The adaptation tipping point: are UK businesses climate-proof?

“Most people who have taken climate risks into account have only considered half the picture…”

acclimatise John Firth +44 1636 812868 [email protected]

UK Climate Impacts Programme Chris West +44 1865 285717 [email protected]

Carbon Disclosure Project (CDP) Paul Dickinson +44 7958 772864 [email protected] Acclimatise and UKCIP gratefully acknowledge the advice and contributions of Malcolm Dowden (Charles Russell, LLP). We would also like to thank Yara Chakhtoura, who undertook the analysis of FTSE 350 responses to the CDP4 request for information. Design by Stephanie Ferguson, UKCIP.

This report should be referenced as: Firth, J, and Colley, M (2006) The Adaptation Tipping Point: Are UK Businesses Climate Proof? Acclimatise and UKCIP, Oxford. ISBN 0-9544830-9-X Further copies of this report can be downloaded from www.acclimatise.uk.com and www.ukcip.org.uk Hard copies of the report are available from: UK Climate Impacts Programme Oxford University Centre for the Environment Dyson Perrins Building South Parks Road Oxford OX1 3QY Tel: +44 (0)1865 285717 Fax: +44 (0)1865 285710 Email: [email protected]

“Most people who have taken climate risks into account have only considered half the picture.”

Chris West, Director, UKCIP

Foreword

Foreword The adaptation ‘tipping-point’: are UK businesses climate-proof?

Our climate is changing, and we are faced with many years of continuing unavoidable change. Even if we make a significant reduction in greenhouse gas emissions tomorrow, the lag in the climate system means that we will need to cope with a changing climate for the next 40 plus years, due to emissions we have already put into the atmosphere. Businesses and the financial markets need to grasp the reality we face – that we have to both reduce our emissions, and adapt to inevitable climate change. There is no choice between mitigation and adaptation – we have to pursue complementary actions on both. The report explores why adaptation is and will become an increasingly important issue for businesses, investors and the financial markets, in addition to the already urgent mitigation agenda. This report provides a concise explanation of the scale of the adaptation agenda and the implications for business. It establishes a milestone against which future actions will be measured by investors, employees, customers and communities. All CEOs, Finance Directors, non-Executive Directors and all those engaged in providing business, legal and financial advice will greatly benefit by reading this report and reflecting on the consequences for their companies and clients if they fail to take action – now.

Chris West John Firth Director, Managing Director, UK Climate Impacts Programme acclimatise

1 Executive summary

Executive summary

Our climate is changing. The implications for businesses, and to • This contrasts markedly with other their investors, customers and workforce, companies in the same sectors We are already faced with many years of through failure to assess and manage appearing not to recognise that they face continuing unavoidable change. climate risks are significant. any climate risks. Even if we make a significant reduction in • Value, return and growth will reach a • Although the potential direct impacts of greenhouse gas emissions tomorrow, we tipping-point when an increasing extreme events are recognised, there is will need to cope with a changing climate awareness and understanding of the less appreciation of the impacts, both for the next 40 plus years, due to realities of climate change challenges direct and indirect, arising from changes emissions we have already put into the previous expectations. in longer-term average conditions and atmosphere. The future climate is already seasonal variation in temperature, set over this time period and the • Decisions taken by directors and precipitation etc. consequences can not be ignored. professional advisers may be open to legal challenge. In addition to analysing the adaptation Businesses and the financial markets need results from the CDP4 survey, this report to grasp the reality we face – that we have • The tipping points on value, return and also provides a primer for directors, to both reduce our emissions and adapt to growth are likely to trigger credit rating investors, fund managers and their inevitable climate change. There is no revisions and increases in the costs of professional advisers on the adaptation choice between mitigation and adaptation capital. agenda and the need for action. – we have to pursue complementary • Customer expectations, preferences and actions on both – now. Businesses can respond to build resilience needs will change as the impacts of and climate-proof their interests. climate change become apparent. Uncertainty about the future is not a • Governments are likely to resort to reason for inaction. prescriptive regulation if businesses do There is sufficient information to enable the not respond with adaptive action. impacts of a changing climate over the This report has analysed the Carbon next 40 years to be embedded in decision- Disclosure Project responses of making at strategic and project levels. businesses in the UK FTSE 350 to explore Adaptive management is feasible. their understanding of the need for Changing markets, customer needs and adaptation. These are the key findings. investor expectations will present • Despite an increasing realisation of significant opportunities for those climate risks, this is not reflected in the companies that take action to climate- risk management strategies of the proof their businesses. majority of the FTSE 350. Only 10% of Taking adaptive action early may be cost- the FTSE 100 reported that they effective when compared with the costs considered the impacts of climate associated with remedial action at a later change pose a high risk to their business date. When analysing potential action, operations. companies should consider their fiduciary • Adaptation is not as well understood as responsibilities. mitigation. Businesses should review their climate risk • The number of good responses, with a management strategies and check that rich description of climate risks, is low. they are responding to both the mitigation and the adaptation agendas. Action is • Within some sectors, there are a small required on both – now. number of companies that have demonstrated an understanding of climate risks. These companies are setting the pace and will become the benchmarks.

