But leading companies in the United States are still behind their global peers when it comes to taking action, according to the latest reports of the Carbon Disclosure Project, which represents 534 institutional investors representing $64 trillion in combined assets.
The Carbon Disclosure Project surveyed companies listed in the FTSE Global Equity Index Series (Global 500) and Standard & Poor’s 500 Index and came up with two indexes.
The Carbon Performance Leadership Index measured how well companies implemented climate change strategies while the Carbon Disclosure Leadership Index which examined the comprehensiveness of companies’ carbon management reporting.
Siemens, Deutsche Post, BASF, Bayer and Samsung Electronics topped the Global 500 index both in performance and disclosure, where they scored above 95 out of the perfect 100 mark.
The rest of the top 10 are Lafarge, News Corporation, Phillips Electronics, National Australia Bank and Praxair. Siemens, BASF, Bayer, Lafarge, National Australia Bank and Praxair have been in the list for three consecutive years.
The report says these companies actually see growth opportunities in the green shift. The largest companies around the world are reaping financial gains in two areas – energy efficiency and product development.
By applying energy efficiency measures in a wide scale across their operations, companies are able to cut down on costs. They are also able to profit from the sale of new products and services that help consumers cut down on their own greenhouse gas emissions.
Of the all the companies surveyed, 85 percent reported that they handle climate change issues on a board- or senior-executive level, while 65 percent of respondents said they even implement reduction targets.
Another 48 percent have integrated climate change initiatives in their overall business strategies. Still, only 19 percent have reported significant rates of emission reductions.
«Fuelled by opportunities to reduce energy costs, secure energy supply, protect the business from climate change risk and reputational damage, generate revenue and remain competitive, carbon management continues to rise as a strategic priority for many businesses,» said Paul Dickinson, cofounder and chief executive of the Carbon Disclosure Project.
«Companies globally are seizing commercial carbon opportunities, often acting ahead of any policy requirements. More companies than ever before are reporting through Carbon Disclosure Project and measuring and reporting their emissions, which [are] the first building block in working towards a low-carbon economy,» added Mr. Dickinson.
Green race
European companies beat United States-based ones both in disclosure and performance. Twenty percent of European respondents are in the carbon performance index, compared with 6 percent of North American respondents.
Confining the organization’s study to the S&P 500 list, it finds that only 14 companies scored well enough to be recognized in the performance index, compared with 48 from the Global 500.
The survey found a widening gap in terms of performance and commitment between the companies that were well-apprised and those that did not make the cut.
For example, 93 percent of those top 14 managed to incorporate climate change risks or opportunities into their overall business strategy, compared with 35 percent of all respondents in the sample.
In addition, 64 percent of the ranked companies said in their emission disclosure reports that they have achieved significant emissions reductions in the past year, compared with just 15 percent of all respondents.
Despite S&P 500 index companies moving considerably slower than Global 500 companies, the Carbon Disclosure Project said there are indicators that American companies increasingly understand the need to better manage their carbon emissions.
The response rate from this year’s S&P 500 was also the highest ever at 70 percent, with 32 companies responding for the first time since the Carbon Disclosure Project started 10 years ago. The survey also revealed that more companies are disclosing their emissions, up from 52 percent in 2009 to 59 percent this year, or a 30 percent increase since 2008.
Though American companies lag behind global firms, Cisco Systems, Consolidated Edison, News Corporation, Praxair and Spectra Energy managed to score 90 or above out of 100 in the performance index and garnered an A rating, the highest mark, in the disclosure index.
Among the companies that made the performance index, the utilities sector had the highest representation with 36 percent, or five companies. Carbon-intensive sectors that included the utilities, materials, energy and industrial sector constituted nine of 14 companies surveyed, showing that companies that have been most regulated for emissions are the most prepared to facilitate the transition into a low-carbon economy.
Mr. Dickinson said companies that continue to pursue competitive yet sustainable business practices can move quickly to grasp the opportunities presented by the addressing climate change, despite the need for regulatory certainty in the United States.
“Companies are seeing the opportunity from climate change, from energy efficiency initiatives to renewable energy development and new innovations,” he said.
“As leaders forge ahead independently in managing their carbon, we will likely see others follow,” added Mr. Dickinson.
The reports were launched at the Climate Week NYC in New York, which ended on Sunday. It was produced by PricewaterhouseCoopers and sponsored by the Bank of America Merryll Lynch.
