CDP Global 500 Report 2011: Accelerating Low Carbon Growth

The 2011 edition of the annual CDP Global 500 report examines the carbon reduction activities at the world’s largest public corporations.


The 2011 Carbon Disclosure Leadership Index (CDLI)

What does a CDP carbon disclosure score represent?

Generally, companies scoring within a particular range suggest levels of commitment to, and experience of, carbon disclosure. The indicative description of each level is provided below for guidance only; investors should read individual company responses to understand the context for each business.


How is the disclosure score determined?

In determining the disclosure score for each company, we assess the following:

  • The level of understanding and disclosure of company-specific exposure to climate-related risks and opportunities
  • The level of strategic focus and commitment to understanding the business issues related to climate change, emanating from the top of the organization
  • The extent to which a company has measured its carbon emissions
  • The extent of the internal data management practices for understanding GHG emissions, including energy use
  • The frequency and relevance of disclosure to key corporate stakeholders
  • Whether the company uses third party for external verification of emissions data to promote greater confidence and usage of the data

Figure 16: Carbon disclosure score

Eligibility for the CDLI

In order to be included in the CDLI companies must:

  • Respond using the Online Reporting System (ORS) prior to the deadline
  • Provide a public response
  • Score within the top 10% of the reporting population: a total of 5213 companies are included in the 2011 Global 500 CDLI

More information on the CDLI can be found in the information request, supporting methodology and guidance documents.

13. In 2011, 7 companies scored 90 (the 46th highest score) which took the total number of companies in the CDLI to 52.

Figure 17: The Global 500 CDLI 2011

Sector Company Carbon disclosure score
Consumer Discretionary Philips Electronics 99
  BMW 96
  Honda Motor Company 95
  News Corporation 93
  Panasonic 93
  Fiat 93
  Volkswagen 91
  Metro 90
  British Sky Broadcasting 90
Consumer Staples Tesco 97
Nestlé 91
British American Tobacco 91
  PepsiCo 90
Energy Suncor Energy 92
Hess 91
Royal Dutch Shell 90
Financials Bank of America 97
Westpac Banking 96
Simon Property 96
  HSBC Holdings 95
AXA Group 92
Allianz 92
Swiss Re 91
  UBS 91
  Royal Bank of Scotland Group 91
  National Australia Bank 91
Health Care Bayer 99
Gilead Sciences 95
  Novartis 94
  GlaxoSmithKline 93
Industrials Deutsche Post 99
UPS 99
  Siemens 97
Saint-Gobain 94
Boeing 92
  Schneider Electric 91
Lockheed Martin 90
Information Technology Cisco Systems 98
Accenture 93
  SAP 96
Sony Corporation 94
  Samsung Electronics 94
Materials Lafarge 96
Dow Chemical 95
  VALE 93
Praxair 93
Air Products & Chemicals 92
Israel Chemicals 90
Telecommunications Telefonica 90
Utilities Fortum Oyj 97
Centrica 96
  PG&E 92

Companies highlighted in green have been in the Global 500 CDLI for three consecutive years (2009-2011).
Companies highlighted in orange have moved into the Global 500 CDLI index this year.


The highest disclosure score in 2011 is 99; four companies have achieved this impressive result (Philips Electronics, Bayer, Deutsche Post and UPS). Cisco Systems scored 98, and Siemens, Tesco, Fortum Oyj and Bank of America all scored 97. In 2010, the highest disclosure score was 98 and only one company, Siemens, achieved this.

The average score of the CDLI companies in 2011 is 94, up from 91 in 2010; this is significantly higher than the overall Global 500 average of 69 in 2011 and 65 in 2010. The lowest CDLI score in 2011 is 90, compared to 86 in 2010. This indicates that the quality and depth of responses continues to improve, despite the increasing stringency of the scoring mechanism year on year. All ten sectors are represented in the CDLI again, confirming the view that high quality disclosure is possible regardless of sector.

Numerous companies have reached the Carbon Disclosure Leadership Index on more than one occasion; however, there are 13 companies that are disclosure leaders for the third consecutive year, thereby demonstrating a long term commitment to measuring and reporting on climate change. The sectors with the largest number of companies in the CDLI are Financials (10) and Consumer Discretionary (9) which is a change from 2010 when Materials and Consumer Staples led with eight each. In 2009 and 2008, the Financials sector had the largest number of companies in the CDLI.

31% (123) of the companies in the Global 500 are in the Financials sector and 76% (93) of these companies responded, meaning they represent 23% of responding companies. On a percentage basis, the Financials sector is underrepresented in the CDLI (at 19%) showing that, whilst there is some strong leadership in the sector, improvement is possible. The Consumer Discretionary sector may have moved into a stronger position in the CDLI (17%) because consumers are becoming increasingly carbon conscious in their spending habits. This requires companies in the sector to understand and disclose more as they seek to retain and win market share.