2 Table of contents

Table of contents

Introduction 4 Sector summaries 11 Appendices 25 Aerospace and defence 12 Appendix 1: References 25 Why adaptation matters 5 to business Automobiles and machinery 12 Appendix 2: About the Carbon 26 Disclosure Project Banks 13 A changing climate — what is the 6 Appendix 3: CDP4 questionnaire27 science telling us? Chemicals 13 Appendix 4: CDP4 signatories 28 Construction and building 14 Significant business risks 7 materials Appendix 5: Companies’ 30 Value, return and growth at the 7 responses to the CDP4 Food-related industry 14 tipping point questionnaire General retailers 15 Litigation 8 Hotel and leisure 16 Brand and reputation 9 Insurance 16 Credit rating 10 Media and entertainment 17 Growing government action on 10 adaptation Mining, steel and other materials 17 Oil, gas and electricity 18 Pharmaceuticals and 19 biotechnology Real estate 19 Software and computer 20 services Specialty and other finance 20 Support services 21 Telecommunications services 21 Tobacco and beverages 22 Transport 22 Utilities 23

What can business do? 24

3 Introduction

Introduction

"We are not talking any more about This report focuses on the climate risks The report explores why adaptation is and what climate models say might to business from inevitable climate will become an increasingly important happen in the future. We are change. issue for businesses, investors and the financial markets. Exposure areas are The CDP4 questionnaire included a very experiencing dangerous human described and the key risks including specific question (number 3) which, disruption of the global climate and litigation, brand and reputation, credit together with responses to other parts of rating, regulation and financial we are going to experience more." the questionnaire, was designed to assess performance are discussed. Summaries the understanding of the UK’s major John Holdren, President, American Association are provided for each of the main business companies of the risks they face from a for the Advancement of Science sectors. changing climate – rising temperatures, rising sea levels, changing rainfall patterns, Finally, the report considers the actions and extreme events – and the adaptation that can be taken to embed climate risk measures currently being used to management into decision-making, to safeguard assets and operations. build resilience and climate-proof businesses. These actions will allow risks The question asks: to be assessed and managed, and “How are your operations affected by significant market opportunities to be extreme weather events, changes in identified. weather patterns, rising temperatures, sea level rise and other related phenomena both now and in the future? What actions are you taking to adapt to these risks, and what are the associated financial implications?” The analysis in this report sits within the context of growing engagement in recent years by both businesses and their advisers in developing an understanding of climate change, and of calls from investors for greater disclosure in forward-looking risk management statements.

4 Why adaptation matters to business

Why adaptation matters to business

We face two climate change challenges, Uncertainty is no excuse for inaction. not just one. Uncertainty over climate change is often Any conceivable emissions reductions cited as justification for delay or inaction. policies, even if successful, cannot have a Yet there is greater consensus in the perceptible impact on the climate for some scientific community that man-made decades – some change is already ‘locked climate change is underway than on in’ by historic emissions and by inertia in almost any other issue. We have more the climate system. Global temperatures knowledge and understanding about how will continue to increase for the next 30-40 our climate is changing than we have years and sea level will rise for many about demographic change, interest rate centuries, and we must develop strategies movements, currency fluctuations, or to address these climatic changes. market variations, and yet every day businesses are prepared to take decisions This is not a reason to be complacent which are affected by these uncertain about emissions reductions. Adaptation drivers. While there are still uncertainties and mitigation are two sides of the same about the precise impacts of these climatic coin: we must mitigate emissions in order changes at individual locations, there is to limit future climate change, and we must sufficient information now to enable adapt in order to deliver a sustainable businesses to incorporate climate risks economy in the face of current and future into decision-making. Uncertainties can be climate change. These are not alternative better understood by using climate change strategies. scenarios and by identifying thresholds Climate change is happening – the and sensitivities. process is already underway. It is having The sophistication of climate modelling an effect on business now. There is no improves year on year. In the UK, the quick fix as these effects will stay with us UKCIP02 climate change scenarios for decades to come. Business has paid (produced by the Hadley Centre for increasing attention to the mitigation Climate Prediction and Research and the agenda, but has not yet grasped the Tyndall Centre for Climate Change significant emerging risks posed directly Research) currently provide the best by climate change and variability. Investors information on how the UK’s climate is and businesses alike must recognise that expected to change over coming decades. the past climate is no longer a sound basis The next UKCIP climate change upon which to plan for the future. information package, due to be released in 2008, will incorporate probabilistic climate information, and provide a useful tool for risk-based decision-making. A business will only flourish if its leaders are adept at weighing risks and making robust decisions in the face of uncertainty. The successful business of the future is taking climate risks into account today, and is developing adaptive strategies and actions to manage the uncertainties.

5 A changing climate — what is the science telling us?

A changing climate – what is the science telling us?

The rising concentration of carbon The result is climate change. Global In the absence of any human modification average temperature has risen by about of climate, temperatures such as those dioxide (CO2) and other greenhouse gases (GHGs) in the atmosphere is 0.6°C since the beginning of the twentieth seen in Europe in 2003 are estimated to be century, with about 0.4°C of this warming a 1-in-1,000 year event. A simulation using changing its composition and occurring since the 1970s. The the Hadley Centre’s global climate model preventing heat from escaping the Intergovernmental Panel on Climate (Figure 1, red line) of summer warming until earth’s surface. Man-made Change (IPCC) has attributed most of the 2100 over southern Europe shows that by emissions have already increased observed warming of the last 50 years to the 2040s a 2003-type summer is human activities. predicted to be about average, and by the CO2 concentrations by one third 2060s it would typically be the coolest The summer of 2003 was an unusually hot compared to the start of the summer of the decade. one over large parts of Europe, with industrial era and, by August temperatures 3°C higher than the Under continuing climate change, in the mid-century, concentrations are long-term average. This caused major UK we can expect: expected to be twice business disruptions and over 20,000 • increasing climatic variability, pre-industrial levels. excess deaths directly attributable to the high temperatures. In the UK there were an • rising temperatures, estimated 2,000 excess deaths. The Met • increasing risk of heat waves, Office estimates with high probability that the risk of such anomalously high • changing patterns of rainfall, with wetter European temperatures has already winters and drier summers, doubled due to the effects of GHG • increasing risk of drought and flood, emissions. • rising sea level, • increased frequency and severity of sea 8 storm surges, Observations • possible increased storm intensity and ) Medium−High Emissions frequency. C 6 o ( There is also mounting evidence that e

