More US public company boards are making climate change issues a regular part of their strategic risk oversight.
The 2012 Carbon Disclosure Project (CDP) S&P 500 Climate Change Report, co-written by PwC and the CDP and released on September 12, shows that 92% of the 2012 S&P 500 respondents reported board or executive-level oversight over sustainability issues including carbon reduction, compared to 86% in 2011. The findings also indicate that 25% of respondents disclosed greenhouse gas (GHG) information in their annual reports, up from 18% in 2011. [For more highlights and the full reports, go to the PwC/Carbon Disclosure Project web site.]
U.S. firms are making progress in both transparency and carbon reduction goals, according to the report. It also provides an annual update on GHG emissions data and climate change strategies at America’s largest public corporations.
In the absence of global or national regulation on climate change, respondents report that investor pressure, market forces, and physical risks are the key drivers for action:
"The results highlight a tipping point in the actions being taken in American C-suites and boardrooms to integrate a sustainability agenda into overall business strategy", said Doug Kangos, PwC partner for Sustainable Business Solutions. “The takeaway from this year's report is clear: more S&P 500 companies have begun to view climate change as critical to their long-term resilience."
The report is based on 338 responses, or nearly 68% of the S&P 500 companies. This compares to the Global 500 CDP report, also released on September 12, which received 379 responses, or 81% of the world’s 500 largest companies based on market capitalization. Despite the difference in response rate, which is consistent with the previous two years, U.S. companies narrowed a historic gap with the Global 500 on many key disclosure and performance indicators.
“The best interests of investors are catalyzing U.S. companies to improve the management of environmental risk, which is vital if we are to forge a more sustainable economy," said CDP's Executive Chair Paul Dickinson, who is also a member of the Environmental Research Group of the UK Faculty and Institute of Actuaries.
What directors should know about the CDP S&P 500 Climate Change Report: