Investors Request Disclosure of Climate Emissions, Strategies

The resulting information will be held on the website of the Carbon Disclosure Project, CDP, an independent not-for-profit organization based in London that maintains the largest database in the world on corporate climate change.

In this, its sixth information request, the Carbon Disclosure Project has requested information from over 3,000 companies, up from 2,400 in 2007. It has launched operations in five new geographic areas and widened its scope in many existing regions.

For the first time, the Carbon Disclosure Project will write to China's 100 largest companies, by market capitalization. This is a key step in leveraging investor influence to support Chinese companies in measuring and disclosing their carbon emissions and climate related strategy.

The CDP will also launch new operations in Korea, Latin America, Spain and in the Netherlands, where operations are supported by the Dutch Environment Agency.

Carbon Disclosure Project CEO Paul Dickinson said, "The momentum behind CDP represents the start of a unified global business response to climate change."

"The continued growth in investors supporting CDP and requesting the companies they invest in to respond through the CDP system demonstrates that we have entered an era when climate change has become a mainstream issue for both investors and corporations," he said.

Investors that have signed up to the Carbon Disclosure Project include Merrill Lynch, AXA, ANZ, Banco do Brazil, Mitsubishi UFJ, AIG Investments, Barclays, RBS Group and HSBC.

"The concept of low carbon footprint companies is a win-win idea," said Abyd Karmali, managing director and global head of carbon emissions with the financial management and advisory company Merrill Lynch.

"Those companies will likely have a higher quality of business management and will limit impact on earnings," Karmali said. "Investors also have the opportunity to lower their own carbon footprint by investing in those companies."

The collective assets under management held by Carbon Disclosure Project signatories have increased by more than 30 percent from $41 trillion to $57 trillion, showing that an increasing number of investors are considering climate change in their investment decisions.

"Investors recognise that corporate engagement with climate change issues is an important indicator of good quality corporate management," Dickinson said.

Recent Carbon Disclosure Project research with U.S. signatory investors found that CDP information is important to investors as they make decisions.

"As an investor," said Joachim Faber, Allianz Board Member responsible for asset management, "we are concerned to know whether the companies we are investing in are adequately taking account of climate-related risks. However, the data is often not available, sometimes not comparable or of poor quality."

"As a part of the Carbon Disclosure Project, we hope to collect more reliable data, so eventually, a common emissions measurement methodology can be developed," Faber said.

Sixty percent of investors identified which companies in their portfolio were either not responding to the requests of the Carbon Disclosure Project or were providing poor or trivial answers. The investors then used this information to further engage with these companies on the issue of climate change.

Twenty-six percent of investors supported shareholder resolutions for better disclosure on climate change from some companies not complying with Carbon Disclosure Project disclosure.

All the investors interviewed agreed that the Carbon Disclosure Project data is a valuable resource and incorporated it into their decision making process at some level.

Among many other questions, companies are asked about their total greenhouse gas emissions, the limits on those emissions, the steps taken to manage and reduce emissions, and their reputation in the eyes of consumers on this issue.

The information request includes new questions on how companies communicate their engagement with policymakers on climate change issues and more detailed requests for data from those involved in the EU Emissions Trading Scheme.

"The specialist focus of the Carbon Disclosure Project provides a suitably rigorous structure for an overview of a company's response to climate change, and the survey template is a very helpful management tool for us to assess climate-related risks and opportunities in our own business," said Sir Tom McKillop, Chairman, Royal Bank of Scotland Group.

Corporations have been asked to respond to the information request within four months. The individual company responses, plus analysis of the responses, will be launched in September 2008 and made available free of charge on the Carbon Disclosure Project website at: www.cdproject.net.

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