g tropical cyclones (known as hurricanes in n

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intense in a warmer world. The devastating e

r impacts of Hurricanes Katrina and Rita in u t 2005 demonstrate the kinds of risks that a r

e could become more common. 2 p

m The Gulf Stream will continue to exert a e

T very important influence on UK climate. Although its strength may weaken in 0 future, perhaps by as much as 25% by the end of the century, it is unlikely that this would lead to a cooling of UK climate since −2 warming from GHGs will more than offset 1900 1950 2000 2050 2100 any cooling from a weakening of the Gulf Stream. Year

Figure 1: European 2003 summer temperatures could be normal by the 2040s; cool by 2060s [Source: Hadley Centre, 2005]

6 Significant business risks

Significant business risks

The impacts of increasing climate • corporate governance interest in “The direct risks arising from climate variability and a changing climate for director-level risk management is change – rising sea levels, more business will be far reaching. growing fast, extreme weather events, alterations Our current economic structures and • society is becomingly increasingly to rainfall patterns – will affect social and cultural support systems have risk-averse. operational costs for many developed over many years partly in It is clear that few businesses have yet to response to relatively stable climatic businesses as they adapt sites and recognise the new and unfamiliar threats conditions. The stability to which we have processes to mitigate them.” arising from a changing climate. Fewer still become accustomed has allowed a have begun to assess the risks and Tom Burke, Visiting professor at Imperial and measure of predictability based on the opportunities and to develop risk University Colleges London, analysis of historic climate data. In a management processes and actions to Environmental Policy Advisor to Rio Tinto changing world these systems and meet the challenges. Impacts will be felt by structures are increasingly exposed to every business irrespective of their size, extreme weather conditions and changing "Integrating… climate change into location, markets, products and services, long term average climate conditions. and will affect: investment analysis is simply Decisions based on a historic analysis of common sense… climate data are no longer future-proof. • natural resources and raw materials, The carbon intensity of profits is an Awareness of climate risks is growing • supply chains and logistics, approach that needs to be across all areas of government, business • fixed asset design and construction, adopted… Climate change is a and society. There are a number of driving forces that are increasing the visibility of • asset operation, performance and problem that’s not going to be climate risks and the market opportunities: maintenance, solved by politicians… Politicians • the climate is changing, • processes, have an important role to play; but the underlying reality is going to • the frequency and intensity of severe • asset values, weather events is increasing, have its effects on the market, • markets, regardless of public opinion and • there is increased interest in scientific • products and services, government action.” information about the climate and a consensus within the scientific • workforces. Al Gore community on climate change, In this report we discuss some of the risks • there is also increasing interest from the companies will face to, for example, legal profession and recent cases of financial performance, litigation, brand and litigation on climate change in the US, reputation, credit rating and regulation. Those that fail to respond will be unable to • governments and others in the public take advantage of the opportunities. sector are beginning to create guidance, legislation and regulation to address Value, return and growth at the changing climate risks, tipping point • public awareness of climate change is The perception and realisation by the very high and is linked to brand value, financial markets and investors of the risks • the insurance and investment to value, growth and return are emerging. communities have awakened to the The insurance industry in particular, is risks, and are highlighting their concerns, already acutely aware of the potential impacts and has had first hand experience • there is increasing importance attached of the costs arising from events driven by to business continuity, climate change.

7 s s t s c e a

Significant business risks c p c u m i s

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sea level rises would affect Sky (in f

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British Sky Broadcasting, FTSE 100 s a e

“We expect climate change not only M to produce extreme capital Reduced damaging events but also to value, return increase uncertainty around and growth corporate business plans and 2006 Tipping point Significant impacts potentially reduce asset values.”

