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Report launched on FTSE 350 responses to Carbon Disclosure Project
9th October, 2007
Trucost research reveals more quantified disclosures on carbon by FTSE 350 companies.
The results of the fifth Carbon Disclosure Project (CDP5) were announced in London today. The CDP commissioned Trucost to analyse responses of the UK’s 350 largest listed companies by market capitalisation.
The report reveals that the level of quantified reporting on climate change by FTSE 350 companies has improved since they were first surveyed last year. Most data are reported according to the Greenhouse Gas Protocol international standard, providing better information for investors to compare performance where publicly disclosed.
Simon Thomas, Chief Executive of Trucost said: “The dramatic increase in both the number and quality of responses to the CDP5 demonstrates just how much climate change has risen up the corporate agenda and shows once again that the CDP exerts a powerful and cumulative effect on the disclosure of emissions data.”
Findings in the report are as follows:
Response rates for the FTSE 250 companies were much higher. 61% answered the questionnaire, up from 36% last year. The marked improvement for the second survey of these companies indicates the cumulative effect of the CDP and wider uptake of emissions monitoring.
92% of FTSE 100 companies answered the questionnaire, the highest response rate of all indices surveyed globally. 69% provided quantified data on direct emissions data under Scope 1 of the GHG Protocol.
70% of FTSE 350 companies overall answered the CDP5 questionnaire, up from 49% in 2006. 161 companies provided quantified emissions data. 46% provided direct emissions data under Scope 1 of the GHG Protocol, as well as satisfying Scope 2 for emissions from purchased electricity.
Total Scope 1 emissions reported by FTSE 350 companies amounted to more than 466 million tonnes of carbon dioxide (CO2). Carbon intensities of sectors varied widely when direct emissions were compared with indirect emissions under Scope 2, which amounted to more than 96 million tonnes of CO2.
More companies attempted to provide estimates for Scope 3 emissions. However, there were inconsistencies in boundaries for indirect emissions under Scope 3, which includes supply chains, business travel, and products in use. This suggests that there is a need for greater clarification of boundaries and responsibilities up and downstream. Reporting was also patchy under Scope 3 because the limited number of companies which monitor these emissions are in the early stages of measurement.
Companies are in the early stages of assessing risks such as shifts in consumer attitude and demand. Many companies are starting to assess longer term risks and opportunities presented by market changes and shifting regulatory frameworks, although uncertainty about the implications for many business activities mean reporting is often patchy.
The launch event will feature speakers including:
Joan Ruddock MP, Minister for Climate Change
Simon Thomas, Chief Executive – Trucost
Sir Tom McKillop, Chairman – Merrill Lynch EMEA
Chairman – The RBS Group
Sir Terry Leahy, Chief Executive Officer - Tesco
Tim Weller, Chief Financial Officer – United Utilities.
About the CDP
The CDP is a global initiative aimed at informing investors of the risks and opportunities presented by climate change, and to inform company management of the views of their shareholders regarding climate change. The 315 investors signed up to the Project now represent over $41 trillion of assets under management. This year, the questionnaire was expanded to more specifically request information under the three scopes of the GHG Protocol.About Trucost ( www.trucost.com )
Trucost Plc is an environmental research business which helps companies and investors understand the environmental impacts of business activities in financial terms. Trucost offers expert advice and research to major corporations, both public and private, institutional investors and to Government departments and associated agencies. Trucost wrote the environmental reporting guidelines for UK business with the UK government, released in January 2006.Trucost has built up a database of the environmental impacts and disclosures of over 4,000 major companies worldwide. Trucost’s database of climate change disclosures is the world’s largest. Trucost has developed unparalleled experience and expertise in the area of environmental performance, analysis and reporting, working with leading multinational companies in a range of business sectors including Avis, Bloomsbury, BSKYB, Christian Salvesen, Prudential, LogicaCMG and Legal & General.
Institutional investors use Trucost’s research to support due diligence and active engagement, incorporating environmental performance measurement into their investment decisions. Clients include Hermes Pensions Management Ltd, Henderson Global Investors, Fortis Investments, GLG Partners, Fond de Réserve pour les Retraites (FRR), Merrill Lynch Investment Managers and VicSuper. Institutional investors also use the information to assess the environmental footprint of their portfolios, and therefore better understanding their environmental risk.
For more information please contact Liesel van Ast on +44 20 7321 3731, liesel.vanast@trucost.com