Eiris: North American companies catching up on climate change
But US and Canadian companies must do much more if they are to manage their carbon risks and play an active part in the transition to a low-carbon economy.
As the United Nations Copenhagen Climate Change Conference draws nearer, latest research from sustainable investment specialists EIRIS finds finds that the vast majority of North American companies operating in sectors with a high carbon footprint now have a corporate-wide policy on climate change (91% compared to 93% at the global level).
However, when it comes to implementing concrete measures to deliver on corporate climate change policies and commitments, businesses in North American still fall behind companies in other countries.
Highlights of the EIRIS 2009 Climate Change Tracker: North America report on how some of the biggest companies in the USA and Canada are responding to climate change are listed below:
Limited progress, further changes needed
- Rising CO2 emissions: Canada reported 751,974 gigagram (Gg) of CO2 equivalent emissions in 2006 (a 54.8% increase from base year 1990), whilst the US reported 6,087,487 Gg of CO2 equivalent emissions in 2007 (a 15.8% increase from base year 1990).
- North American companies are on a par with their global peers on climate change policy and short term emission targets: 91% have a corporate-wide climate change policy compared to 93% at the global level.
- Poor disclosure overall: 37% of North American companies have advanced or good disclosure compared to about 50% at the global level; 35% meet external verification of data compared to 51% at the global level. However, encouragingly 80% report absolute emissions compared to 84% at the global level; 72% disclose scope of data compared to 81% at the global level.
- Improvements in short-term targets: 57% of North American companies have made commitments to reduce short-term GHG emission targets, compared to 62% at the global level.
- Lack of implementation: only 16% of North American companies have made a commitment to link board remuneration to GHG emissions reductions compared to 28% at the global level; only 43% have policies committing them to address climate change impact of their products compared to 71% at the global level.
- Product impacts ignored: only 9% have set targets to reduce indirect climate change impacts arising from their products, compared to 19% at the global level.
Stephanie Maier, Head of Research at EIRIS said ‘Evidence suggests that positive policy developments announced by President Obama are beginning to provide an impetus for companies to act on climate change. But there are still significant areas where they lag behind and it clear that much more needs to be achieved in the region.’
Stephanie Maier added ‘Investors should focus their attention on engaging with companies to improve disclosure of GHG emissions and ensure that corporate commitments to reduce climate change impacts apply to emissions associated with products – as well as direct emissions.’
As national, regional and international initiatives to regulate GHG emissions move forward, companies will need to better manage their carbon risks and take firm steps to be part of the transition to a low-carbon economy. Therefore investors need to incorporate analysis of the corporate response to climate change into the mainstream financial assessments of the companies in which they invest.
Press contact: mark.robertson@eiris.org, +44 (0)20 7840 5741, +44 (0)7950 931313
Twitter: http://twitter.com/EIRISNews
Tags: climate change, low carbon