Lloyd’s of London Figure 2: Value, return and growth at the tipping point

“Sudden financial shocks could still pose a threat to financial stability. Such shocks can take a variety of Hurricane Katrina has been widely Directors are being challenged by forms, such as natural disasters recognised as a tipping point for the investors to demonstrate their corporate (possibly driven by climate insurance industry in the USA. In the UK governance credentials. The spotlight on change)…” and Europe insurers have been at the financial management and reporting is forefront of business sector activity in now also focusing on wider strategic risk Financial Services Authority analysing the potential impacts. The management issues. Over the next few Association of British Insurers assessed years we will see a greater awareness and “While some companies have the financial risks of climate change and understanding of the impacts of a warned of the risk of increasing tropical changing climate. The importance of this begun to treat climate change as a storm activity and its impact on insurance for businesses is that their adaptation fundamental strategic issue, many and economies prior to Hurricanes Katrina strategies and actions need to be in place, more are not disclosing their climate and Rita. Lloyd’s this year warned of the that is businesses must become climate- risks or plans to address it, creating challenges the industry and its clients proofed, before the tipping point and well uncertainty for investors and faced and the threats to long-term before the direct effects of a changing solvency. Aviva, Allianz and Axa have been climate are felt. difficulty assessing the true longer- active in understanding the risks to their term value of our portfolios.” businesses; Swiss Re and Munich Re have Litigation been at the forefront of raising the profile of Institutional investors at the Investor Summit, The interest in climate change from the climate change as a business risk rather May 2005 legal profession has for the most part been than an environmental issue. restricted to the emerging markets in “Climate change could be the next Figure 2 shows that the costs, risks and carbon trading and emissions. There has impacts of climate change will increase been limited attention to the issue of legal battlefield: compensation over time. There will be a point (the tipping adaptation. As the financial impacts of claims for man-made environmental point) driven by either a financial shock (for climate change and adaptation begin to be damages would make the tobacco example, an extreme event) or by an recognised we are likely to see the use of sector payouts look small.” increasing awareness and understanding litigation as a means to recover costs. The of the reality of climate change, when legal costs and reputational damage Financial Times, 14 July 2003 these costs, risks and impacts challenge associated with defending climate change expectations for value, return and growth. actions could be enormous. At this point the financial markets, A recent report by Freshfields Bruckhaus analysts, credit rating agencies, investors, Deringer has challenged the traditional fund managers etc., are likely to review the narrow interpretation of fiduciary duty. The risks and their expectations of value, return report identifies the impact of climate and growth figures. Although for some change as a risk which may affect any sectors there are perhaps 20+ years before investment; failure to assess the risks may the impacts of climate change have a result in claims of neglect of fiduciary duty significant effect, the tipping-point will by beneficiaries. occur earlier, as investors review their portfolios and assess their investment liabilities.

8 Significant business risks

Lawyers are beginning to acknowledge Figure 3 identifies the effect of knowledge “The effects of climate change can that there is now sufficient information points on decision-making and litigation now be regarded as being available on climate change for companies risks. All decisions made and advice given reasonably foreseeable at every to take it into account in both strategic and since the dates of the knowledge points project level decision-making. All have an accrued litigation liability. The stage – it must be incumbent upon decisions taken by directors and accrued litigation liability will continue to professional advisors to ensure that professional advisers that do not take increase through continuing failures to appropriate steps have been climate change into account may be open build climate change into decision-making. taken.” to legal challenge. In the future the courts Reasonable forseeability of climate change will examine claims and may decide that it Malcolm Dowden, Charles Russell LLP and the risk of litigation should be on the was reasonable, at the time the decision radar screens of all companies in their was made or advice given, to have corporate risk assessment procedures. “It is prudent to plan for a foreseen the impacts of climate change, based on the information available in the substantial change in consumer Brand and reputation public domain. behaviour on climate change.” Consumer preferences and needs will The issue for the courts will be deciding if The Carbon Trust change as the impacts of climate change there were any ‘knowledge points’ from become apparent. To take a simple which it may have been reasonable to example, southern European holiday consider that the impacts of a changing destinations may become less attractive in climate should have been known. Potential summer, due to increasingly hot knowledge points may include documents temperatures. produced by governments, regulatory agencies, professional institutions, sector Those sectors and individual businesses organisations and advisory bodies setting that do not respond will find their out the impacts of climate change and reputations suffer significant damage. actions that may be necessary, relevant or Correspondingly those that recognise the advised. opportunities will become sector leaders. These knowledge points already exist. Research commissioned by the Carbon There is generic information, for instance, Trust demonstrates that there are high reports produced by the Intergovernmental levels of public awareness of climate Panel on Climate Change (IPCC) and also change in the UK, and that it may not be sector-specific information . Some long until it becomes a mainstream examples of these knowledge points are consumer issue. given in the sector summaries in later sections of this report.

Figurs e 3: Increasing liabilities t c a p m i

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g Increasing impacts, risk and cost n a h c

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i Assessment Report l C

Future 1990 Generic knowledge point Now

Accrued liabilities for decisions Accumulating liabilities which are not climate-proof

9 Significant business risks

“The insurance industry has to These are the conclusions from the Other sectors will be similarly affected with respond to customer and research. changes to credit ratings and higher costs of capital as they reach their own tipping shareholder needs. Both will • The public today are aware of the points. increasingly look to the industry to prospect of climate change. Two thirds of Britons say they know ‘a great deal’ or provide effective responses to the Growing government action on ‘a fair amount’ about it. threats caused by climate change.” adaptation • In banking, the mostly likely exposure to The response by governments in Europe to Evan Mills, Staff Scientist, climate risks arises from a bank’s inevitable climate change has so far been Lawrence Berkeley National Lab investment and lending exposure. A patchy. In the UK we have seen a bank’s position on decisions such as tightening of building regulations and mortgage conditions on properties “Increased losses could raise the planning policy controlling the use of land exposed to increasing flood risk may cost of capital and increase the and construction standards in response to cause a negative response from concerns over increasing flood risk and volatility of insurance markets.” consumers. subsidence risk due to climate change. ABI 2005 • In some sectors, the lead time for action The EU is currently considering a floods could be several years, leaving directive and an adaptation strategy with unprepared companies at risk. calls for greater controls on spatial planning. • There is an opportunity for differentiation against competitors. Forward-looking Government action on adaptation is not companies need to assess the risks, to confined to flooding. A new Planning avoid falling behind on such a Policy Statement, PPS26, focused mainstream consumer issue. specifically on climate change, will be published towards the end of 2006. All This research is confirmed by further work sectors could be affected by changes in recently commissioned by BSkyB, which government policy and regulations. There found that 81% of UK consumers are are already, for example, calls for the "strongly concerned" by climate change or introduction of ‘maximum workplace “recognise it as important”, demonstrating temperatures’ for factories, offices, a significant latent demand. schools, hospitals and public buildings. If The insurance sector is showing such standards were introduced, there leadership in this area recognising that could be significant financial impacts consumer preferences and needs will be arising from the increased capital and different. A recent report commissioned by maintenance costs necessary to adapt CERES explores the opportunities for new buildings. products and services. It is inevitable that legislation and regulations will change, as will supporting Credit rating guidance, codes of practice and standards Credit ratings and the cost of capital will in response to the impacts of climate change in response to the actual and the change. This will impose future liabilities perceived impacts of climate change. The which may require remedial action. tipping points on value, return and growth Climate-proofing strategies and projects are likely to trigger rating revisions and now is a sensible adaptation action. The increases in the costs of capital. We are longer the delay by business in responding already seeing these movements in the to inevitable climate change, the more insurance industry. likely we are to see governments respond and act more aggressively with The increasing frequency and intensity of prescriptive regulation on adaptation. climate-related catastrophes has exposed a number of insurers and reinsurers who had underestimated their catastrophe exposures. Credit rating agencies around the world have been reassessing the exposures of the industry and adjusting credit ratings accordingly. Increasing storm activity and intensity and the impact of more frequent droughts, heatwaves, fires, subsidence and heave, together with the effect on business continuity and increasing director and officer liabilities will increase the pressure on the insurance industry.

