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Discovering corporate sustainability trends & tremors through CDP disclosure assessment
 

Discovering corporate sustainability trends & tremors through CDP disclosure assessment

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This presentation, which was presented on 25.Sept.13 at Sustainable Brands' "New Metrics" conference, covers several observations and insights from CDP disclosure assessment that speaks to each of the ...

This presentation, which was presented on 25.Sept.13 at Sustainable Brands' "New Metrics" conference, covers several observations and insights from CDP disclosure assessment that speaks to each of the key themes of the panel (Trends, Tremors and Tools).

In trends, there are a few key metrics from the CDP Global 500 landscape that can serve as a rationale for why now is the time to hone in on sector specific challenges, such as a "Tremor" of minimally disclosed Scope 3, investments and lending emissions data from Financials and ending with a market developments of standardizing Scope 3 Investments calculations, as well as how the CDP platform can be utilized by Financials, and their equity holdings, to advance efforts to collect, disclose, manage and share this critically important corporate environmental sustainability data set.

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    Discovering corporate sustainability trends & tremors through CDP disclosure assessment Discovering corporate sustainability trends & tremors through CDP disclosure assessment Presentation Transcript

    • www.cdp.net | @CDP @StephenDonofrio Page 1 Discovering corporate sustainability trends & tremors through CDP disclosure assessment Sustainable Brands #NewMetrics Philadelphia 25th September 2013 Stephen Donofrio Vice President, Partnerships & Innovation Stephen.Donofrio@CDP.net / 212.378.2086 132 Crosby Street, 8th Floor, New York, NY 10012
    • www.cdp.net | @CDP @StephenDonofrio  Trends  Tremors  Tools Agenda 2 Increasing investor interest & corporate disclosure Quality of corporate disclosure is ever-improving Scope 3: Financed emissions minimally reported by financials Scope 3: Investments methodologies exist, but no standard Case Studies of Scope 3: Investments calculated by financials CDP overview Action and engagement on financed emissions
    • www.cdp.net | @CDP @StephenDonofrio  Trends  Tremors  Tools Agenda 3 Increasing investor interest & corporate disclosure Quality of corporate disclosure is ever-improving Scope 3: Financed emissions minimally reported by financials Scope 3: Investments methodologies exist, but no standard Case Studies of Scope 3: Investments calculated by financials CDP overview Action and engagement on financed emissions
    • www.cdp.net | @CDP @StephenDonofrio Trends: Increasing investor interest & corporate disclosure To transform the global economic system to prevent dangerous climate change and value our natural resources by putting relevant information at the heart of business, investment and policy decisions. Forests 100 Companies disclosed in 2012 Water 340+ Companies disclosed in 2012 Climate Change 4600+ Companies disclosed via CDP in 2013 0 15 30 45 60 75 90 0 150 300 450 600 750 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Assets($trillion) NumberofSignatories CDP Signatories & Signatory Assets: 2003 - 2013 Climate change signatories Water signatories Forests signatories Climate change assets Water assets Forests assets 4
    • www.cdp.net | @CDP @StephenDonofrio Trends: Quality of corporate disclosure is ever-improving Transparency 97% min score for G500 disclosure leaders in 2013  8% increase from 2011 Page 5 Verification 71% of G500 companies verified their GHGs in 2013  2X % from 2011
    • www.cdp.net | @CDP @StephenDonofrio  Trends  Tremors  Tools Agenda 6 Increasing investor interest & corporate disclosure Quality of corporate disclosure is ever-improving Scope 3: Financed emissions minimally reported by financials Scope 3: Investments methodologies exist, but no standard Case Studies of Scope 3: Investments calculated by financials CDP overview Action and engagement on financed emissions
    • www.cdp.net | @CDP @StephenDonofrio Page 7 Energy:  Energy companies’ reported scope 3 emissions are 4X higher than the sector’s scope 1 and 2 emissions;  98% of these are emitted through the use of sold products. whereas… Financials:  Financials makes up 24% of respondents, however, represents only 0.6% of total S1+2 emissions;  Only 6% report the carbon impact of their investments… Tremors: Scope 3: Financed emissions minimally reported by financials
