Video - Companies Combating Climate Change (CDP Report)

In this video, Lord Adair Turner, Former Chairman of the Financial Services Authority, James Bevan, Chief Investment Officer at CCLA and Paul Simpson talk about the CDP report which ranks companies in terms of their climate performance. This report comes on the heels of Standard & Poor's Ratings Services which stated that climate change will hit countries' economic growth rates and public finances. Former U.S. Treasury Secretary Henry Paulson recently said that climate change is, "the single biggest risk that exists to the economy today."

The Best and the Worst Climate Performers (CDP)

In addition to ranking corporate leaders, the most recent CDP report lists the leading sectors in terms of climate performance. It reviews regional and national climate leaders and laggards. The report also singled out a few large corporations which refused to disclose their climate performance data. Performance leaders are those who received an "A" grade in the report.

According to the CDP, the sectors most represented in the 2014 Climate Performance Leaders Index are Information Technology, Financials, Consumer Staples, Consumer Discretionary and Industrials. Together these four sectors constitute 86 percent of the A list index.

According to the CDP's climate performance list, almost half of the leaders are based in Europe, with a further third located in either the US or Japan. More than a quarter of the Spanish and Belgian companies that took part in CDP’s climate change program were awarded an A rating. Other nations that performed well are Portugal, the Netherlands and South Korea.

By contrast, the laggards on climate performance are Canada, Switzerland, Australia and China.

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.

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."

CDP Climate Disclosure Leaders List 2014

CDP Climate Performance Leaders List 2014