Carbon Disclosure Project
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International agreements such as Kyoto have proved problematic, whilst individual governments are reluctant to develop stringent national limits on emissions for fear of companies relocating factories and jobs to nations with laxer regulatory regimes. The Carbon Disclosure Project (CDP) side steps these national interests. CDP brings together institutional investors to focus attention on carbon emissions, energy usage and reduction – wherever companies and assets may be located.
Greenhouse gas emissions (ghg) from large corporations are a major driver for global climate change, with some corporations having higher emissions than individual nation states. A few leading companies have moved to become carbon neutral, but for most there is enormous scope to reduce energy usage and climate related risk by adoption of energy efficiency methods and business planning that enables success in a carbon constrained economy.
CDP works with 2,300 of the largest corporations globally to help them ensure that an effective carbon emissions / reductions strategy is made integral to their business. It is taken seriously because of the size of the shareholdings backing CDP - 304 institutional investors with $41 trillion under management. CDP operates from New York and London and has partners in 16 of the world’s major economies which help deliver the programme globally. It has:
- Established the world’s largest repository of GHG emissions and energy use data accounting for some 26% of global anthropogenic CO2
- Started to establish a globally used standard for emissions and energy reporting
- Examined the 265 major electricity utilities globally (high GHG emitters)
- Obtained backing from blue chip investors including HSBC, JP Morgan Chase, Bank of America, Merrill Lynch, Goldman Sachs, AIG and State Street
- Active staff or partner organisations in US, Japan, Germany, China, UK, France, Canada, Netherlands, Brazil, Australia, New Zealand
Much of the data elicited has never been collected before. This information is helpful to investors, corporations and to regulators in making informed decisions which take into account corporate risk from future government legislation, possible future law suits and shifts in consumer’s perceptions towards heavy emitters. An estimated $27,000 billion will be spent over the next 30 years on energy related capital developments (new power plants, fuel distillation plants etc). It is vital that the right technologies are adopted. In particular:
• Giving higher priority to energy efficient design in new capital projects • Declaring firm targets for capping and reducing corporate emissions • Identifying new low carbon business opportunities • Pricing in how, under different scenarios, the price of carbon emissions will shift the economics of alternative sources of energy.
The process of companies having to respond to CDP delivers real changes in business practice resulting in lower energy use. In many cases this leads to a higher proportion of energy being sourced from renewables.
CDP has IRS 501(c)3 charitable status through Rockefeller Philanthropy Advisers in New York. and is in the process of registering as a Uk charity.
