The “CDP Canada 200 Climate Change Report 2013” is based on responses to CDP’s 2013 climate change questionnaire, which was sent to Canada 200 companies on behalf of 722 institutional investors – CDP signatories – representing $ 87 trillion in assets, of which 55 are Canada-based, with $ 4.4 trillion in combined assets.
Canada’s largest and most influential companies, known as the “Canada 200”, are demonstrating through their annual CDP climate change information request that performance opportunities emerge through increased corporate transparency. As expected, analysis of disclosures from the Canada 200 respondents validates the 2012 CDP Canada report theme of “Improving Transparency as the Foundation for Carbon Performance”. These companies are also showing strong progress on managing risk, discovering opportunities to create business value and making profitable investments into emissions reduction initiatives.
While Scope 1 and 2 emissions increased 8% from 2012 to 231 million metric tons CO2e, for the sample of companies that responded in both 2012 and 2013, the increase was only 3%. This indicates that the majority of the increase in reported emissions came from new respondents. Finally, the value of CDP disclosure is increasingly appreciated by Canadian businesses, as more companies from the Canada 200 than ever before have disclosed via CDP this year: 115 up from 107 in 2012, for a response rate of 58%.
Key Findings of 2013 CDP Canada 200 Report
Climate disclosure and performance scores are higher than ever
- Corporate transparency on climate change is improving, as evidenced by an 18% increase in average disclosure score of the Canada 200 respondents (to 71 from 60 in 2012);
- The range of scores for the most transparent companies, known as the Climate Disclosure Leadership Index (CDLI), is increasing, ranging from 86 to 95 with an average of 90 (up from a range of 77 to 91 with an average of 83 in 2012);
- Companies are increasingly managing climate change, as nearly double the number of companies achieved top performance bands of A and B (23 companies in 2013 up from 12 companies in 2012); and
- Since 2010, CDLI companies have delivered total returns of 33.5%, significantly higher than the Canada 200 returns of 22.0%. Since 2012, companies that received performance A or B bands delivered total returns of 13.7%, greater than the Canada 200 returns of 9.9%.
Companies are increasingly aware of climate change-related risks, as well as opportunities to create business value
- While the proportion of respondents reporting risks increased by 5%, the total number of risks related to climate change increased by 25% to 621 risks in 2013, indicating an increase in average number of risks reported per company;
- 284 regulatory risks, such as carbon and fuel taxes are reported, followed by 223 physical risks, such as extreme weather, and 114 other climate change risks, such as impact on a company’s reputation;
- Companies report that 75% of regulatory risks and 47% of physical risks are expected to materialize within five years;
- While the proportion of companies that have reported opportunities has increased by 2%, the total number of opportunities related to climate change rose 27% from 2012, indicating an increase in average number of opportunities reported per company; and
- Increased demand for existing products and services is the most frequently cited potential impact from climate change opportunities, accounting for 41% of all reported impacts.
Companies are continuing to show progress on climate change management and performance
- Companies report 386 emissions reduction initiatives, up from 324 in 2012. While the proportion of companies that report emissions reduction initiatives increased from 72% in 2012 to 82% 2013, the number of reported initiatives increased by 19%, indicating an increase in the average number of initiatives reported per company;
- $ 6 billion was invested in emissions reduction initiatives; respondents realized a total of $ 679 million and 8.2 million metric tons CO2e in annual savings;
- Eighty-five percent of respondents report that climate change is integrated into their business strategy – up from 77% in 2012;
- Sixty-four percent of respondents offer incentives of some kind for climate performance – up 14% from 2012; and
- Forty-nine percent of companies disclose having set an emissions reduction target – up 6% from 2012.