CDP climate performance scores

 

 Introduction to climate 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.

A performance band is a measure of the positive actions that the company has demonstrated through their CDP response. These include actions to promote climate change mitigation, adaptation and transparency. It is represented by a letter from A to E, (including an A- band). CDP acknowledges that the performance scoring process is evolving and recommends that investors review individual company disclosures in addition to performance rankings in order to gain the most comprehensive understanding of company performance.

All companies with a sufficient level of disclosure in their response received a performance band. The qualifying threshold to receive a climate performance score was a minimum climate 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 2012 climate performance bands

 

The climate 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- (>85%)
Fully integrated climate change strategy driving significant reduction in emissions due to climate change initiatives. An "A" signifies that in addition to achieving a score of more than 85, the company has met the additional criteria for entry into the Climate Performance Leadership Index (see below). An "A-" signifies that the company has achieved the high score, but not met the additional criteria.

Band B (>60%)
Integration of climate change recognized as priority for strategy, not all initiatives fully established.

Band C (>40%)
Some activity on climate change with varied levels of integration of those initiatives into strategy.

Band D (>20%)
Limited evidence of mitigation or adaptation initiatives and no/limited strategy on climate change.

Band E (>0%)
Little evidence of initiatives on carbon management potentially due to companies just beginning to take action on climate change.

No performance band 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 climate 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 climate 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 climate 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.

 

 

 Climate Performance Leadership Index (CPLI) 2012

 

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 85
  • 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 2012

*Consecutive years in the CPLI

Sector Company Performance Band Years in CPLI* Disclosure score
Consumer Discretionary BMW A 3 99
  Panasonic A 1 96
Consumer Staples Nestlé A 1 100
  Diageo A 1 98
  Reckitt Benckiser A 1 93
  Philip Morris International* A 1 91
  Unilever A 1 84
Energy Eni A 1 91
Financials Allianz Group A 1 97
  UBS A 3 97
  Wells Fargo A 1 95
  Ace A 1 94
  Bank of America A 3 93
  Bank of Montreal A 3 91
  Intesa Sanpaolo A 1 91
  National Australia Bank A 3 91
  Deutsche Bank A 1 90
  AXA Group A 2 88
  Mizuho Financial Group A 1 85
  Westpac Banking A 3 83
Health Care Bayer A 3 100
  Allergan A 1 90
  Pfizer A 1 87
Industrials Lockheed Martin A 2 93
  Schneider Electric A 2 92
Information Technology Nokia Group A 1 98
  Intel A 1 88
Materials BASF A 3 99
  Anglo American A 1 94
Telecommunication Services Koninklijke KPN A 1 94
  France Telecom A 1 89
Utilities Gas Natural SDG A 1 99
  Iberdrola A 1 95
  Exelon A 1 94

*Philip Morris International (PMI) was added to the Global 500 CPLI on 8th November 2012 following a review which identified the need for a scoring correction. The subsequent adjustment resulted in PMI's inclusion in the 2012 CPLI.

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