NEWS RELEASE
Date: 9 October 2007
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Investors must play a key role in building a greener future
More investors must send strong signals to the market over the importance of a company’s environmental record in making investment decisions, Climate Change Minister Joan Ruddock said today.
Ms Ruddock, who opened a Carbon Disclosure Project launch in London today, emphasised the vital role played by investors in turning companies green.
Ms Ruddock said:
“It is imperative for Government and businesses to work closely together to question our practices, challenge them and, more importantly, make business choices that reflect the importance of a low carbon economy.
“Investors have a particularly key role to play in this. They should give consideration to environmental and social credentials, sending out signals to the financial markets to say that carbon disclosure is vital and show companies that it will affect their investment decisions. Together we must work to drive down emissions.”
The Carbon Disclosure Project, now celebrating its seventh year, encourages transparency and accountability in business by calling for leading companies to disclose information on how they measure, report and manage greenhouse gas emissions.
The project is gathering pace and popularity with 2007 seeing the greatest response rate to date with 91% of FTSE100 and 70% of FTSE350 supplying information.
Notes to editors
- CDP is an independent not-for-profit organisation that acts as a global secretariat for institutional investor collaboration on climate change. CDP is the largest investor collaboration of its kind, acting on behalf of 315 investor signatories holding a total of $41 trillion of assets under management. These include most UK and US based investment banks
- Defra has been a strong supporter of the CDP process since it was launched in 2000, including funding the distribution of the questionnaire in 2006 and 2007.
- Since 2002, the CDP Secretariat has sent a voluntary questionnaire to companies requesting information on how they measure, report and manage their greenhouse gas emissions. The objective is to develop a relationship between shareholders and companies regarding the implications for shareholder value presented by climate change. The questionnaire asks for information about perception of climate risk and opportunity and climate change strategy, including any reduction targets. It also seeks information on quantitative greenhouse gas emissions and how these are managed. The responses and analysis of results are made publicly available on the CDP website - the largest repository of corporate greenhouse gas emissions data in the world.
- Despite being voluntary, the CDP questionnaire has a very high response rate. In 2007 (CDP5), CDP wrote to 2400 companies globally, 1350 of which responded. In the UK, the FTSE 350 companies were approached. The response rate for the FTSE100 was 92% (up from 83% in 2006), 61% for the FTSE250 (36% in 2006) and 70% for the FTSE 350 (up from 49% last year). 2007 saw the greatest response rate to date. 91% of FTSE100 companies responded and 70% of the FTSE350 (up from 49% last year).
- The total emissions reported to CDP (this also includes responses from outside UK) comprised of 14% of all global greenhouse gas emissions attributed to human activity – a 109% increase since 2006.
- 95% of the FT500 companies (the largest 500 companies globally, by market capitalisation) who responded reported climate change to be a commercial risk and have implemented an emissions reduction programme.
- 46% of FTSE 350 companies provided details of quantitative emissions data, with increasing numbers reporting on indirect emissions, including electricity, business travel and external distributions/logistics.
- The Carbon intensive sectors have the highest disclosure rate.
- 34% of all global responding companies were purchasing a percentage of their energy from a renewable source.
- The percentage of companies of the FTSE 350 that provided quantitative emissions data rose to 46% (from 27% in 2006). Direct Emissions reporting increased from 10% in 2006 to 38% in 2007 with 64 companies verifying this data.
- CDP states that the 2007 responses have seen improvements in carbon accounting and the quality of responses particularly in dealing with complex issues. This means the responses are more comparable and provides investors with more useful information.
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Page published: 09 October 2007