Tuesday, September 30, 2014

Sustainability is Profitable According to the CDP's 2014 Climate Change Report

Some interesting insights came to light in the 2014 version of the annual CDP S&P 500 Climate Change Report. Overall the report suggests that companies in the S&P 500 are actively managing and planning for climate-change and the companies that do so are more profitable. The report indicates that for companies that are addressing climate change the return on equity was 18 percent higher than their peers and 67 percent higher than companies who do not disclose on climate change. The dividend yield for shareholders was 21 percent stronger then low ranking peers.

Further their results indicate that such efforts make them more stable with 50 percent lower volatility earnings over the past decade than low ranking peers.

As explained in the report, "Investors should take note that the debate has squarely moved from the moral to the material and should reward climate leaders with higher valuation multiples."

In addition to making some global observations, the report ranks companies based on their climate related disclosures to investors. Two indices are included in this report. the Climate Disclosure Leadership Index (CDLI) — a measure of a company’s transparency — and the Climate Performance Leadership Index (CPLI), a measure based on the transparency of the company’s actions to address climate change.

Bank of America, Cisco, General Motors and HP are among the eight leading S&P 500 companies in carbon-reduction efforts and disclosure. These companies along with Autodesk, BNY Mellon, Pepco Holdings and Spectra Energy, all earned an A grade for their actions to reduce climate change and the highest possible disclosure score, 100 out of 100 points.

To access the full report click here (PDF)

© 2014, Richard Matthews. All rights reserved.

Video - Companies Combating Climate Change (CDP Report)
The Best and the Worst Climate Performers (CDP)
Climate Action Enhances Profit by 9.6% (2014 CDP Report)
CDP Studies: Growth of Sustainability and Profitability
CDP Report Shows Sustainability Offers a Competitive Advantage & Better ROI
Corporate America is Benefiting from Taking Action on Climate Change
CDP Climate Disclosure Leaders List 2014
CDP Climate Performance Leaders List 2014
CDP Global 500 Climate Disclosure Leadership Index 2013
CDP Global 500 Climate Performance Leadership Index 2013
CDP Global Climate Change Leaders 2013: Top 12 Companies According to Both CPLI and CDLI
The CDP's 2013 Top Fourteen US Companies (Disclosure and Performance)
CDP Studies: Growth of Sustainability and Profitability
The Low Carbon Business Opportunity
US Firms are Improving but they are Being Outperformed on Sustainability
Top Ten Companies in the 2012 Carbon Disclosure Project Report
CDP Report Shows a Growing Number of Companies See the Risks Posed by Climate Change
CDP Identifies Germany as the Global Sustainability Leader
CDP Report Shows a Growing Number of Companies are Embracing Sustainability

No comments: