The Investor Group on Climate Change, Goldman Sachs JBWere and The Climate Institute, launched the Carbon Disclosure Project Report 2007 (CDP5) in October. For the second year, the largest 100 Australian and 50 New Zealand companies are included in the global CDP process, which highlights how companies are responding -or not responding - to the challenges of climate change and how they compare globally. Larger companies were more responsive about their actions in response to climate change; 74 per cent of the S&P/ASX 50 gave an answer to the CDP5.
"The increased response rate overall is a promising sign as the world enters into a low-carbon future; however, with over 40 per cent of companies still not providing adequate information to investors around emissions and energy consumption, we still have a way to go," says the chief executive of the Climate Institute, John Connor.
The executive director, head of ESG Research at Goldman Sachs JBWere, Andrew Gray (pictured), says the selection of 25 companies for the Goldman Sachs JBWere Climate Disclosure Leadership Index reflects an improvement.
"A necessary part of solving climate change is ensuring markets are directing capital to appropriate companies and projects. The Carbon Disclosure Project assists in improving information flows by allowing investors to understand the risk and return of companies they are looking to invest in," Gray says. "Over the longer term, we expect companies on the CLI to provide better risk-return outcomes, all else being equal, given the longer dated nature of climate change issues."
Some of the key findings of the CDP5 Australia and New Zealand report include:
* 97 per cent of respondents recognise the potential for climate change issues to affect future earnings, liabilities or the company's general risk profile. The imminent introduction of emissions trading was a key driver in companies' determination of risk.
* 89 per cent of respondents recognise the opportunities to be generated from climate change.
* 93 per cent of respondents have developed and are in the process of implementing emissions reduction strategies.
* 36 per cent of respondents have established quantitative emissions reduction targets.
* 18 per cent of respondents have energy costs that are already material and will be further affected by the cost of carbon.
* Companies are preparing for the introduction of emissions trading. Many anticipate increasing costs.
* 10 per cent of respondents provided a comprehensive emissions profile that had been externally verified.
There will be pressure on companies, particularly chief financial officers, who are seen as the keepers of information, in the lead up to mandatory reporting and emissions trading.
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