    • www.cdp.net | @CDP @StephenDonofrio  - RBS’s true carbon emissions 2012, The World Development Movement (WDM) Under the CDP, in 2012 RBS reported greenhouse gas emissions of 735,437 tonnes of carbon dioxide equivalent (tCO2-e)... RBS did not report any emissions resulting from the money it loans to fossil fuel companies or projects. These ‘financed emissions’ resulting from the bank’s loans to coal, oil and gas companies bring the bank’s 2012 carbon footprint to up to 1,200 times the footprint reported... Page 8
    • www.cdp.net | @CDP @StephenDonofrio Tremors: Scope 3: Investments methodologies exist, but no standard  Various approaches exist: 2o Investing Initiative id’ed a dozen  Standardization efforts: results in 2014-2015? UNEP-FI (global) & VfU (regional)  Methods mentioned in CDP’s 2013 disclosure cycle: UNEP-FI (10 mentions), GHG Protocol (9 mentions), VfU (7 mentions), WRI (7 mentions) & WBCSD (3 mentions) 9   Investments are categorized as a downstream scope 3 category because the provision of capital or financing is a service provided by the reporting company. - GHG Protocol (WRI/WBCSD)
    • www.cdp.net | @CDP @StephenDonofrio Tremors: Scope 3: Investments methodologies exist, but no standard 10   There are many factors to be considered including availability, credibility, and consistency of information as well as the direction of the regulatory landscape in North America. - Bank of Montreal 2013 CDP Climate Change Disclosure We have tested all available methodologies to assess GHG emissions from investments, but none of them meets our criteria in terms of reliability and bias. - BNP Paribas 2013 CDP Climate Change Disclosure  
    • www.cdp.net | @CDP @StephenDonofrio Case Studies of Scope 3: Investments calculated by Financials Commonwealth Bank of Australia  % of financing X total lifetime project emissions  1 project (25 year life) in ’12  Uses Australian govt’s def. of ‘emissions intensive’ to identify deals closed during reporting yr Page 11 July1, 2011 - June 30, 2012 (metric tonnes CO2) Scope 1 11,160 Scope 2 145,989 Scope 3 39,634,361 39,791,510 S3 Investments 39,469,868 S3 Investments/Total 99% S3 Investments/(S1+S2) 251 times
    • www.cdp.net | @CDP @StephenDonofrio Case Studies of Scope 3: Investments calculated by Financials Mizuho Financial Group  % of equity x emissions as reported to CDP or other  Top 30 companies held by the parent company  Accounts for ~20% of the value of consolidated non- investment holdings Page 12 April 1, 2012 - March 31, 2013 (metric tonnes CO2) Scope 1 16,177 Scope 2 202,850 Scope 3 8,658,200 8,877,228 S3 Investments 8,601,803 S3 Investments/Total 97% S3 Investments/(S1+S2) 39 times
    • www.cdp.net | @CDP @StephenDonofrio Case Studies of Scope 3: Investments calculated by Financials Citigroup  % of financing X total lifetime project emissions  1 project (30 year life) in ’11  Project-specific GHGs are derived from the plant’s capacity & heat rate, the carbon content of the fuel, and projected capacity utilization Page 13 January1, 2011- December31, 2011 Scope 1 36,751 Scope 2 1,039,178 Scope 3 7,528,870 8,604,799 Scope 3Investments 7,400,000 S3Investments /Total 86% S3Investments /(S1+S2) 7 times (metrictonnes CO2)
    • www.cdp.net | @CDP @StephenDonofrio  Trends  Tremors  Tools Agenda 14 Increasing investor interest & corporate disclosure Quality of corporate disclosure is ever-improving Scope 3: Financed emissions minimally reported by financials Scope 3: Investments methodologies exist, but no standard Case Studies of Scope 3: Investments calculated by financials CDP overview Action and engagement on financed emissions
    • www.cdp.net | @CDP @StephenDonofrio Tools: CDP overview  CDP is an international, not-for- profit organization providing the only global system for companies and cities to measure, disclose, manage and share vital environmental information.  Mission is to transform the global economic system to prevent dangerous climate change and value our natural resources by putting relevant information at the heart of business, investment and policy decisions. CDP has 501(c)3 charitable status in the U.S. via its fiscal agent and sponsor liaison, Rockefeller Philanthropy Advisors 15
    • www.cdp.net | @CDP @StephenDonofrio Tools: Action and engagement on financed emissions General Motivations:  Pressure from NGOs.  Companies want investor feedback  Mandatory reporting requirements will increase CDP Efforts:  UNEP-FI Scope 3 - Investments task force  CDP is increasing work on sector disclosure & materiality focus  CDP could be utilized as a financed emissions reporting tool Page 16
    • www.cdp.net | @CDP @StephenDonofrio Page 17 Discovering corporate sustainability trends through CDP disclosure assessment Sustainable Brands #NewMetrics Philadelphia, 25th September 2013 Stephen Donofrio Vice President, Partnerships & Innovation Stephen.Donofrio@CDP.net / 212.378.2086 132 Crosby Street, 8th Floor, New York, NY 10012