CDP 2009 Industry Snapshots Global 500/S&P 500/FTSE
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CDP 2009 Industry Snapshots Global 500/S&P 500/FTSE 350 Report written for Carbon Disclosure Project Carbon Disclosure Project by: [email protected] +44 (0) 20 7970 5660 www.cdproject.net Industry snapshots Contents Consumer Discretionary sector report 2 Consumer Staples sector report 15 Energy sector report 26 Financials sector report 37 Health Care sector report 55 Industrials sector report 65 Information Technology sector report 79 Materials sector report 91 Telecommunications sector report 102 Utilities sector report 112 1 Consumer Discretionary sector report Covering Global 500, S&P 500 and FTSE 350 listed respondents Introduction At the moment, In 2009, the Carbon Disclosure Project specific analysis of the responses and there are three different (CDP) received the highest response has chosen to present this in a series institutions to regulate rate to date, the highest level of of sector reports. fuel economy standards disclosed emissions and greater detail than ever before on the activities being This sector report, prepared by in the United States. undertaken by the largest corporations PricewaterhouseCoopers LLP (PwC), First, there is a federal around climate change mitigation summarizes responses to the 2009 standard released by and adaptation. In parallel, CDP data Carbon Disclosure Project Information Request from Consumer Discretionary the US Environmental is increasingly being applied as a catalyst for changing business behavior companies in the FTSE Global Equity Protection Agency. and is becoming more integrated into Index Series (Global 500), Standard Beneath that, there are mainstream financial analysis. & Poor’s 500 Index (S&P 500) and the FTSE 350 Index (FTSE 350). National Highway Traffic This year, CDP has responded to Safety Administration feedback from its signatories and other Responses to CDP 2009 are grouped standards and a stakeholders for more industry- according to the Global Industry Classification Standard (GICS). California Air Resources Board standard. The last one is the most stringent one for BMW. Because Summary table of the economic crisis, especially for the Big GICS sector Consumer Discretionary Three in Detroit, and the new US president, it is Response rate1 66% (103 of 156) not very clear how strict Global 500 76% (28 of 37) S&P 500 59% (47 of 80) the new laws will be. FTSE 350 72% (44 of 61) BMW Bayerische Overall sector rank (1-10)2 10th Motoren Werke Highest disclosure score 87 Lowest disclosure score 0 Average disclosure score 50 All Carbon Disclosure Overall emissions disclosure3 Project reports Scope 1 emissions 81% (68 million Mt/CO2-e) are available at Scope 2 emissions4 82% (139 million Mt/CO2-e) Scope 3 emissions 52% (425 million Mt/CO2-e) www.cdproject.net Average emissions intensity5 99 (Mt CO2-e/US$ million revenue) 1 The overall response rate will not equal the sum of total 3 Percentage of respondents who reported emissions and respondents for each index (Global 500, S&P 500 and total disclosed emissions for the sector. FTSE 350) because respondents can be listed on more 4 Gross Scope 2 emissions represent the sum of all grid than one index. averages, not adjusted for contractual arrangements. 2 The rank order of the sector among ten sectors analyzed. 5 Disclosed Scopes 1 and 2 grid average emissions totals The rank is determined by the average disclosure score divided by annual US$ million revenues. Revenues based for each sector. on data retrieved from Bloomberg on June 18, 2009. 2 CDP Consumer Discretionary sector report 2009 Fig. A: Year-on-year disclosure rates, as a proportion of total Consumer Carbon disclosure Discretionary companies (Global 500, S&P 500 and FTSE 350) trends in the Consumer Discretionary sector CDP 2009 Diversity is a hallmark of the Consumer Total population 156 (100%) Discretionary sector. Respondents represent businesses ranging from advertising agencies to big-box retailers and cruise lines, to windshield wiper manufacturers. Consequently, industry Responses 103 (66%) views on energy efficiency and climate Report on GHG emissions in change issues vary according to the Disclose GHG emissions 85 (54%) annual corporate reporting 86 (55%) unique idiosyncrasies, demands and expectations of each industry. Publicly available 70 (45%) Disclose emissions reduction targets 55 (35%) A look at the types of respondents that make up the Consumer Discretionary Verify emissions 44 (28%) 43 (28%) Disclose forecasts sector reveals the sector’s variety. The five Consumer Discretionary industries are automobiles and components (auto and motorcycle manufacturers, auto parts); consumer durables and apparel (household items including electronics, appliances, home furnishings, clothing and