Last week, at the Carbon Disclosure Project’s Global Climate Change Forum, the organization issued a challenge to the United States to match the leadership of many corporations by moving forward on climate regulation. The Carbon Disclosure Project (CDP) is a London-based research organization that represents 650 institutional investors, including Portfolio 21 Investments, in an effort to collect greenhouse gas emission data from global companies. Its reports then present trends and identify corporate leaders in disclosure and performance. The recent report analyzes the responses of more than 3,700 global corporations, including more than two-thirds of the members of the S&P 500 Index.
Among the Global 500 group companies, representing the largest market capitalization, climate change is a growing concern and focus of their business planning—more than two-thirds identify climate change risks to their business operations, and more than one-third see these risks posing real and present dangers. The impacts of recent extreme weather events have likely made an impression. This acknowledgement of the current impacts of climate change has increased by 10% in the last two years among CDP respondents.
The CDP’s challenge at this year’s Forum indicates that although there is a growing corporate awareness and momentum toward emissions reductions, this will be only be part of the solution. CDP Chairman Paul Dickinson framed the challenge: “Most of the things that get done in the world get done by the world’s largest companies. Governments need to step up and match the operational domain of the corporations. That means international treaties.” And further: “The developed world has no moral authority to say that they can’t consume in the way that we do…if we don’t get leadership in your country, from the United States.” We are seeing corporations demonstrate willingness, but there is a great degree of uncertainty about the future of energy—what will it cost and where will it come from? Setting a price on carbon would likely help incentivize businesses to reduce pollution, and perhaps even compete with one another about who could do it most efficiently and in the shortest time period. I hope that’s a race that we will one day see unfold.
Amanda is Portfolio 21 Investments' Communications Manager. She has more than 10 years of research, communications, and interactive media experience in the financial industry.