Trucost News / 30 Jun 2017

Trucost Assesses Climate Risks of State-Owned Companies in Norway, commissioned by The Norwegian Ministry of Trade, Industry and Fisheries

The assessment shows high levels of performance and transparency among state-owned companies but mixed results on understanding the business implications of climate change.

Trucost, part of S&P Dow Jones Indices, has published a report commissioned by The Norwegian Ministry of Trade, Industry and Fisheries to assess how 37 companies, fully or partially owned by the Norwegian state, manage climate-related risks.

The report, titled The Norwegian State’s Direct Ownership of Companies – Climate Related Risks, assesses the companies according to five themes: Transparency, Risk Understanding, Performance, Risk Reduction and Opportunity. The assessment was based on responses by the companies to a questionnaire as well as public information disclosed in corporate reports. Industry best practice was used to compare the performance of companies.

Highlights of the report include:

  • Performance: The majority of companies, and all listed companies, either perform in line with their sector or follow best-in-class approaches when it comes to performance.
  • Transparency: Transparency was high across all companies. The larger commercial companies provide higher quality information due to the climate-risk disclosure requirements of stock exchange listings. In terms of public reporting the results are varied, with listed companies being most transparent. Thirty-five percent of the companies do not publish any information on climate-related risks. Twenty-one companies (57%) reported their carbon emissions, and a further 11 companies (29.7%) provide energy and other consumption data used to calculate emissions. Five companies (14%) did not report enough data to calculate their emissions.
  • Risk Understanding: The companies demonstrate varied climate risk understanding, with 22% showing a strong understanding, 53% medium and 25% low understanding, with only non-listed companies showing low understanding. The worst performers tend to focus on their carbon footprint, overlooking other climate-related risks to their business.
  • Risk Reduction: All listed companies either perform in line with their sector or follow best-in-class approaches. The majority of non-listed companies performs below standard practices in terms of risk reduction.
  • Opportunity: Only for the theme of opportunity did some listed companies perform below standard practices while only a minority of non-listed companies followed best-in-class approaches.
  • Overall carbon emissions (scope 1 and 2): The 37 companies have total emissions of 53.75 million tonnes CO2 equivalent and a carbon intensity of 32.43 tonnes of CO2e per NOK 1 million of revenue.

Lauren Smart, Managing Director, Global Head of Financial Institutions Business, Trucost, part of S&P Dow Jones Indices, said: “There is a clear business case for companies to take action to mitigate and adapt to the risks of climate change in order to minimize the financial consequences for its shareholders and customers. Whilst large listed companies are now relatively good at disclosing carbon data, there is still work to be done in encouraging them to truly understand the impact on their business and the opportunities presented. Outside the listed space, company disclosure on climate-related issues is lower – a trend Trucost has observed globally – presenting an informational ‘black hole’ to investors in private companies. As investors increasingly seek to integrate ESG outside of listed equities, there is a clear need for engagement to encourage disclosure with the non-listed parts of their portfolios. The Norwegian government has shown real leadership in this respect with the commissioning of this study.”

The 37 companies assessed were: Aker Kværner Holding AS, Ambita AS, Andøya Space Center AS, Argentum Fondsinvesteringer AS, Avinor AS, Baneservice AS, DNB ASA, Electronic Chart Centre AS, Eksportfinans ASA, Eksportkreditt Norge AS, Entra ASA, Flytoget AS, Gassco AS, GIEK Kredittforsikring AS, Innovation Norway, Investinor AS, Kings Bay AS, Kommunalbanken AS, Kongsberg Gruppen ASA, Mesta AS, Nammo AS, Norfund, Norsk Hydro ASA, NSB AS, Petoro AS, Posten Norge AS, SAS AB, Siva SF, Space Norway AS, Statkraft SF, Statnett SF, Statoil ASA, Store Norske Spitsbergen Kulkompani AS, Telenor AS, Veterinærmedisinsk Oppdragssenter AS, AS Vinmonopolet, Yara International ASA.

About Trucost, part of S&P Dow Jones Indices, a division of S&P Global

Trucost is part of S&P Dow Jones Indices. A leader in carbon and environmental data and risk analysis, Trucost assesses risks relating to climate change, natural resource constraints, and broader environmental, social, and governance factors. Companies and financial institutions use Trucost intelligence to understand their ESG exposure to these factors, inform resilience and identify transformative solutions for a more sustainable global economy. S&P Global’s commitment to environmental analysis and product innovation allows us to deliver essential ESG investment-related information to the global marketplace. For more information, visit www.trucost.com.

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