Businesses get serious about carbon disclosure
For the first time since the Carbon Disclosure Project’s (CDP) inception seven years ago, more than half of Canada’s top 200 public companies have responded.
Created by a group of investors, the report was designed to measure the long-term performance of companies beyond the financials, to indicate if they’re taking climate change seriously and working to reduce greenhouse gas (GHG) emissions.
As scientists warn the impact of climate change will have far-reaching environmental, economic and social implications, the governments are putting the squeeze on industry by introducing emissions regulations, trading schemes and carbon taxes. Industry around the world is faced with climate change risks and opportunities. The CDP provides an avenue for shareholders, investors and the companies to communicate.
“It’s a forum for companies to report their carbon management performance to their shareholders in addition to their regular channels,” explains Len Coad, Conference Board of Canada’s director of environment, energy and transportation.
This survey also asks companies how they are managing the risk and opportunities related to GHG emissions; to report their current level of emissions; and what their activities, plans, targets and expenditures are for those emissions.
Three years ago, the Conference Board of Canada partnered with the CDP to develop an efficient exchange of information on climate change issues between investors and corporate communities, to advance business competitiveness and improve the disclosures provided by Canadian companies and international capital markets.
In this year’s report, out of the 200 Canadian companies asked to respond, 55% did. That’s a 10% increase over last year, and almost double the responses from 2006, which was about 28 per cent.
“They’re taking it seriously because most of these companies get money from private and public investors,” says Johanne Gelinas, partner in corporate responsibility and sustainability from Deloitte, a global consulting firm that has been a major sponsor of the report for the past three years. If companies don’t respond, Gelinas says investors who are strong proponents of disclosure may reconsider their investment.
In the high-carbon impact sectors, companies in the pipelines and oil and gas field services sector provided the highest quality of disclosure.
Gaz Metro Limited Partnership, for example, set an emissions intensity target to reduce the volume of natural gas delivered by 20% from its 1990 baseline year. Its 2006 data shows a reduction in intensity by more than 26 per cent. It also reported it will have to generate recurring GHG reductions of 350 tonnes annually between 2008 and 2012. To do this, Gaz plans to improve the energy efficiency of its buildings, the environmental performance of its equipment and reduce emissions from its gas system.
Fifty-eight per cent of the respondents who emit high levels of GHG are forecasting future emissions or energy use.
“More and more companies are now going way beyond just doing the baseline,” says Gelinas. “They are looking at strategies to reduce their costs through a better management of GHG.”
The CDP report revealed 49% of respondents have a GHG reduction management program in place. And more than half of the responses indicated a board committee had oversight responsibility for climate change.
“When we look forward, there are regulatory systems and processes federally and in some provinces,” says Coad. It will become easier for companies to respond because the information will be more readily available to corporations.
Moving forward, the Conference Board expects to see more participation and increased quality of participant’s disclosure.
For more information on the report visit www.conferenceboard.ca.