Monday, October 20, 2014

Climate Action Enhances Profit by 9.6% (2014 CDP Report)

Engaging climate change is becoming almost synonymous with profitability. According to a new study, the more a company does to address climate change the more it appears to profit. This is a solid refutation of the conservative line the we simply cannot afford to manage climate change. It flies in the face of the false argument that we must chose between combating climate change and economic growth.

Companies from Apple to Zurich are showing climate leadership is not only a corporate responsibility it is also spawns a bevy of bottom line benefits. According to new research from CDP, companies that assume the responsibility to engage climate change outperform their peers. In fact, in the period between 2010 and 2014, companies that showed leadership through action to mitigate climate change outperformed the Bloomberg World Index by 9.6 percent.

From a total of 1,971 companies a total of 187 earned a top grade and ended up on the CDP index. Together these companies have reduced their carbon emissions by 33 million tons in the last year alone. The A List represents just 9 percent of almost 2000 companies assessed but they account for $23 billion of the annual investment to reduce carbon emissions. The complete list of 1,971 companies invested $50 billion in carbon reduction.

The CDP says that these companies will yield win-win results; apply a business lens to climate change; raise the bar on investment; and shift away from short-termism.

This is the finding in The A List: The CDP Climate Performance Leadership Index 2014 (CPLI).

"The unprecedented environmental challenges that we confront today – reducing greenhouse gas emissions, safeguarding water resources and preventing the destruction of forests – are also economic problems," says Paul Simpson, chief executive of CDP. "One irrefutable fact is filtering through to companies and investors: the bottom line is at risk from environmental crisis."

© 2014, Richard Matthews. All rights reserved.

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