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Corporate climate leaders outperform peers
New research from the voluntary disclosure group CDP shows that firms taking a leading position on emissions reduction outperformed the Bloomberg World Index by 9.6% over the past four years. The comparison is based on total financial returns, including interest, capital gains, dividends and distributions. The 187 companies comprising CDP’s so-called “A List” have reduced their absolute emissions by 33m tonnes in the past reporting year. And according to CDP’s calculations, the average internal rate of return on carbon emission reduction projects undertaken by this top tranche of companies is 57%. CDP cites the example of US carmaker General Motors, which has implemented carbon reduction measures that have resulted in emissions savings of 244,000 metric tonnes per year and cost savings of $287m.
In addition, CDP reports that 75% of the A Listers, which appear in its new Climate Performance Leadership Index, are on track to meet their stated emissions reduction targets. This compares with 59% of their non-leading peers. The A List represents 9% of the 1,971 companies that submit emissions data to CDP. Yet the collective investment of this leading group in efforts to reduce carbon emissions totals $23bn, just under half of the...