ARCHIVE: VIEW FROM THE WEST
CDP Report Documents Increasing Corporate Action on Climate Change
October 12, 2009
The overall results of the Carbon Disclosure Project Report 2009: Canada 200 are encouraging. Canada’s largest publicly traded companies are proactively engaging their shareholders and taking a broad range of actions to manage and reduce greenhouse gas emissions. Even in the uncertain economic period of the past year, corporate leaders have been engaged and their firms have been making investments to mitigate risks and capitalize on opportunities provided by climate change. The findings also show room for companies and governments to continue to work together toward competitiveness in a future low-carbon economy.
The Carbon Disclosure Project (CDP) is an annual information request to the world’s largest companies, on behalf of 475 investors representing $55 trillion in assets under management. In Canada, the Conference Board carries out the survey of the 200 largest companies listed on the Toronto Stock Exchange, asking them to disclose their greenhouse gas emissions, reduction strategies, related investments, risks, opportunities, and governance practices.
Respondents’ goals focus primarily on improving energy efficiency and increasing reliance on renewable energy.
Ninety-seven companies answered the information request in 2009, down slightly from 103 respondents a year ago. The respondents represented 77 per cent of the market capitalization of the 200 companies surveyed, the same proportion that the 2008 survey participants represented. This level of response is evidence that Canadian public companies are engaging their shareholders and communicating their carbon management plans.
Companies Set Goals
Most of the responding companies now have emissions reduction goals. Like last year, respondents’ goals focus primarily on improving energy efficiency (81 companies) and increasing reliance on renewable energy (42 companies). Specific emissions targets are described as reductions in emissions intensity, percentage decreases in actual emissions, or long-term targets to reduce emissions by a specified percentage by a given year.
Opportunities Exceed Risks
More than 80 per cent of responding companies see both risks and opportunities as the climate changes; they most frequently cited regulatory risks and opportunities. More companies now see opportunities than risks, a reversal from the first CDP request in Canada, when risks had greater prominence. Looking forward, Canadian companies are examining options—including permit trading—and preparing strategies to prosper as climate change regulations continue to evolve.
Climate Disclosure Leaders Emerge
Climate Disclosure Leaders are recognized for their superior responses to the information request. Among the 15 companies achieving a Climate Disclosure Leadership ranking this year, 11 are repeat winners and 9 are being recognized for the third consecutive time. That speaks to these companies’ consistent commitment to carbon disclosure leadership. Canadian National Railway, in its first year of reporting to the CDP, achieved the highest Climate Disclosure Leadership ranking. The company’s response details the $200 million CNR invested in fleet renewal, remanufacture, and retrofits in 2008. CNR has a target to improve fuel efficiency by 3 per cent annually. The company has already recovered $35 million of its investment by reducing fuel costs. CNR is increasing its focus on effective greenhouse gas reduction by promoting focused fuel conservation practices, providing training and fostering awareness, and searching for technological innovation.
More than 80 per cent of responding companies see both risks and opportunities as the climate changes.
Companies that produce or transport hydrocarbons achieved 7 of the top 10 scores in the high carbon impact sector. That is encouraging news, since Environment Canada reports that 82 per cent of Canada’s 2007 greenhouse gas emissions came from our production and use of energy1—32 per cent from fossil fuel production and related fugitive emissions, 27 per cent from transportation, 17 per cent from electricity and heat production, and 6 per cent from manufacturing.
Compared with firms that responded to CDP surveys around the world, Canadian companies rank in the middle of the pack in terms of their engagement with policy makers, involvement in emissions trading, and sound climate change governance practices. However, Canadian respondents are below average in terms of the number of companies seeing opportunities and risks; the number of firms with emissions-reduction plans; and the number of companies whose emissions are verified by a third party, a key to standardizing reporting and improving performance.
A View From Washington: Climate Policy Under Obama—Implications for Canada and Trade
The Carbon Disclosure Project: Why Should Companies Participate?
Carbon Disclosure Project—Canada 200 Summary for Investors
Carbon Disclosure Project: How Four Business Sectors See Climate Change Risks and Opportunities
Business Council for Sustainability