Vancouver, Canada (GLOBE-Net) - Canadian and international firms are becoming more aware of the risks of climate change, but few have actually been effective at reducing greenhouse gas emissions. That’s according to a comprehensive report issued by the Carbon Disclosure Project (CDP), a collaboration of investors that has surveyed the world’s largest companies on their carbon emissions since 2002.

The CDP issued questionnaires to the FT500, the most valuable, largest companies globally, on behalf of investors which represent over $21 trillion of assets under management. This year, CDP3 received the largest percentage of responses, and also showed that awareness of climate change risk is growing among the world’s corporate giants.

However, less than one in seven of those companies have actually achieved a reduction in emissions over the past year, and one-sixth reported that emissions had increased. Some of the world’s largest companies, including Boeing, Apple, Home Depot, News Corporation and Carnival, did not respond to the survey at all, indicating a lack of awareness of climate change risk that is worrying to both investors and environmentalists.

Canadian participation

Canada fared better than many countries in the report, but the news was not all positive. Eight percent of the investor signatories to the Project were from Canada, and Canadian firms had a relatively high response rate, ranking third behind Europe and Japan.

The government’s recent initiatives to create a Domestic Emissions Trading System (DETS) likely spurred a number of large companies to examine emissions further, as the future benefits of earning carbon credits becomes clear. Canada will join similar schemes in Europe and Japan when the DETS comes into effect, likely not until 2008. But it is important for firms to prepare now so they can gain a competitive advantage in the market.

See article: Canada to establish emissions trading market

Canada still ranks as one of the largest per-capita emitters of greenhouse gases (GHGs) in the world, sitting at third behind the United States and Australia. Currently, Canada is emitting 270 Mt more than our stated target under the Kyoto agreement, a gap which has been growing in recent years. It is hoped that government initiatives and growing corporate awareness will help Canada to meet the Kyoto goal by 2012.

The Canadian government came through as one of the most active in promoting carbon trading programs, and has been involved as a sponsor of three major carbon funds: the World Bank Prototype Carbon Fund (PCF), the World Bank Community Development Carbon Fund (CDCF), and the World Bank BioCarbon Fund (BCF). Such government involvement is seen as a key to achieving reductions in corporate emissions over time.

Awareness for corporations often starts only when the bottom-line is affected, so describing the financial impacts of climate change is important. The Canadian Institute of Chartered Accountants (CICA) was praised in the report as the most advanced at providing accounting guidance on these impacts. The CICA has released a disclosure framework for communicating climate change risk, and has begun research on capturing emissions credits and liabilities in financial statements.

Some Canadian firms have already developed an awareness of climate change risk, including Royal Bank, which remarked that “climate change, policies to address climate change, and adaptation strategies all present both risks and opportunities to our company…it is for this reason that we have a multi-stage Carbon Risk Program uunderway.”

CIBC also “recognizes that the issue of climate change poses both risks and opportunities,” and has created an environmental mortgage product that offers rebates to holders of designated energy-efficient homes.

Less progressive companies included Sun Life Financial, which concentrated their discussion on managing the physical implications of climate change in their office buildings.