Fifty of the 500 largest listed companies in the world are responsible for nearly three quarters of the group’s 3.6 billion metric tons of greenhouse gas (GHG) emissions, so finds the CDP Global 500 Climate Change Report 2013.
The carbon emitted by these 50 highest emitting companies, which primarily operate in the energy, materials and utilities sectors, has risen by 1.65% to 2.54 billion metric tons over the past four years. This increase is equivalent to adding more than 8.5 million pickup trucks to the streets, or the supply of electricity to 6 million homes for a year.
The analysis is based on the climate and energy data of 389 companies listed on the FTSE Global 500 Equity Index, collected by CDP at the request of 722 institutional investors representing US$87 trillion in invested capital. This is a record number of investors now using CDP for insight on corporate environmental performance, as carbon dioxide in the atmosphere passed the landmark level of 400 parts per million and the world prepares for the Intergovernmental Panel on Climate Change (IPCC) 5th assessment report which will strengthen the scientific case for climate change action.
While the biggest emitters present the greatest opportunity for large-scale change, the report identifies opportunities for all Global 500 companies to help build resilience to climate and policy shocks by significantly reducing the amount of carbon dioxide they produce each year. For example, the emissions from nearly half (47%) of the most carbon intensive activities that companies identify across their value chains are yet to be measured. The lack of detailed reporting and information of GHGs from sources related to company activities (Scope 3 emissions), as opposed to those from sources owned or directly controlled by them, may lead companies to underestimate their full carbon impact.
For example, two thirds (72%) of the Global 500 measure emissions associated with business travel but this equates to just 0.2% of the sample’s reported Scope 3 emissions. Nearly all financial businesses are managing their travel emissions but less then a tenth (6%) are reporting the emissions associated with their investments, the sector’s prime source of Scope 3 emissions.
Companies that demonstrate a strong commitment to managing their impact on the environment are generating improved financial and environmental results. Analysis of the corporations leading on climate progress, including BMW, Nestlé and Cisco Systems, suggests that they generate superior stock performance. Further, the businesses that offer employees monetary incentives related to energy consumption and carbon emissions are 18% more successful at accomplishing reductions.