By sending out an annual questionnaire requesting climate-related information from the world's largest corporations, the Carbon Disclosure Project (CDP) has made a tremendous impact on the business world.
 | Paul Dickinson, coordinator of the London-based Carbon Disclosure Project |
The initiative has mobilized over 200 institutional investors across the globe to consider the issue of climate change and thus increased financial pressure on corporations to do the same. Paul Dickinson, CDP Coordinator, is convinced that the initiative could be a catalyst for the development of a clean-energy economy.
There are many initiatives around the globe that encourage the business world to act in a more sustainable manner. What makes the CDP so unique in its endeavours?
We believe the key sustainability issue facing the world today is climate change, as its potential devastating consequences will affect every human being in the world. Therefore, our organization is 100-percent devoted to facilitating the largest possible response on climate change from the two most-powerful communities in the world: the largest global corporations and their investors. We want to stimulate a meaningful dialogue between investors and corporations on climate change, and motivate them to take action.
How can these global target groups meet the climate challenge?
The rapid rise in recent years in the number of investors who support the initiative shows how the project is broadening its relevance to and impact on the global investors community. Two hundred and thirteen investors managing thirty one trillion US dollars are now backing our initiative. In February 2006, they wrote to some two thousand of the world’s biggest companies, demanding that they disclose their position on climate change. This collective financial market power is proving to be an effective tool in encouraging corporations to take responsibility for the environmental costs and risks of their activities.
Can public pressure generated by a single annual request really make a difference in the way companies deal with climate change?
We have numerous examples of companies changing strategy in a substantial and positive way in response to the CDP information request. But they do not always publicly advertise the fact that it was their shareholders who pushed them to change direction. Microsoft, for example, said in the 2004 CDP questionnaire that “due to the categories of products and services we produce, Microsoft does not quantify emissions and has no current plans to do so.” The following year, the company pointed out that some of its products not only enhanced productivity, but also reduced the need for business travel, (thereby) “having a positive effect in reducing the climate change impacts of businesses.”
Jeffrey Immelt, CEO of General Electric, the world’s largest corporation, said in response to the CDP 2003 questionnaire: “We are moving ahead with data collection and analysis to enable us to plan for the future.” Two years later, GE came up with “ecomagination”, an environmental strategy designed to generate significant profit growth from climate-friendly products and services.
Through meetings with many companies, we have learnt that even where the management fails to respond to our request, they have often initiated internal discussions about establishing policies on climate change mitigation. This gives us the confidence that our approach makes a tangible impact on corporate efforts to combat climate change.
Regarding investor involvement in climate change, how can they contribute to a clean, low-carbon economy?
The number of leading institutions supporting the Project shows us that the mainstream investment community is becoming ever more aware of climate change and sustainability related issues. Utilizing the power of the financial markets, they should continue to ramp up pressure on corporations to meet their climate risks and implement environmentally sustainable business solutions.
Our key aim is still to mobilize investors so that over time essential private sector capital flows will be shifted towards low-carbon solutions. The International Energy Authority, for example, estimates that more than 17 trillion US dollars will be invested in energy over the next 30 years. If we want to ensure a safe and sustainable future, we must make sure that this investment is in clean energy. One of our major long-term goals is to make this happen. We are looking for realistic but radical and lasting changes made by investors and corporations to meet the climate challenge.
editor: Julia Leuffen
publishing date: March 30, 2006
