Showing posts with label margins. Show all posts
Showing posts with label margins. Show all posts

Video - Companies Combating Climate Change (CDP Report)


In this video, Lord Adair Turner, Former Chairman of the Financial Services Authority, James Bevan, Chief Investment Officer at CCLA and Paul Simpson talk about the CDP report which ranks companies in terms of their climate performance. This report comes on the heels of Standard & Poor's Ratings Services which stated that climate change will hit countries' economic growth rates and public finances. Former U.S. Treasury Secretary Henry Paulson recently said that climate change is, "the single biggest risk that exists to the economy today."

The IPCC has also indicated that we are a mere 30 years away from exhausting our carbon budget. The current emissions trajectory is dangerously unsustainable. To address the crisis we face both businesses and governments need to substantially raise their carbon reduction efforts.

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The Best and the Worst Climate Performers (CDP)

In addition to ranking corporate leaders, the most recent CDP report lists the leading sectors in terms of climate performance. It reviews regional and national climate leaders and laggards. The report also singled out a few large corporations which refused to disclose their climate performance data. Performance leaders are those who received an "A" grade in the report.

According to the CDP, the sectors most represented in the 2014 Climate Performance Leaders Index are Information Technology, Financials, Consumer Staples, Consumer Discretionary and Industrials. Together these four sectors constitute 86 percent of the A list index.

According to the CDP's climate performance list, almost half of the leaders are based in Europe, with a further third located in either the US or Japan. More than a quarter of the Spanish and Belgian companies that took part in CDP’s climate change program were awarded an A rating. Other nations that performed well are Portugal, the Netherlands and South Korea.

By contrast, the laggards on climate performance are Canada, Switzerland, Australia and China.

Of those corporations that failed to disclose vital climate change data, the three largest in terms of market capitalization are Berkshire Hathaway, Amazon and Comcast.

© 2014, Richard Matthews. All rights reserved.

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Video - Companies Combating Climate Change (CDP Report)
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Climate Action Enhances Profit by 9.6% (2014 CDP Report)

Engaging climate change is becoming almost synonymous with profitability. According to a new study, the more a company does to address climate change the more it appears to profit. This is a solid refutation of the conservative line the we simply cannot afford to manage climate change. It flies in the face of the false argument that we must chose between combating climate change and economic growth.

Companies from Apple to Zurich are showing climate leadership is not only a corporate responsibility it is also spawns a bevy of bottom line benefits. According to new research from CDP, companies that assume the responsibility to engage climate change outperform their peers. In fact, in the period between 2010 and 2014, companies that showed leadership through action to mitigate climate change outperformed the Bloomberg World Index by 9.6 percent.

From a total of 1,971 companies a total of 187 earned a top grade and ended up on the CDP index. Together these companies have reduced their carbon emissions by 33 million tons in the last year alone. The A List represents just 9 percent of almost 2000 companies assessed but they account for $23 billion of the annual investment to reduce carbon emissions. The complete list of 1,971 companies invested $50 billion in carbon reduction.

The CDP says that these companies will yield win-win results; apply a business lens to climate change; raise the bar on investment; and shift away from short-termism.

This is the finding in The A List: The CDP Climate Performance Leadership Index 2014 (CPLI).

"The unprecedented environmental challenges that we confront today – reducing greenhouse gas emissions, safeguarding water resources and preventing the destruction of forests – are also economic problems," says Paul Simpson, chief executive of CDP. "One irrefutable fact is filtering through to companies and investors: the bottom line is at risk from environmental crisis."

© 2014, Richard Matthews. All rights reserved.

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Sustainability is Profitable According to the CDP's 2014 Climate Change Report

Some interesting insights came to light in the 2014 version of the annual CDP S&P 500 Climate Change Report. Overall the report suggests that companies in the S&P 500 are actively managing and planning for climate-change and the companies that do so are more profitable. The report indicates that for companies that are addressing climate change the return on equity was 18 percent higher than their peers and 67 percent higher than companies who do not disclose on climate change. The dividend yield for shareholders was 21 percent stronger then low ranking peers.

Further their results indicate that such efforts make them more stable with 50 percent lower volatility earnings over the past decade than low ranking peers.

As explained in the report, "Investors should take note that the debate has squarely moved from the moral to the material and should reward climate leaders with higher valuation multiples."

In addition to making some global observations, the report ranks companies based on their climate related disclosures to investors. Two indices are included in this report. the Climate Disclosure Leadership Index (CDLI) — a measure of a company’s transparency — and the Climate Performance Leadership Index (CPLI), a measure based on the transparency of the company’s actions to address climate change.

Bank of America, Cisco, General Motors and HP are among the eight leading S&P 500 companies in carbon-reduction efforts and disclosure. These companies along with Autodesk, BNY Mellon, Pepco Holdings and Spectra Energy, all earned an A grade for their actions to reduce climate change and the highest possible disclosure score, 100 out of 100 points.

To access the full report click here (PDF)

© 2014, Richard Matthews. All rights reserved.

Related
Video - Companies Combating Climate Change (CDP Report)
The Best and the Worst Climate Performers (CDP)
Climate Action Enhances Profit by 9.6% (2014 CDP Report)
CDP Studies: Growth of Sustainability and Profitability
CDP Report Shows Sustainability Offers a Competitive Advantage & Better ROI
Corporate America is Benefiting from Taking Action on Climate Change
CDP Climate Disclosure Leaders List 2014
CDP Climate Performance Leaders List 2014
CDP Global 500 Climate Disclosure Leadership Index 2013
CDP Global 500 Climate Performance Leadership Index 2013
CDP Global Climate Change Leaders 2013: Top 12 Companies According to Both CPLI and CDLI
The CDP's 2013 Top Fourteen US Companies (Disclosure and Performance)
CDP Studies: Growth of Sustainability and Profitability
The Low Carbon Business Opportunity
US Firms are Improving but they are Being Outperformed on Sustainability
Top Ten Companies in the 2012 Carbon Disclosure Project Report
CDP Report Shows a Growing Number of Companies See the Risks Posed by Climate Change
CDP Identifies Germany as the Global Sustainability Leader
CDP Report Shows a Growing Number of Companies are Embracing Sustainability

CDP Climate Disclosure Leaders List 2014

CDP Climate Performance Leaders List 2014