10 Sector summaries

Sector summaries

Vulnerability to climate change varies exposure to climate risks, 32% expressed 5% 2% Answered questionnaire significantly from sector to sector, and a medium level of concern, 46% 10% Provided information from company to company. This variation expressed a small amount of concern, and No response depends on the individual business or 9% were not concerned at all. Declined to participate sector’s ability to manage the physical, Figure 5 shows the level of concern over litigation, financial, reputational and market climate risks expressed by CDP4 risks of future climate change. respondents, by sector and as a total. 83% The following analysis is not intended as a The highest proportion of ‘highly FTSE 100 comprehensive examination of the climate concerned’ respondents were found in the impacts on individual business sectors. It following sectors: Utilities (50%), Banks 11% is based on the responses received from 36% (43%), Chemicals (33%), and Mining, steel the CDP4 information request, and other metals (29%). supplemented by our comments. It highlights the likely risks and The highest proportion of respondents demonstrates the potential scale of the who expressed little or no concern were impacts if businesses fail to take account drawn from the following sectors: Software of climate change as a business risk. A and computer services (100%), Media and 38% 15% complementary report has been prepared entertainment (91%), Real estate (89%), FTSE 250 for the Carbon Disclosure Project by Pharmaceuticals and biotechnology Trucost, which analyses the responses in (80%), Automobiles and machinery (80%), the context of greenhouse gas emissions. Leisure and hotels (75%), Aerospace and Figure 4: Response rates to the CDP4 information request from the FTSE 100 (top) and FTSE 250 defence (67%), Chemicals (67%), and CDP4 questionnaire response rates for the (bottom). General retailers (67%). FTSE 100 differ considerably from the response rates of the smaller companies A modified version of the Financial Times that make up the FTSE 250, as shown in sector classification system was used for Figure 4. Whereas 83% of FTSE 100 this analysis. Because of the large number companies answered the questionnaire, of sectors and the low response rate in only 36% of FTSE 250 did so. The some sectors, we merged some sector proportion of companies that provided categories on the basis of similar climate information in place of a questionnaire risks. As an example, we combined the response was similar: 10% for the FTSE ‘Mining’ sector with the ‘Steel and other 100 and 15% for the FTSE 250. Only 7% metals’ sector to create a new ‘Mining, of the FTSE 100 companies declined to steel and other metals’ category. participate or did not provide a response. In the following sector summaries we By contrast, half of the FTSE 250 provide a very brief outline of FTSE 350 companies (49%) declined to participate in respondents’ perception of the climate the CDP4 process or provided no risks faced by their company, response. A list of the companies in the accompanied by quotes drawn from FTSE 100 and FTSE 250 is provided in company responses. We have included Appendix 5. some quotes from the FT 500 responses, Responses to Q3 (and, to some extent, though these are not included in the Q1) of the CDP4 questionnaire described analysis. This is followed by our expert the level of understanding and concern analysis of each sector’s exposure to about the risks posed to companies by the climate risks, and case studies of impacts impacts of climate change. Our analysis that are already being felt. shows that, of the 165 UK companies that responded to the CDP4 information request, 13% are highly concerned about

11 s t

n s r e s o t e d t c c n i e n e e v s t r l o e l y a m t s A r n p s i e e r Sector summaries r e a s e in t s u l r t r h a e s e u i c e t r e e p il e n c l a R m f s a e n t m e & o e e & o s f c 100% ic r s &

e e l l a None t v i & r c r d a e s e i t r e d o v e o l e y r & e i e r Small g t s i p 80% s e n H b a y c n e M a r i s e o t r n c w Medium

t o s t a t i G t s r t a m f e c r

n p o s u T o a o l g e s t High 60% a d l p c S e i u a r n e o y i i p n r r e , A c g u e e e v s u Level of concern r o t d c l S A 40% a e e a m over climate e e n o b t g

c a n m la m s change risks P n & & o l n h e a i g r l a f c i c ls t r n o 20% r e i le a e u t c d O s e d e c s o l c o k i m h i i T n t a o s n r I b u m o b F e a e b 0% i e & o t B h & T i h t & il s y l t C o n lt a U o & a ic i l i t t e c u c e e e u t r p c t s S a s , n g m o n r i a C in h P M Figure 5: Level of concern over the risks posed to companies by the impacts of climate change.

