- New baseline-setting report for corporate climate action will track progress against Paris climate goals in future editions, and finds companies already gaining competitive advantage from reducing their emissions;
- Global business is gearing up to go low-carbon with 85% of companies already having emissions reductions targets in place. Central and Easter European companies lag behind the global average with 38% reporting emissions reduction targets;
- CDP’s global and regional reports reveal that most targets are still lacking long-term vision and alignment with climate science to keep global warming below critical 2˚C threshold;
- This year’s Climate A Listers are revealed with no CEE company achieving an A. The best score in the region is a B from a Hungarian company
October 25, 2016: Central and Eastern European corporations have started the transition to a low-carbon economy, accounting for about 356.797 tons of COR2R savings in the last year. Some are already capitalizing on the opportunities this affords, whilst a large number risk being left behind through lack of long-term planning and inertia, according to analyses released today in the Climate Change Report 2016, CEE edition by CDP, the not-for-profit global environmental data platform.
CDP’s CEE report is published today alongside the first edition of CDP’s Global Climate Tracking Series. The global report, Out of the starting blocks: Tracking progress on corporate climate action, is produced in partnership with We Mean Business and presents carbon emissions and climate change mitigation data from 1,089 companies, disclosed to CDP at the request of 827 institutional investors with assets of US$100 trillion. These companies – which represent some of the world’s most significant in terms of market capitalization and environmental impact – account for 12% of total global greenhouse gas emissions.
With entry into force of the Paris Agreement on climate change confirming the shift to a low-carbon economy, CDP will show how business action is stacking up against the world’s new climate goals by tracking this group of companies – including four from the CEE region – in subsequent annual reports.
This year’s global report, which sets the baseline, shows that the low-carbon transition can bring high returns. Over a five-year period, 62 companies have succeeded in cutting their emissions by 10% or more while increasing their revenue by the same margin. Collectively, revenue has increased by 29% and emissions reduced by 26% amongst this group, while the rest of the companies in the sample saw a 6% decrease in revenue alongside a 6% rise in emissions.
Achieving their current targets would take the 1.089 companies of the sample one quarter of the way to the level that their emissions should drop to in order to be consistent with keeping global warming below 2 degrees.
The group includes:
- SCA: The Swedish consumer goods company and pulp and paper manufacturer reduced its emissions by 32% while increasing revenue by 19%, achieving a 42% drop in emissions intensity. The company is reducing annual costs by €5 million thanks to a new biofuel-powered kiln at one of its mills.
- Daimler: The German car manufacturer brought down the average fleet emissions by 5% versus the previous year, saving 2.2 million ton CO2eq during the use phase of its cars.
- Sodexo: The French company has developed a range of services to help its clients to reduce their carbon footprint. These services now represent almost 30% of Sodexo’s business.
- Givaudan: The Swiss manufacturer of flavours and fragrances has shifted to electricity from renewable energy sources, contributing largely to the over 10% emissions decrease just in the last year.
The 17 companies in the CEE region which are included in CDP’s analysis represent 33% of the region’s total market capitalization. With businesses one of the key actors in enabling the global economy to achieve its climate goals, the report reveals that 38% of CEE companies already have at least one target in place to reduce their greenhouse gas emissions (compared to a global average of 85% and a European average of 92%). However, these targets are lacking in long-term ambition, with no companies having set goals for 2030 or beyond (compared to a global average of 14% and a European average of 17%).
Moreover, just a small proportion of companies in Central and Eastern Europe (1%) have committed to aligning their targets with the latest climate science for a 2˚C pathway. This compares to 11,5% of European companies.
“As investors look to reduce risk by shifting investments to less carbon intensive infrastructure, the spotlight will shine more intensely on corporate actions. There is still all to play for in the race to seize the opportunities from this transition.”
Some of the largest companies in the world by market capitalization are notably absent from the global analysis, having declined to respond to CDP’s investor-backed disclosure request. CDP will track a group of over 700 non-disclosing companies to monitor if they begin to engage with the process in future years and help investors assess their exposure to unrevealed risk. The three biggest companies by market capitalization that failed to disclose this year are Berkshire Hathaway, Facebook and Amazon. In the CEE region, Polskie Górnictwo Naftowe i Gazownictwo SA, Polska Grupa Energetyczna (PGE) SA and Polski Koncern Naftowy ORLEN did not disclose although requested for ten years.
With the Financial Stability Board’s Taskforce on Climate-related Financial Disclosures (TCFD) due to publish its recommendations for consultation later this year, pressure on companies to disclose how climate change is likely to impact their business is expected to grow.
Alongside the report today, CDP launches its 2016 Climate A List which comprises those companies identified as A grade for their actions in the 2015 reporting year to mitigate climate change. Following an independent assessment against CDP’s scoring methodology, 193 companies have made the list, including 54 continental European companies. They include Nestlé (Switzerland), Daimler AG (Germany) and Novo Nordisk A/S (Denmark).
The CDP Climate Change Report 2016, CEE edition, the global CDP Out of the starting blocks and the 2016 Climate A List are available on the CDP website, which also includes climate change rankings for thousands of companies that publicly disclose through CDP.
NOTES TO EDITORS
About CDP Climate Change Report 2016, CEE edition
This is the third edition of the annual CEE climate change reports (covering Poland, Hungary, the Czech Republic and the Baltic states). Other CDP Europe reports, released on 25PthP October, cover the regions France-Benelux, the Nordics, Southern Europe and DACH (Germany, Austria, and Switzerland).
The CEE report can be downloaded here: CDP Climate Change Report 2016, CEE edition
About Out of the starting blocks global report
The first in CDP’s Global Climate Tracking Series, the ‘All to play for’ report sets the baseline for corporate climate action using a sample of 1,839 companies selected to represent the most significant in terms of market capitalization and environmental impact. Of these companies, 1,089 responded to CDP’s investor-backed disclosure request, and their progress on reducing greenhouse gas emissions in line with the goals of the Paris agreement will be tracked against this benchmark.
As well as tracking companies’ future progress on reducing emissions, CDP’s annual global report will monitor the adoption of targets based on the most up-to-date climate science (“science based targets”), use of internal carbon pricing, and renewable energy production and consumption.
CDP will also track the 723 companies that did not respond to its disclosure request, to see if they begin to engage with this critical first step of climate action in future years.
About CDP Europe
CDP Europe is part of the CDP worldwide network. CDP, formerly Carbon Disclosure Project, is an international, not-for-profit organization providing the global system for companies, cities, states and regions to measure, disclose, manage and share vital information on their environmental performance. CDP, voted number one climate research provider by investors, works with 827 institutional investors with assets of US$100 trillion and 89 purchasing organisations with a combined annual spend of over US$2.7 trillion, to motivate companies to disclose their impacts on the environment and natural resources and take action to reduce them. Some 5,800 companies, representing close to 60% global market capitalization, thereof nearly 1,200 in continental Europe, disclosed environmental information through CDP in 2016. CDP now holds the most comprehensive collection globally of primary corporate environmental data and puts these insights at the heart of strategic business, investment and policy decisions. Please visit www.cdp.net or follow us @CDP to find out more.
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