HELPING COMPANIES DRIVE DOWN CARBON EMISSIONS

The Motivation

Climate change is a key consideration for many investors. In 2006, a review by Lord Stern predicted that significant costs to the global economy will result from the changing climate.

Climate change is highly likely to impact the future cash flows of companies. It is increasingly important that investors have the information to help them understand how well-prepared companies are for the future.

The Opportunity

Over the last three years Aviva Investors has been encouraging companies whose operations are highly resource-intensive or carbon-emitting to disclose their carbon emissions through the independent, not-for-profit Carbon Disclosure Project (CDP).

Thousands of organisations from across the world’s major economies measure and disclose their greenhouse gas emissions and climate change strategies through the CDP.

In 2007, Aviva Investors contacted 29 companies who had not responded to requests to disclose their carbon emissions. Two years on, over three quarters of the companies (79 per cent) have now provided a response to CDP. Aviva Investors continues to engage with the remaining non-responders.

Aviva Investors continues its enagagement in 2009, identifying a further eight companies that have a high climate change impact, but so far have not disclosed their carbon emissions.

The Impact

Says Steve Waygood, Head of sustainability research and engagement, Aviva Investors, “It appears that our focus on climate change disclosure has produced some good results, and we will continue to support the Carbon Disclosure Project in this way.

However, we are also keen to ensure that we move beyond simple disclosure of emissions data, and help create an environment within which companies are improving their performance and driving down their emissions.”

Provided by Aviva Investors