“At the moment we do not Aerospace and defence the availability, or disruptions to the supply, of either resource will affect sector anticipate major threats to our key Despite the significant potential climate performance. facilities due to climate change.” risks in this sector, most aerospace and defence respondents (67%) show little or • This industry is also reliant on production Rolls-Royce, FTSE 100 no concern about the impacts of climate line and factory workers, whose comfort change on their business. and productivity can be compromised by warmer working conditions. “Every individual is exposed to the • Like all high technology and engineering effects of extreme climatic events industries, the aerospace and defence Automobiles and machinery and changes.” sector is vulnerable to any disruption in supply chain or manufacturing CDP respondents in this sector do not yet BMW, FT 500 processes. Both incremental changes appear to have experienced losses or and extremes of climate can interrupt increased costs due to climate risks. These “The potential effects of climate engineering operations. Just-in-time industries are most vulnerable where change include a combination of manufacturing and delivery systems can businesses are dependent on climate- exacerbate the vulnerability of supply sensitive resources, or where their supply physical and material damage as chains and operations. and operations are affected through well as operational losses. Other consumer behaviour or transport disruption. • Climate variability and change can also possibilities are image risk, third- Of those who provided a response to the have knock-on impacts on quality, CDP questionnaire, 80% expressed little or party liability and, in certain cases, timeliness, precision and performance in no concern about climate risks. market risk. To date, there have manufacturing. • Climate variability and change can cause been no tangible or visible effects in • The climate risks to global security are significant supply chain interruptions to our operations.” potentially enormous. Climate change will intensive production schedules, with likely trigger severe disruptions with Renault, FT 500 subsequent cost implications. Transport significant consequences for local, systems, on which the global supply chain regional, and global security. These depends, are also vulnerable to climate events could exacerbate existing impacts. The high value of finished stock tensions, prompting diplomatic and trade in transport or port storage is vulnerable disputes. In the worst case, extreme unless the ports and shipping risks are events have the potential to destabilise managed. the global economy and geopolitical balance, and incite conflict. The market • The complexity of this sector’s production repercussions for the aerospace and network makes it vulnerable to defence industries are considerable. interruption. The automobile and machinery sector should review the • This sector is heavily reliant on both water climate risks to supply chains and and energy. Climate-related reductions in logistics, particularly where extreme

12 Sector summaries

events have the potential to cause opportunities associated with climate “Barclays considers adaptation to significant disruption. change are actively considered within be an important issue which society investment processes. • Higher indoor temperatures, when must start to address in order to combined with the heat of process • The office-based banking industry also face the future impacts of climate environments, will result in more faces business risks from decreased change.” uncomfortable working conditions. This employee productivity in buildings that has the potential to reduce productivity are not designed to cope with higher Barclays, FTSE 100 and increase workforce health risks, temperatures. respiratory problems and absenteeism. • Much of the discussion on climate risks “The impact of climate change on Any adaptation strategy will need to and vulnerability for the insurance sector weigh up these productivity costs the costs of extreme weather is relevant to the wider financial service against, for example, costs of improving events is of major concern to sector because of the inter-linking of building ventilation. insurance and capital markets. HBOS, particularly as we are the • Process environments will become hotter UK’s leading mortgage lender and • A proactive stance on dealing with climate with increased need for cooling. Any home insurer.” change could enhance the reputation of additional cooling must be low carbon, in individual banks and the financial sector. HBOS, FTSE 100 line with climate change mitigation objectives. Increased humidity will Chemicals increase drying time for painted products. “Climate change, climate policy and Some product components and testing One third of CDP4 respondents in this adaptation processes create risks regimes may need to be adapted to cope sector are highly concerned about their as well as opportunities for Bayer.” with climate change. exposure to climate risks. Bayer, FT 500 • Regulatory risks include the possible • Rising ambient air temperatures, introduction of maximum working variations in water quality, and the temperatures in manufacturing and availability of cooling water will all have an process environments. effect on chemical processes. These must be considered thoroughly, as they will Banks have knock-on impacts across all activities in this sector. Respondents in the banks sector show a high level of awareness of the risks they • Low river flows during hot, dry summers face from the impacts climate change. Over can lead to restrictions on water 85% of companies who responded to the abstractions, with consequences for CDP4 questionnaire in this sector cooling processes when the need for expressed a high or medium level of cooling is highest. Low flows also mean concern about the vulnerability and restrictions on the volume of high exposure. temperature water that companies are allowed to discharge to rivers and • The banking sector faces a potentially streams, with impacts on production. high level of risk if investments are made Finally, low river flows are less able to in assets that are vulnerable to climate dilute pollutants, leading to tightened change. Climate risk management restrictions on effluent discharge. strategies should incorporate a risk screening for assets and investments. • Changes to chemical processes, particularly under extremes of high • Fund managers face potential risks and temperature, will affect process opportunities associated with climate operations and corrosion rates. change. These include risks to equities, debt (both corporate and governmental), • Volatile chemical storage procedures will and real estate. Impacts will vary between need to take account of rising sectors, companies, and the countries in temperatures and the impacts on tank which particular assets are based. pressure. The stability and performance of some chemical formulations are • Corporate investment decisions made temperature dependent. now should take into account the potential physical impacts of a changing • Vulnerability of supply chains may lead to climate. Where possible, adaptation an increased disruption to supply. This strategies should ensure that they are may mean that providing additional appropriate to future climate risks. materials storage capacity may be desirable to provide greater resilience. • As climate change will affect shareholder value now and in the future, fund • There are considerable regulatory risks to managers should be taking appropriate consider, as handling, transmission and steps to ensure that the risks and storage safety standards may be compromised.

