Nine out of 10 companies now tackling climate change

According to a report published by CDP (formerly Carbon Disclosure Project), the number of companies now actively involved in reducing their carbon footprint has increased dramatically over the past five years.

CDP's analysis of nearly 2,000 companies worldwide indicates that the percentage of firms with active emissions reduction initiatives in place has risen from 47 per cent in 2010 to 89 per cent in 2015.

In addition, 94 per cent of companies are now allocating responsibility for climate issues to the board or to senior management, up from just over 80 per cent five years ago.

The report also suggests that the number of companies setting firm targets to reduce emissions has also grown strongly, with 44 per cent now setting goals to reduce their total greenhouse gas emissions, up from 27 per cent in 2010. Around 50 per cent of firms also have goals to reduce emissions per unit of output, up from 20 per cent in 2010.


Commenting on the report, CDP's executive chairman and co-founder Paul Dickinson says: 'The influence of the corporation is mighty. The momentum of business action on climate change suggests we have reached a tipping point, where companies are poised to achieve their full potential.'

How to invest for a better world

Referring to the upcoming UN climate change conference, at which national leaders meet to agree carbon emissions targets, Dickinson adds: 'Corporations need ambitious policy, at both a national and an international level, that will support them in this regard and will catalyse participation from industry at scale.'

Of the 1,997 companies that disclosed to CDP, 113 made the report's 'A List', which features those firms excelling in their actions to mitigate climate change. The list includes a number of well-known global brands such as Apple, Microsoft and Google - the three largest 'A-Listers' by market capitalisation.

Those companies absent from CDP's analysis include Berkshire Hathaway - the investment vehicle of legendary US investor Warren Buffett - Facebook and Agricultural Bank of China, which were the three largest global companies by market capitalisation that failed to disclose information to CDP.


UK companies making the A grade include retailer Sainsbury's, consumer goods firm Unilever and brewer SAB Miller, media corporation SKY UK, international bank Standard Chartered and industrial firms Carillon and CNH Industrial.

The UK compared favourably will the rest of the world on climate action, with British firms reporting 1,090 active projects in 2015, up from 832 in 2011 - representing a 31 per cent rise compared to an average rise globally of 14 per cent.

However, the CDP warned that current government policies, such as chancellor George Osborne's decision to scrap renewable energy firms' exemption from the Climate Change Levy, risk taking the country backwards on climate change.

'Recent signals from the UK indicate a significant weakening of the government's political will to address climate change, which may well be reflected in corporate climate performance in future. Rather than backtracking on climate policy, the UK needs to redouble its efforts,' says CDP.

It adds, however, that some UK companies are 'looking beyond short-term policy signals to position themselves for a low-carbon future'. These include building supplies company Marshalls, which has committed to reduce emissions by 80 per cent by 2050, and pharmaceuticals giant GlaxoSmithKline, which has pledged a 100 per cent reduction by then.

The CDP says that growing momentum among the corporate world is coinciding with increasing engagement on climate change from investors. The firm claims that in 2014 $21.4 trillion (£13.8 trillion) was invested in funds with environmental, social and governance mandates, an increase of 61 per cent in two years.

Subscribe to Money Observer Magazine

Be the first to receive expert investment news and analysis of shares, funds, regions and strategies we expect to deliver top returns, plus free access to the digital issues on your desktop or via the Money Observer App.

Subscribe now

Add new comment