Big business must press government on climate change action

by Search Gate staff. Published Fri 08 Oct 2010 10:12
Big business needs to do more to engage policymakers

The Carbon Disclosure Project (CDP) is urging companies to engage with governments in the lead up to the UN climate change summit to encourage policy action and demonstrate the significant opportunities that are now recognised across UK boardrooms from action on climate change.

The CDP FTSE 350 report, prepared by PricewaterhouseCoopers (PwC) and released today, reveals that only one in ten companies are engaging with policymakers to encourage policy action that drives climate change mitigation and adaptation.

Despite this, more than eight out of ten FTSE 350 companies that reported to CDP identify significant opportunities from climate change.

Responses indicate that not only do “cleaner” and “greener” operations and products put companies at a competitive advantage in terms of regulation and reputation, they capture shifting consumer demands and present significant new market opportunities.

Speaking in September at the CDP global forum, Christiana Figueres, the executive secretary for the UN Framework Convention on Climate Change, said: “If you want to push governments you have to push them at home.

“The green race has started and we are on the verge of a new industrial revolution which must succeed.

“Businesses best course is to press governments to give companies and investors the regulatory framework, the incentives and benchmarks to push this new revolution forward on to a global scale”.

Carbon performance leaders in the UK are emerging, with HSBC Holdings, Reckitt Benckiser, Royal Bank of Scotland Group, Scottish and Southern Energy and Tesco among UK companies leading efforts to tackle climate change. This year CDP has introduced the Carbon Performance Leadership Index (CPLI) – those companies with the highest performance scores that have demonstrated a commitment to strategy, setting emissions reductions plans, governance and stakeholder communications.

Thirteen companies from the FTSE 350 scored highly enough to be recognised on this year’s CPLI.

Paul Dickinson, executive chairman of CDP, remarked: “There is evidence in the CDP 2010 FTSE 350 Report that 62% of respondents engage with policymakers but only 13% of respondents report positive engagement to drive mitigation and adaptation. Companies globally are seizing commercial carbon opportunities, often acting ahead of any policy requirements, but business needs to work actively to encourage governments to take the bold steps needed that will deliver the levels of investment required in a low carbon society.

“The majority of companies recognised in the CPLI are encouraging regulation which drives mitigation and adaptation, showing that leadership in performance goes hand-in-hand with a willingness to take an active role in furthering policy development.”

In the UK, the government is looking at mandatory reporting and there is a consultation process in progress on the future of narrative reporting in companies’ annual reports following the coalition government’s agreement to reinstate an Operating and Financial Review that ensures directors’ social and environmental duties are covered.

In advance of these initiatives the number of companies in FTSE 350 reporting to CDP continues to rise, up to 69% (243) from 67% (236) in 2009 and companies’ commitment to transparency and accountability, despite recession and lack of global agreement on climate change, is now embedded in business strategy. 96% (207) of respondents have responsibility for climate change at the board or other executive level, up from 81% (172) in 2009.

Over half of the respondents (51%, 111) show evidence of having integrated climate change into their group business strategy.

Commenting on the report Alan McGill, a partner at PricewaterhouseCoopers UK, said: “The bottom line for companies is that there will be some winners and losers from climate change in the corporate world.

“The ability of the market to identify these depends on the quality of information and reporting it is provided. This year’s responses to CDP have shown that many companies are on this journey and recognise that carbon is going to be, sooner rather than later, a regular feature on company balance sheets.”

The FTSE 350 Report was launched today at an event hosted by Bank of America Merrill Lynch, one of CDP’s global sponsors.

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