CDLI companies show consistent leadership across all areas of disclosure

The Global 500 respondents show a strong overall improvement in disclosure. In 2011, 33% (129) of total respondents score 80 or more compared to 24% (90) in 2010. As the overall quality of emissions disclosure has improved in 2011, the leaders (CDLI) have reported a much stronger understanding of the impact of climate change on their business, and as a result may derive a strategic advantage.

The graph in Figure 18 compares the responses of the CDLI with the average Global 500 across six key areas of disclosure: emissions management, reporting, governance, opportunities, risks and stakeholder engagement. The average CDLI disclosure scores have increased in 2011, ranging from 87 to 98 across six areas (compared to a range of 85 to 95 in 2010).

Generally, all companies score well on emissions management, emissions reporting and governance (average scores in these areas all exceed 75 in 2011). Measurement and governance may be regarded as the early stages of a company’s approach to addressing the challenges presented by climate change. Subsequently, companies may identify that climate change could provide new markets for investments, business opportunities and potential partnerships.

Lockheed Martin is “developing products and services to aid our customers in meeting product efficiency regulations and standards. Lockheed Martin recognizes expanding and evolving markets across its global value chain that has resulted in the development of a number of new offering[s].”

CDLI companies distinguish themselves by outperforming the overall population by a wider margin in the areas of risks, opportunities and stakeholder engagement. CDLI companies are demonstrating their ability to identify new commercial opportunities based on their deeper understanding of climate change issues and how these will impact their businesses by scoring, on average, 93 (overall Global 500 companies scored 54).


Emissions management

A notable area of difference between the CDLI and non-CDLI companies is the practice of setting emissions reduction targets and the emphasis that companies place on this. In 2011, 96% (50) of the CDLI stated that they have emissions reduction targets versus 70% (242) of non-CDLI respondents. As noted in the Key Themes section of this report, more companies are adopting emissions reduction targets as part of their climate change strategy.

Figure 18: Average disclosure score breakdown for the Global 500
overall versus CDLI

14. The areas of disclosure reproduced in the chart above have been reduced from ten categories in 2010 to six in 2011.

“One of the company’s strategic goals is to minimize its own contribution to global warming. This goal was implemented in 2003 when our CEO committed the company to going carbon neutral over a ten year period and set KPIs. The original target was to reduce our own carbon emissions by 15% per FTE and to compensate the remainder through the retirement of high quality emissions reduction certificates. The reduction target has been increased twice since 2003 to the current level of -45% per FTE basis. In 2010 the goal was exceeded as CO2 per FTE had been reduced by 50.6%. Although our carbon neutrality goal was achieved in 2007 the programme is still in force.” - Swiss Re

Emissions reporting

The CDLI companies showed consistent leadership in emissions reporting by gaining an average score of 98 (2010: 97), thereby showing the value that these companies place on measuring and monitoring their emissions.

In 2011, particular emphasis has been placed on verification of emissions by companies. 100% (52) of the CDLI have their Scope 1 and Scope 2 emissions verified (complete or underway) in the reporting year (90% of these companies have been awarded the full marks available by attaching the appropriate third party opinion for the appropriate year and standard). The fact that these companies undertook the verification of their emissions is a strong contributing factor to their inclusion in the CDLI.

Governance & strategy

Governance continues to be a strong area for disclosure for both CDLI and non-CDLI companies in 2011 and forms a significant part of their corporate strategy. 100% of CDLI respondents stated that the Board or senior management has responsibility for climate change in the company (96% in 2010). 94% (371) of the overall Global 500 respondents stated that they had this level of governance (89% in 2010).


The CDLI significantly outperform the Global 500 population in terms of identifying and disclosing climate change opportunities. The average score for the CDLI in this area is 88 compared to 54 across all respondents. Companies that dedicate resources and time to the identification of opportunities may be better placed to capitalize on the opportunities that arise from a low carbon economy. The following examples highlight how companies are responding to and driving opportunities by considering stakeholder opinion, customer base and supply chain as part of their risk assessment process.

“In January 2011, we published a report with Barclays Capital focusing on opportunities for the financial sector to finance low carbon technologies. The most important components of our long-term strategy influenced by climate change are driving new business practices for a carbon-constrained economy. We aim to reduce Accenture’s carbon emissions and support our clients to reduce theirs.” - Accenture

“Current and future regulatory requirements related to climate change are connected with business opportunities for BASF as they increase the demand for existing climate protection products, open up new markets and boost access to market shares. The market for these technologies is expected to grow at an above average rate due to regulatory influences.” - BASF

“Employees are increasingly choosing to work for companies that reflect their values and hence, our response to climate change has potential to impact on our ability to attract and retain employees.” - National Australia Bank



85% (338) of respondents reported risk from climate change in 2011 (2010: 78%, 301).

