More U.S. corporations than ever before now factor climate change into the risks and opportunities faced by their businesses, according to a new report by the Carbon Disclosure Project (CDP), a coalition of institutional investors with more than $21 trillion in assets.
It suggests that increased interest from the investment community, in conjunction with related macro-economic developments, is encouraging the development of strategies to reduce greenhouse gas emissions.
The CDP's third report shows a marked increase in awareness of climate change and disclosure of related data among U.S. corporations, some of which are establishing leading positions in the growing markets for low-carbon technologies and solutions.
"Wall Street is waking up to climate change risks and opportunities," said James Cameron, Chairman of the Project.
"Considerably more of the world's largest corporations are getting a handle on what climate change means for their business and what they need to do to capture opportunities and mitigate risks. This all points to a continued elevation of climate change as a critical shareholder value issue for investors."
The CDP provides a secretariat for the world's largest institutional investor collaboration on the business implications of climate change.
It was launched five years ago to gather the information necessary for investors to evaluate the winners and losers from a future impacted by climate change and responses to climate change.
The CDP issued its third information request (CDP3) on behalf of 155 institutional investors with more than $21 trillion assets under management to the Chairmen of the FT500 companies in February 2005.
More than seven out of 10 FT500 companies – and six out of 10 U.S. FT500 companies - responded to the request.
While these figures represent a major increase in the number of U.S. companies disclosing information on emissions and climate change strategies to investors, companies such as Boeing, Home Depot, Wal-Mart, Apple and News Corporation still refused to participate.
But despite the fact that more than nine out of 10 of the responding companies acknowledged that climate change poses a real commercial risks to their business, the survey revealed a large gap between awareness and action.
Only half the companies were prepared to disclose their greenhouse gas emissions and fewer than one in seven actually reduced them over the last year.
Moreover, only half have implemented emission reduction programs, a third (35 per cent) report having taken early action in emissions and less than half - some 45 per cent - have established emission reduction targets.
More positively, however, almost two-thirds (63 per cent) are taking steps to assess their climate risk and institute strategies to reduce greenhouse gas emissions.
Steve Westly, Controller of California's sate retiremtn fund, CalPERS, one of the investors participating in the CDP, said that he believed it was inevitable that at some point the U.S. would join the other G8 countries and introduce limitations on the emissions of greenhouse gases.
"That is why we are leading investor collaboration to gather the data on corporate greenhouse gas emissions required to undertake prudent investment management," he said. "We encourage fund managers interested in our business to follow suit."