Investors are increasingly waking up to the reality that their portfolios are exposed to numerous climate-related risks, and crucially, are taking steps to address this. Organizations such as the Portfolio Decarbonisation Coalition (PDC) have been gaining momentum, the PDC now has US$40 billion assets under management, and there has been increased action by some asset owners to divest from high impact sectors.
CDP’s new quarterly in-depth research series takes a sector-by-sector look at key emissions-related metrics which, taken in aggregate, could have a material impact on a company’s earnings. The newly released “Back to the laboratory: are global chemical companies innovating for a low-carbon future?” is the latest in this series.
This information can be used to facilitate engagement at company level to drive behavioral change. Showing the material impacts allows fund managers to review their investments and assess which companies are most exposed to climate risk.
The chemicals companies assessed in the Super-League Table produce everything from construction materials to cat medicine. Their preparedness for a low-carbon future is just as diverse.
Leaders DuPont, DSM and AkzoNobel top the charts thanks to their carbon regulation readiness, which emphasizes the leadership of companies which are supportive of low carbon regulation. Lagging behind, Eastman, Solvay and Ashland have a way to go if they are to succeed in a low-carbon future.
However, this is a high emitting sector. The chemical industry contributes some 15% of global industrial GHG emissions . As such, there is significant potential for high impact measures in all the companies we’ve assessed in this report to reduce carbon exposure, improve their readiness for carbon regulation and increase their process and energy efficiency.