Carbon Disclosure Project

Banking and financial giants Banco Santander, Banesto, Banco Bilbao Vizcaya Argentaria (BBVA), Henderson Group plc and APG Asset management joined together in calling for cost effective action on reducing carbon emissions. They are just some of the newest members of the Carbon Disclosure Project (CDP), a project that claims to hold the world’s largest collection of self-reported corporate environmental performance data. They have joined 92 other institutional investors - with a net worth of over $10 Trillion USD - in proactively driving the global finance community to take more action focused on reducing climate change related risks, while recognizing the environmental and cost reduction benefits of a strategic joint approach to tackle these challenges.

Research by McKinsey & Company , a global management-consulting firm indicates that most companies have the option to reduce carbon emissions, which can result in a CO2 global emissions reduction of 12 Gigatonne representing a cumulative reduction of 25% by 2030. More importantly, this also means significant long-term cost reduction potential for organizations.

Paul Abberley, CEO at Aviva Investors London, says: “We were a founding signatory because we believe that the external costs of greenhouse gas emissions will become internalized into company cash flows and profitability. There still remains huge potential in companies for achieving cost effective emissions reductions but we are so pleased that there has been such increased support this year.”

Members of the CDP, have sent Climate Action letters calling for 415 of the world’s largest public companies to also join in their effort and recognizing the climate change risks and potential benefits of a proactive mitigation approach.

Some climate action items included in the letters include suggestions include the following: Make year-on-year emissions reductions; Invest in emission reduction activities with a positive return on investment; Set and publicly disclose an emissions reduction target that covers the principal sources of emissions in their business if they have not already done so; Demonstrate management and steps toward reduction of emissions across their supply chains.

By pursuing such measures and participating in the project, the CDP signatories hope to lead other in the industries to drive increased visioning at the management level in regards to carbon emissions reduction and large scale change through collaborative economies of scale. CDP first launched its emissions disclosure programme in 2002 with the backing of 35 institutional investors, requesting transparency from public companies of their carbon emissions. There are now over 655 signatories representing $78 trillion in assets that are part of the CDP, and disclosure rates among the world’s largest companies run at 80%. CDP data is downloaded on average more than 730,000 times a month via Bloomberg terminals.