13 Sector summaries

“No direct physical risks today or Construction and building materials • The vulnerability of housing and commercial developments to floods is expected for the future.” As buildings generally have an expected partly a function of design and the lifetime of between 20 and 100 years, it is Saint-Gobain, FT 500 materials used. Modern housing is more important that we take the impacts of vulnerable to flood damage because of climate change into account when the greater use of chipboard floors, dry “Climate change impacts on our designing or retrofitting our built wall plasterboard, cavity insulation, and business in several areas, e.g. environment. Despite this, more than 40% design features such as lower door of companies in this sector expressed low design of buildings, infrastructure thresholds to improve access. and support services, transport, levels or no concern over their vulnerability in the face of a changing climate. • Building design should take full account biodiversity, through our supply of future potential water constraints, • Many non-domestic buildings such as chain and through all our through use of ‘grey water’ recycling and offices and shops have high internal heat atmospheric impacts (energy and other water conservation practices. gains and therefore require cooling in all fuel consumption).” except cold winter weather. Temperature • Climate change adaptation and Carillion PLC, FTSE 250 increases will significantly increase mitigation are closely related for the built cooling loads in new and existing environment; many single measures will building stock. It is vital that any new have effects on both. For example “Sainsbury’s is potentially affected cooling is low-carbon, in line with planting trees reduces summer by these symptoms of climate emissions reductions targets. Warmer temperatures (adaptation) and cooling change both directly (in so far as winters will also reduce heating loads (mitigation). store operations, warehousing and requirements. distribution could be affected having • In order to meet comfort criteria for a a direct effect on product present-day ‘hot’ summer, several features can be included in building availability) and indirectly (in so far design to manage indoor temperatures. as our global supply chain could be Examples are high thermal mass, affected by events further afield shading, and natural (windows open) or which in turn could potentially mechanical (fans) night-time ventilation. These features may be lacking in existing compromise product availability).” buildings, and are expensive, difficult or J. Sainsbury, FTSE 100 sometimes impossible to retrofit.

Figure 6: Knowledge points for construction and building materials sector

2006 Adapting to climate change: lessons for London London Climate Change Partnership

2005 Beating the heat: keeping UK buildings cool in a warming climate Arup and UKCIP

Climate change and the indoor environment: impacts and adaptation CIBSE TM36

Adapting to climate change: a checklist for development Three Regions Climate Change Group

Climate change risks in building – an introduction CIRIA

2003 Building knowledge for a changing climate EPSRC and UKCIP

14 Sector summaries

Food-related industry General retailers Buy now while stocks last Because of its reliance on agricultural It is clear that the weather plays a (The Indepedent, 31 May 2006) production, stable energy supplies and significant part in affecting consumer distribution systems, the food-related preferences, and the complex distribution • GlaxoSmithKline, the company that industry is exposed to climate risks across systems of general retailers can make this owns Ribena and buys 95% of the all activities. CDP respondents in this sector vulnerable to the impacts of climate UK blackcurrant harvest, is sector as a whole have not grasped the change. Despite this, none of the general concerned that production of the fruit sector’s vulnerability to climate risks, with retailers who responded to the CDP4 will suffer in milder winters. only 12.5% of companies expressing a questionnaire expressed a high level of • The pharmaceutical group has asked high level of concern about the impacts of concern. More than two thirds of scientists to cross-breed varieties climate change, though a few market respondents expressed low levels or no that are less reliant on harsh winters leaders are taking this issue very seriously. concern over their vulnerability in the face and heavy frosts. of a changing climate. • As part of a wider global market, the • Growers of UK blackcurrants have UK’s food-related industry is vulnerable • General retailers are less exposed to the noted that crops, currently worth to the complex impacts of climate direct impacts of climate change than, about £10 million annually, have change on competitors and customers. for example, the agricultural or declined in recent years. manufacturing sectors, but they face • Higher temperatures, changing patterns knock-on impacts in terms of supply of rainfall, and knock-on impacts on chains and distribution, premises, and pests, diseases and competing plants all changing structures of market demand. A weather eye on the bottom line mean that crops may no longer be (The Observer, 6 August 2000) economically viable in current locations • All premises and transport systems are under future climate conditions. Crops vulnerable to weather-related events like • Weather has a strong effect on that remain workable may be of reduced floods, storms, subsidence. consumer preferences, and retailers quality. Infrastructure for transport and utilities is stand to benefit by taking this into particularly vulnerable, and therefore account for supply planning. • Current production methods and market places at risk wholesale and retail trade standards (e.g. supermarket washed • The Observer reports that sales of businesses. produce) are water and energy intensive, canned lemonade rise as and may become increasingly • Retailers with global markets or temperatures exceed 18°C, but expensive. suppliers will be affected by climate decline again on very hot days when change impacts in other countries. consumers prefer water to quench • Diversification into new crops with which their thirst. they have little experience growing • People tend to consume different kinds exposes producers to vulnerability. In of products in different weather • Banana sales slump during cold addition, investment in equipment conditions and in different seasons. months and also perform badly constrains producers to specific crops Market opportunities may result from during the hottest months. until the capital is repaid, making it climate change. • Understanding the impact on difficult to diversify. • The impacts of temperature, rainfall and customer demand can be the • As temperatures increase, suppliers and wind upon the buildings in which retail difference between a good and a bad distributors will be increasingly forced to business is conducted are important. trading statement. rely on refrigerated/cooled systems for Working conditions in such buildings Sales suffer after hot summer produce and livestock. Any new could become adversely affected in high (Financial Times, 8 September 1995) refrigeration or cooling systems should summer temperatures, reducing morale be low-emission and low-carbon, in line and productivity, whilst driving rains • The long hot summer of 1995 with emissions reductions targets. could necessitate higher levels of routine affected seasonal consumer maintenance. Additional cooling may be purchasing patterns, with customers • During hot, dry summers there will be an required to alleviate higher working uninterested in autumn and winter increasing risk of interruption of water temperatures, and this must be achieved clothing while temperatures remained supply to irrigation systems. without jeopardising emissions high. • Staff may need training in new skills reductions targets. • Many retailers postponed acceptance associated with new crops, new of, and payment for, autumn/winter technologies and new approaches to orders, causing share prices in some land management. A largely outdoor clothing manufacturers to suffer. agricultural workforce is at increased risk of heatstroke and skin cancer. Its too hot to shop as records tumble (Daily Telegraph, 27 July 2006) • Continuing hot weather is causing problems for shops with sales down 5%. • Department stores reported that trade was down 7.3%.

