Carbon Action

Carbon Action is an investor-led initiative to accelerate company action on carbon reduction and energy efficiency activities which deliver a satisfactory return on investment.

254 investors with US19 trillion in assets under management ask the world’s highest emitting companies to:

  • Make emissions reductions (year-on-year); with
  • targets publicly disclosed; and
  • ROI-positive investments in projects

Some 260 companies in 17 high emitting industries received this request in 2013.

Aim and purpose

Signatory investors recognize the business benefits of target setting and investment in emissions reducing and energy efficiency projects. Carbon Action helps investors advance understanding of portfolio company carbon management and energy efficiency initiatives and to improve risk management in areas including regulation, operations, fiduciary duty and reputation. It helps companies generate positive returns through carbon reducing and energy efficiency projects and so build long term sustainable businesses.

Carbon reductions generate positive ROI

  • Carbon reduction activities are generating satisfactory positive return on investment, delivering average ROI of 33% or a payback in 3 years.
  • Behavioral change; energy efficiency and fugitive emissions reductions generate some of the highest reductions and ROIs
  • High emitting companies that set absolute emissions reduction targets achieved reductions double the rate of those without targets with 10% higher firm-wide profitability
  • Companies reported reductions of 497 million tonnes1 of CO2 e as a result of emission reduction activities totaling US$ 11 billion in 2012

1Note: 497 million metric tonnes CO2e represents the sum total of 860 emissions reduction activities reported in question 3.3b of CDP's 2012 climate change questionnaire by 257 companies in heavy emitting industries. The 238 reported projects with complete financial information analyzed in this report total 110 million metric tonnes CO2e

 
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Who will receive this request?

The Carbon Action request is sent as a letter to the Chair of the Board in each year in February.

It is additional but complementary to CDP's climate change request.

 

How to comply with this request?

The request asks for specific action from companies to reduce emissions and to report all relevant information through the existing CDP information system.

The letter will be accompanied by a short guidance document which indicates which of the questions in February’s information request are appropriate for reporting emissions reducing activities and target setting.

News and resources?

Paul Simpson on Bloomberg TV
Paul Simpson, CEO of CDP, talks about Carbon Action and the economic benefits of reducing carbon emissions.

Carbon reduction brings 33% average return to investors
Investment Europe, 03 Dec 2012.

Contact us
For further information on Carbon Action, contact carbonaction@cdp.net.

The company perspective

Scott Wicker “UPS is a long-time supporter of CDP, which has proven that information and data do drive change and corporate responsibility. CDP's Carbon Action initiative is the latest way for corporations to address climate change in a systematic, quantitative and credible way.”

— Scott Wicker, Chief Sustainability Officer at UPS

The investor perspective

Craig Mackenzie “This initiative focuses on cases where companies do not need to make a choice between emissions reductions or higher financial returns. In the face of rising energy costs, reducing a company’s emissions often means higher profits. Efficient management of energy offers a huge win-win: lower carbon emissions, higher returns for shareholders.”

— Craig Mackenzie, Head of Sustainability at SWIP

Carbon Action signatories 2013

Find out which 254 institutional investors representing US$19 trillion in assets supported CDP's Carbon Action initiative in 2014.

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  © 2014 CARBON DISCLOSURE PROJECT, Registered Charity no. 1122330.
A company limited by guarantee registered in England no. 05013650