Investor Collaboration Helps Reduce Corporate Emissions By 641 Million Tonnes

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A new infographic released at the COP21 summit in Paris today, shows the impressive results that can be achieved when investors incentivize corporate action on carbon reductions. CDP’s Carbon Action initiative has this year helped reduce global corporate greenhouse gas (GHG) emissions by 641 million tonnes of CO2e and led to a 130% increase in the number of emissions reduction projects such as improvements in energy efficiency, low-carbon energy purchase and installation, process emissions reductions and improved transportation use.

Carbon Action brings together an influential group of 304 investors now with US$22 trillion in assets – up from US$6.7 trillion and 35 investors at launch in 2011. The group asks companies to help tackle climate change in three ways: i) make emissions reductions; ii) publicly disclose emissions reduction targets; and iii) invest in emissions reduction projects with a positive return.

Carbon Action assesses companies in energy intensive sectors including oil & gas, electric utilities, materials, mining & metals, transportation and consumer staples.

Results include:

– A 77% increase in emissions reductions, amounting to 641 million fewer tonnes of CO2e in the atmosphere. This is equivalent to closing down over 168 coal-fired power plants. Responding companies up by 145% to 552, a sixfold increase since 2011 launch.

– 130% increase in the number of emissions reduction projects, with a 121% increase in investments in these, now US$86 billion.

– 23% of companies in CDP’s Carbon Action sample had no emissions-reduction targets in 2015, which continues to be cause for concern.

Helen Wildsmith, Strategic Advisor, CDP Investor Initiatives said: “In the run up to the climate negotiations in Paris a record number of companies were contacted by CDP’s investor-led Carbon Action initiative. This year these companies reported 641 million tonnes of cost-effective emission reductions in response to 304 investors with over $22 trillion of assets. ”

Throughout 2016 we’ll be re-grouping to: capitalize on the CDP data cleaning announced today; globalize the Carbon Catalyst Group that oversees the initiative from amongst CDP’s growing membership; and align the 2017 Carbon Action requests with CDP’s new sector research notes. The period through to 2020 is critical for climate change, and this action-oriented initiative’s second five years will help drive more strategic change across over 1300 major companies in high impact sectors.”

CDP is facilitating analysis around the exposure of companies and investor portfolios to carbon risk through strengthening the accuracy and completeness of the GHG emissions data available to investors. In collaboration with Enviance Inc. and two professors from Carnegie Mellon University, CDP has today launched a new methodology and supporting models to assess the accuracy of self-reported corporate emissions data and estimate Scopes 1, 2 and 3 emissions for companies that do not disclose them.

This will help inform discussions on areas such as carbon footprinting and give investors access to high quality emissions data for use in portfolio analysis. The inclusion of Scope 3 emissions signals investors’ changing perception of corporate GHG emissions from purely operational to value chain based.

The methodology has been applied to the Carbon Action sample and covers 6 years of Scope 1 and Scope 2 data, since 2009, as well as relevant up-/downstream Scope 3 Categories from the most recent reporting period. The full set of clean and complete data is available free for CDP’s investor signatories on the CDP Portal. A subset of the historical data is available to everyone on CDP’s Open Data Platform.

Download the infographic here.