CDP 2011 performance scores

 
 

 Introduction to carbon performance scores

 

In the 10 years that CDP has monitored disclosure practices, corporate activity has advanced to a stage where analysis of performance can aid investors who want to identify leading companies in carbon management. In 2009, CDP piloted a performance component in an effort to respond to investor requests for this analysis.

In 2010 the performance scoring process was rolled out to cover more CDP samples – groups of companies based on market capitalization and samples have continued to be scored for performance in 2011.

Within these samples, all companies with a sufficient level of disclosure in their response received a performance score. The qualifying threshold to receive a carbon performance score was a minimum Carbon Disclosure Score of 50. Disclosure scores lower than 50 do not necessarily indicate poor performance; rather, they indicate insufficient information to evaluate performance.

 

 How are performance points awarded?

 

Performance points are awarded for actions considered to contribute to climate change mitigation, adaptation and transparency. Actions considered to be more fundamental to progress on combating climate change are awarded more points. External verification/assurance of emissions data is rewarded under the performance scoring as it is considered that this can potentially give data-users greater confidence in the data, and so can help them to take positive climate actions based upon it.

 

 The CDP 2011 carbon performance bands

 

The carbon performance score is given as a banded score. Indicative descriptions of the bands follow and are for guidance only. The drivers of any individual company score may vary across a number of different indicators. As such, data-users should read individual company responses to understand the context for each business. Care should be taken when comparing performance across companies.

Band A/A- (>70%)
Fully integrated climate change strategy driving significant maturity in climate change initiatives An "A" signifies that in addition to achieving a score of more than 70, the company has met the additional criteria for entry into the Carbon Performance Leadership Index (see below). An "A-" signifies that the company has achieved the high score, but not met the additional criteria.

Band B (>50%)
Integration of climate change recognized as priority for strategy, not all initiatives fully established.

Band C (>30%)
Some activity on climate change with varied levels of integration of those initiatives into strategy.

Band D (>15%)
Limited evidence of mitigation or adaptation initiatives and no/limited strategy on climate change.

Band E (>15%)
Little evidence of initiatives on carbon management potentially due to companies just beginning to take action on climate change.

No performance score is allocated below a disclosure of 50%, as there would be insufficient information on which to base a performance score.

 

Important to note:

That answers are considered equally, independent of sector.

While clear indicators of good performance emerge from the results, there are several factors to consider when evaluating where a company is ranked in comparison to its peers.

  • The carbon performance ranking is based solely on information disclosed in a company’s CDP response. Any additional negative or positive actions that are not disclosed in a company’s CDP response are not considered in the application of the performance score methodology.
  • CDP performance results should be considered in conjunction with other carbon metrics to provide a more comprehensive picture of a company’s performance on mitigating climate change.

It’s important for data-users to keep in mind that the CDP carbon performance score is not:

  • An assessment of the extent to which a company’s actions have reduced carbon intensity relative to other companies in its sector.
  • An assessment of how material a company’s actions are relative to the business or to climate mitigation;
  • A measure of how low carbon a company is; the score simply recognizes evidence of action.

Not all company responses are scored. Some samples – which are groups of companies based on market capitalization – are not scored.

 

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 Carbon Performance Leadership Index (CPLI) 2011

 

In order to be included in the CPLI (Band A), companies must:

  • Attain a disclosure score of 50 or above in order to be scored for performance
  • Attain a performance score greater than 70
  • Score maximum performance points on question 13.1a (absolute emissions performance) for GHG reductions due to emission reduction actions over the past year
  • Disclose gross global Scope 1 and Scope 2 figures
  • Score maximum performance points for verification of Scope 1 and Scope 2
  • Make their responses public and submit via CDP’s Online Response System

Note: CDP reserves the right to exclude a company from the CPLI if there is anything in its response that calls into question its suitability for inclusion.

 

The Global 500 CPLI 2011

Sector Company Disclosure score
Consumer Discretionary BMW 96
Fiat 93
  Honda Motor Company 95
  Philips Electronics 99
Consumer Staples British American Tobacco 91
Tesco 97
Energy BG Group 85
Financials AXA Group 92
Bank of America 97
Bank of Montreal 88
Commonwealth Bank of Australia 89
Morgan Stanley 87
National Australia Bank 91
Swiss Re 91
  UBS 91
  Westpac Banking 96
Health Care Bayer 99
GlaxoSmithKline 93
  Novartis 94
Industrials CSX 85
Lockheed Martin 90
Schneider Electric 91
Information Technology Cisco Systems 98
Samsung Electronics 94
  SAP 96
Sony Corporation 94
Materials Air Products & Chemicals 92
BASF 93
Telecommunications No Companies  
Utilities ENEL 89 

The companies highlighted in orange are those that have moved into the Global 500 CPLI this year.

 

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