Undertaking work on risk identification and then disclosing risks could be an area of greater focus for the Global 500 in the future given the comparatively low average overall disclosure score of 62 for this area, although the CDLI companies are further ahead with a disclosure score of 91. The following examples highlight how some companies are identifying and responding to regulatory, physical and other risks brought about by climate change.

“Although the EU has committed itself to emissions reduction also beyond 2012 and to the continuation of the emissions trading system (ETS), the uncertainty related to the post-2012 global policy is the main regulatory risk for the future investments of the energy industry. This might result in wrong investment decisions (technology, fuels, location).” - Fortum Oyj

“Consumers’ behaviors are affected by regional conditions from where they belong. Demands on micro plants for electricity generation with renewable energy sources will be increased in areas where centralized energy supply infrastructures are in short supply. However, in general, demands on high energy efficient and low carbon products will continuously grow in global setting due to increase of energy price and limitation on GHG / carbon emissions.” - Samsung Electronics

“Executives and managers of 3M regularly speak at conferences, customer meetings and with regulators on many topics relating to climate change. These meetings help 3M build understanding among our stakeholders of 3M’s commitment to be a global sustainability leader. We also gain valuable information to further improve our sustainability programs and policies, including issues for manufacturing companies and the potential mechanisms to reduce greenhouse gases.” - 3M

Geographical Representation of the CDLI

Figure 19: Percentage of companies in the CDLI by regionFrom a regional perspective, for the second consecutive year, Europe is the region with the highest proportion of companies in the CDLI (58%, 2010: 49%) despite only representing 34% of the total Global 500 respondents. This can be seen as a reflection of Europe’s advanced regulation and high level of consumer awareness on climate change.

North America (USA & Canada) and Asia both have a low proportion of companies in the CDLI relative to their percentage of the total Global 500 respondents. Despite making up 42% of the Global 500 responding population, only 29% of North American companies make the CDLI. Similarly, Asia represents 15% of the total responses but only 8% of the CDLI. These trends are similar to 2010. 100% of African companies responded, but no African companies made the CDLI (2010: 1 company).

When analysing on a country level, the USA is the country with the highest proportion of companies in the CDLI (26%). However, this shows relatively lower leadership than average as 36% of the Global 500 responding population were from the USA. Germany shows strong leadership, with the highest ratio of responding companies in the CDLI as it only represents 5% of the responding population but 17% of the CDLI. The UK and Switzerland are also high performing countries. Sixteen countries had companies in the CDLI this year which is the same as in 2010. Notable absentees in 2011 include China, India and Russia.

Figure 20: Percentage of companies in the CDLI by country

15. Figure 20 showing % of CDLI by country does not include the countries with no companies in the CDLI.

CDLI and Shareholder Value

The Global 500 companies reported that climate change may have a range of financial impacts on them and consequently on investors. The main drivers reported for such impacts are varied but include:

  • Regulation e.g. carbon prices set through emissions trading schemes (ETS) as seen in Europe, or through a tax as is currently proposed in Australia
  • The potential impact of climate change on supply chains
  • Changing consumer preferences
  • The potential for an increase in the frequency of extreme weather events

Investors value the CDP responses because they clearly disclose the potential investment implications climate change may have on any given business.

Companies included in the CDLI in 2011 have a higher total return from January 2005 to May 2011 than Global 500 companies, outperforming them by a total of 40 percentage points over the six year period.

When analyzing companies included in the CDLI for the last three consecutive years, an even stronger result is revealed: they outperformed the Global 500 by over 60 percentage points over the same period. This indicates that companies which are consistently successful at measuring, managing and reporting on climate change demonstrate higher financial performance.

Figure 21: Total return % (US$)

It is noted that the relationship between strong carbon disclosure scores and total return has not been fully explored. The relationship between total return and carbon disclosure does not necessarily indicate that one causes the other; both will be influenced by a range of factors. These may include the quality of the companies’ management or the companies’ broader approach to identifying and capitalizing on opportunities or managing risks. These findings would benefit from further analysis by the investment community.

It is notable that the period when CDLI companies’ total return falls below Global 500 companies’ total return is in late 2008, during the economic downturn. Although total return fell in all sectors, the downturn particularly affected the Financials sector which makes up the highest proportion of the CDLI.

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