UPS, Consolidated Edison and Dow Chemical are among the top-ranked U.S. companies in the Carbon Disclosure Project’s annual carbon performance and disclosure ratings for the S&P 500, as more and more corporations are putting senior executives in charge of climate change programs.
The CDP S&P 500 Report 2011, written by PricewaterhouseCoopers, follows a similar format to that of the Global 500 report released last week. For the S&P report, CDP analyzed disclosures from 339 of the largest US corporations by market capitalization. It also compiled a Carbon Performance Leadership Index (CPLI) and Carbon Disclosure Leadership Index (CDLI), based on company submissions to CDP, to rank the leaders of the S&P 500.
Combining the measures of performance and disclosure, UPS is the top S&P company at 99 points, followed by Cisco (98), Bank of America (97), Consolidated Edison and Sempra Energy (both at 96), and Dow Chemical and Gilead Sciences (both at 95).
The companies with the best carbon performance were (in alphabetical order) Air Products & Chemicals, Alcoa, Bank of America, Cisco Systems, Clorox, Consolidated Edison, CSX, Ecolab, Lockheed Martin, Molson Coors Brewing and Morgan Stanley.
The largest non-responding companies, by 2011 market capitalization, were Apple, Amazon and Berkshire Hathaway (which were all listed as non-responders in the Global 500), followed by Comcast, Honeywell, DirecTV, Express Scripts, National Oilwell Varco, EOG Resources and General Dynamics.
The report found that the proportion of companies that have senior executive or board members overseeing their climate change programs jumped from 68 percent in 2010 to 87 percent this year.
There was also a doubling of companies reporting climate change policies as an integral part of corporate business strategy, up from 35 percent of respondents in 2010 to 65 percent in 2011. For the first time, CDP has found that a majority of the S&P 500 disclosing companies now integrate climate change into core business strategy – mirroring its findings for the Global 500.
Meanwhile, 64 percent of respondents are setting greenhouse gas emissions reduction targets, up from 51 percent in 2010 and 32 percent in 2008. Among the Global 500, 74 percent disclose absolute or intensity emission reduction targets.
Respondents said they are seeing significant commercial benefits from emissions reduction and energy efficiency programs, with over 60 percent of projects offering payback in three years or less. This runs contrary to conventional wisdom, which presumes long payback periods for such efforts, CDP said.
The most common projects disclosed by corporations were improvements to energy efficiency in their facilities, to business processes and to transportation networks, supported both by capital investments and changes in employee behavior. CDP found that 54 percent of companies now offer financial incentives to staff for managing climate change issues, up from 35 percent in 2010, and compared to 65 percent for the Global 500.
Companies are also including climate change as a function of strategic planning to mitigate fiduciary and reputational risk, the report said. Firms surveyed cited the chance to shape investor perceptions as an important strategic opportunity, recognizing what the CDP says is increasing investor focus on how the environmental efficiency of an organization may impact future corporate earnings.