wait patiently for much needed global regulation, business must continue to forge ahead, innovate and seek out opportunities by doing more with less. The decisions that perpetuate a legitimate, low-carbon and high growth economy will bring considerable value to those that have the foresight to make them. The information contained in this report and the companies’ responses assist in illuminating that path.
Paul Simpson CEO
Carbon Disclosure Project
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