Businesses Must Do More to Address Climate Risk
By Christie Renner
Climate change poses risks to businesses and investors worldwide. Yet, mitigating those risks offers opportunities for growth and innovation. Many businesses are working to improve their reporting on climate change challenges and to expand their risk mitigation. Social investors can encourage business participation in the transition to a low-carbon economy by exercising their voting rights.
One group measuring the carbon disclosure and risk mitigation progress of the world’s largest companies is EIRIS, a global leader in research on environmental, social, and governance (ESG) issues. Their recent report, Climate Change Compass: The road to Copenhagen, analyses the progress of the 300 largest global companies.
Copenhagen is the site of the next United Nations Climate Change Conference, a twelve-day summit taking place in December 2009 for world leaders to develop policy and finance mechanisms to reduce the impacts of climate change. The EIRIS report shows some companies are doing more than others to prepare for the increased regulation expected to emerge from a global agreement at Copenhagen.
While reporting and responding to climate risks has increased overall since the EIRIS 2008 report, the new EIRIS report finds that more than a third of the largest companies have high levels of unmitigated climate change risk. In addition to calling for more disclosure, the report also calls for better disclosure—a need for more clarity and comparability of the data reported.
The Carbon Disclosure Project (CDP) has long been the central storehouse for company information about greenhouse gas emissions. CDP will release two annual reports in late September 2009—on carbon disclosure by the 500 largest global companies and the 500 largest U.S. companies—offering investors important information about which companies are best positioned to weather the road ahead and to help build a more sustainable future.
* Note: First Affirmative is a signatory to the CDP’s annual information request sent to companies around the world. CDP is the gold standard for carbon disclosure methodology.
Assistant to the CEO
Posted: August 12, 2009