More Corporations Consider Climate Change

A growing number of international corporations are taking climate change into account when making business operations and investment decisions. However, environmentalists point out that many companies are still failing to make climate change a priority.

Earlier this month, the Carbon Disclosure Project (CDP) issued its 2008 information request asking more than 3,000 corporations around the world how climate change is affecting their business. Among the information CDP asks each company to provide: total greenhouse gas emissions, potential impact from regulations such as emissions limits, potential impact from environmental changes brought about by global warming, business reputation among consumers and strategies for cutting carbon emissions.

"The momentum behind CDP represents the start of a unified global business response to climate change," said Paul Dickinson, CEO of the Carbon Disclosure Project. "Investors recognize that corporate engagement with climate change issues is an important indicator of good quality corporate management."

Established in 2000, CDP is a non-profit collaboration of 385 institutions interested in knowing how the corporations they might invest in are dealing with climate change. With investment assets of $57 trillion, CDP first began gathering data from participating businesses in 2003.

This year's responses from participating businesses, along with analyses by CDP, are expected to be posted on CDP's Website in September. The data is accessible to the public and is available free of charge.

Investors involved with the Carbon Disclosure Project say they use the information to encourage more action by corporations that don't appear to be doing enough to address climate change.

Such businesses remain in the majority, according to a recent poll by the management consulting firm Accenture. Its survey of 500 large companies around the world found that only one business out of 20 considers global warming its top priority. On average, the executives polled ranked climate change eighth on their agenda, with more concerned that it would increase costs rather than offer opportunities.

That kind of thinking is short-sighted, according to British economist Nicholas Stern's comprehensive review of the economic costs of climate change. In his 2006 study, Stern concluded that actions to avoid the worst consequences of climate change would cost only about 1 percent of global gross domestic production (GDP). In contrast, a "business-as-usual" approach could end up costing the global economy anywhere from 5 to 20 percent of its annual GDP, Stern found.