Carbon Action is an investor-led initiative designed to accelerate company action on carbon reduction and energy efficiency activities which deliver a satisfactory return on investment. It aims to support investor risk management in areas including regulation, operations, fiduciary duty and reputation. 254 investors with US$19 trillion in assets under management request the world’s highest emitting companies to:
- Make emissions reductions (year-on-year); with
- targets publicly disclosed; and
- ROI-positive investments in projects.
Some 260 companies in 17 high emitting industries will receive this request in 2013.1
The initiative was developed by CDP and a driving group of investors including Aviva, CCLA, Robeco and Scottish Widows Investment Partnership. It works in partnership with the UN Principles for Responsible Investment which runs an annual collaborative engagement program. The Engagement Handbook is available for purchase to signatory investors.
- Carbon Action has grown from 35 in 2011 to 190 signatories representing US$ 18 trillion in assets;
- 61 companies have set new emissions reduction targets (from the original group of 205 companies); and
- Companies reported reductions of 497 million tonnes of CO2e as a result of emission reduction activities totalling US$ 11 billion in 2012.2
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
Benefits of being a signatory
We invite investors to sign up in 2013 to accelerate cost effective company action on energy efficiency and carbon reduction. Signatories will benefit from:
- Corporate climate / energy management data.
- Engagement facilitation
1All companies listed in Global 500 or FTSE 800 all-world Indices
2Note: 497 million metric tonnes CO2e represents the sum total of 860 emissions reduction activities reported in question 3.3b of the 2012 Investor CDP 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