Investors call on companies to reduce their greenhouse gas emissions

A new investor-led CDP initiative, Carbon Action, launched this month in response to investor requirements to accelerate company action on carbon reduction activities.
A vanguard group of 35 investors with US$7.6 trillion in assets including Aviva Investors, CCLA Investment Management and Scottish Widows Investment Partnership (SWIP) are requesting that the largest 500 public companies in the world take concrete action to reduce their emissions.
Steve Waygood, Head of Sustainability, Research and Engagement at Aviva Investors, a founding supporter of the Carbon Action initiative, says: “We believe that the external costs of greenhouse gas emissions will become internalised into company cash flows and profitability. We encourage companies to consider what action that they can take now to reduce emissions.”Find out more about this first investor request to reduce emissions.

Emissions link to profitability drives new Carbon Action initiativeThere are significant business benefits for companies in reducing their emissions and this is the driving force behind CDP’s new investor-led initiative, Carbon Action.
Craig Mckenzie at Scottish Widows Investment Partnership believes: “Often companies do not need to make a choice between ethical goals or higher financial returns – that’s the great attraction. In the face of rising energy costs reducing emissions means making more money.”

There is multiple evidence that disclosure has already helped encourage companies to set emissions reduction targets. Vestas, one of the founding supporters of Carbon Action, tells us: “It does take time to understand what is required in the reporting process and to collect answers from across the organization but it helps to set targets and maximize reductions.”
Carbon Action now goes a step further asking companies to undertake concrete action to reduce greenhouse gas emissions. This is a natural evolution, but it also represents a new era in investor focus on the benefits of carbon reductions.

A commitment to verificationCDP strongly encourages the application of robust and credible verification procedures in the collection of carbon emissions data, as well as the actions taken to reduce them.
Whilst companies are not currently required to verify the data submitted to CDP, it is encouraged through the scoring methodology which allocates a noteworthy percentage of points to verification. To qualify for entry to the Carbon Performance Leadership Index companies must verify their Scope 1 and 2 data.
CDP has formed a verification working group, in which we collaborate closely with selected verification partners -- Bureau Veritas, LRQA and TÜV NORD -- in order to support reporting companies with helpful resources and further develop CDP’s approach to verification. As part of this work, the CDP is developing a verification strategy that will be published in the summer of 2011 and communicated to reporting companies globally.