accessories, luxury items); consumer services (restaurants and leisure, diversified services); media (advertising, TV, movies and entertainment, publishing); and retailing (distributors, Internet and catalog retail, CDP 2008 multiline and specialty retailers). Total population 178 (100%) Many companies within the Consumer Discretionary sector operate or rely on extensive retail networks or own large real estate portfolios and therefore recognize the physical risks related to Responses 107 (60%) severe-weather events. Many also operate within razor-thin margins that Report on GHG emissions in make minor price increases in utilities or annual corporate reporting 78 (44%) raw material costs significant concerns. Disclose GHG emissions 73 (41%) Publicly available 66 (37%) Although the Consumer Discretionary Verify emissions 48 (27%) sector as a whole had the lowest average carbon disclosure score Disclose emissions reduction targets 45 (25%) among all ten sectors reporting and the third-lowest response rate, a closer look at the individual company scores that make up the sector reveals a more complex picture. Within the group, Disclose forecasts 10 (6%) respondents that manufacture automobiles and consumer durables along with Internet and catalog retailers have higher disclosure scores than their sector peer group does. Across geographies, a higher percentage of Consumer Discretionary companies responded6 to the CDP in 2009, up six percentage points from 2008. The proportion of Consumer Discretionary companies responding at 6 The response rate represents all responding companies for this sector. Statistics in the remainder of this report are each disclosure level also increased in based on the number of analyzed responses only and do not represent companies that responded after the deadline 2009 for all key areas of disclosure (see for analysis. Figure A). 3 Carbon disclosure trends in the Consumer Discretionary sector Few Consumer Discretionary help identify and track opportunities The US Congress respondents reported that the poor for increased energy efficiency, or economy was causing them to delay they may form office programs to help and several states carbon reduction plans. In fact, the shift employee behaviors to effectively are currently pursuing anticipated increase in utility costs reduce overall carbon emissions. climate change seemed to justify spending more now Externally, some respondents legislation. NIKE is to reduce future energy needs. Also, are working with nongovernmental some respondents noted that they organizations to actively monitor working at both the committed to carbon reduction plans and support relevant legislation. state and federal levels in 2006 or 2007 and had already made to secure their passage, the majority of their capital expenditures Consumer Discretionary leaders for before the recession began. carbon disclosure are listed below preferably in advance in the order of their disclosure score. of the COP15 United A number of respondents are addressing While the remaining Consumer Nations Climate climate change issues proactively from Discretionary respondents ranked both internal and external perspectives. lower than these companies, they Change Conference Internally, those respondents may are nonetheless commended for in Copenhagen in 2009. calculate the carbon footprint of their their disclosures and participation. NIKE also works with operations and their supply chains to bodies to monitor and support legislation. In 2008, NIKE worked with CERES to create a coalition of businesses called Business for Innovative 7 Climate & Energy Policy Fig. B. Disclosure score leaders for the sector (BICEP), which presses Global 500 leaders for the passage of comprehensive climate Company name Disclosure score change and energy Carnival 87 legislation in the BMW Bayerische Motoren Werke 79 Toyota Motor 77 United States Reed Elsevier 76 News Corporation 75 NIKE S&P 500 leaders Company name Disclosure score Carnival 87 News Corporation 75 Stanley Works 75 Limited Brands 74 Darden Restaurants 69 Johnson Controls 69 FTSE 350 leaders Company name Disclosure score Carnival 87 Reed Elsevier 76 N Brown Group 75 7 The companies in this list are leaders in their sector for each of the indexes. However, they may not appear Wetherspoon 75 in the CDLI for the index overall when all ten sectors Berkeley Group Holdings 72 are considered. 4 CDP Consumer Discretionary sector report 2009 One-third of Consumer Discretionary Fig. C: Largest non-respondents companies (34%, or 53 companies) chose not to participate. The largest Largest non-respondents by market capitalization8 non-respondents are listed in Fig. C based on their market capitalization. Company name Index When compared with a cross section Comcast Global 500, S&P 500 of global leaders for carbon disclosure,