Thursday, 14 April 2011

The CDP’s Carbon Action Initiative: What you need to know

Last week the CDP (Carbon Disclosure Project) announced its new Carbon Action initiative, an initiative led by institutional investors who combined manage assets of over $7.6 trillion dollars.

The initiative is fueled by an overwhelming belief that an increasingly fossil fuel constrained economy will have immense cost and other impacts on the performance of businesses worldwide. And, the investment community wants to know that the companies they invest in are doing something to manage these impacts. The logic follows that reducing costs now and warding off future price increases will deliver greater shareholder value both immediately and in the long run.

To add to this, the signatories of the Carbon Action initiative, which include groups like CCLA Investment Management, Aviva Investors, Boston Common Asset Management, and Calvert Asset Management have said that starting in 2013, they will begin divesting in companies that do not publicly disclose reduction targets to the CDP.

Steve Waywood, Head of Sustainability at Aviva Investors, a founding supporter of Carbon Action, commented, “We believe that the external costs of greenhouse gas emissions will become internalized into company cash flows and profitability. We encourage companies to consider what actions that they can take now to reduce emissions”

Through the Carbon Action initiative, the CDP is encouraging companies to do the following:

1. Measure and report your GHG emissions

2. Make year-on-year emissions reductions

3. Identify and implement investments in GHG reduction initiatives that will have a positive return on investment

4. Publically disclose emission reduction targets

What does this mean for your business? Two things, if you are a Global 500 company, you will have already received your CDP request for information letter. If not, you may experience a trickle down effect if you work with Global 500 companies looking who will be looking for new opportunities to reduce carbon (and costs) in their supply chains.

If you need help with your CDP response, or are interested in protecting or boosting your brand reputation by making an unsolicited response, Carbon Clear can help. Visit