15 Sector summaries

Hotels and leisure • Hotels and other leisure developments Breton tourism boosted by the must be built with the future climate in The global nature of the hotel and leisure heat wave (AFP, 14 June 2004) mind. Many hotels, cafes, restaurants, industry makes this sector particularly and visitor attractions in the UK do not • Tourism professionals in Brittany vulnerable to climate risks worldwide. It will have air conditioning at present. Low- attributed one million additional be affected by market shifts in the UK, as carbon cooling of indoor environments visitor nights in last minute well as changes to global competitors and may be necessary to meet customer reservations or lengthened stays to international consumer preference. Despite expectations. the heatwave of August 2003. this, none of the CDP respondents indicated • Visitors keen to flee the strong heat of that they were highly concerned about their • Riverside locations may become less the south or centre of France found exposure to climate risks. Three-quarters of attractive with increased risk of flooding. refuge on the moderate Finistère the leisure and hotel respondents expressed Sports and recreational fishing could coast of Brittany. a low or no level of concern. suffer in dry summers, and there may be insufficient water to maintain inland • Southern Europe and other traditional Global warming to wash away canal navigation. Maintaining water destinations may become less attractive beaches, warns Spanish study (The quality will be critical during hot, dry for summer holidays due to increasingly Guardian, 11 September 2006) summers with low stream flows. This hot temperatures and the potential for could also affect the attractiveness of • Spain’s beaches are expected to water availability problems and loss of waterside commercial leisure decrease by an average of 15 metres beaches to sea level rise. by 2050, according to a Spanish developments. environment ministry report that • Though this may result in increased visits highlights the effects of rising sea to British and other northern European Insurance destinations, in order to exploit this levels and stronger waves and The insurance industry has considered potential opportunity operators and currents on the country’s coasts. adaptation more thoroughly and for longer managers must maintain a high quality than most other sectors. Most major • Holiday homes on unprotected environment, efficient transport systems insurance organisations globally are beaches are directly at risk of and sufficient capacity to cope with a rise beginning to ask questions and produce flooding. in tourist numbers, all of which will be guidance on management of climate risks. vulnerable to climate risks. • The report’s coordinator, Professor More than half of the respondents in this Raúl Medina, said that property in • Sea level rise, coupled with an increased sector expressed a high or medium level of areas currently popular with British frequency and severity of sea storm concern about climate change impacts, holiday home buyers is an surges will contribute to the loss of UK reflecting the fact that this industry is increasingly bad long-term beaches. gaining a clear understanding of the investment. complexity of this as a business issue.

Scotlands ski industry balances Figure 7: Knowledge points for insurance sector precariously (Financial Times, 10 January 2006) 2006 Climate change: adapt or bust Lloyd’s • The number of skier days across Scotland fell to just under 150,000 in the 2005-06 season, down from over 650,000 in 1987-88, according to Visit 2005 Availability and affordability of insurance under climate change: Scotland. a growing challenge for the US CERES

• The impact of climate change on the Financial risks of climate change Association of British Insurers already unpredictable winter sports season has influenced managers to market ski resorts as all-year 2004 A changing climate for insurance Association of British Insurers destinations. This follows the example of Whistler in Canada, a centre for skiing in winter and mountain biking and walking in the 2002 Climate risk to global economy UNEP Financial Initiatives summer.

2001 Climate change and insurance Chartered Insurance Institute

Climate The implications of climate change for the insurance industry change & insurance Building Research Establishment Chartered Insurance Institute

1994 The impact of changing weather patterns on property insurance Chartered Insurance Institute

16 Sector summaries

• The insurance sector is highly sensitive to significant impacts on businesses. “In general insurance Aviva currently weather and climate risks, and the Transport and delivery systems for incurs several hundred million industry has developed wide experience goods and services are also vulnerable and understanding of the impacts of to climate risks. pounds worth of claims per annum climate on its operations. These include from weather based events across • Premises affected by flooding can claims associated with short term severely damage business profitability our European and Canadian extreme events like flash flooding, and through costly refurbishment, temporary businesses.” longer term events such as hot, dry spells lack of access, and disruption to trading. which can lead to increased subsidence. Aviva, FTSE 100 • Insurance markets have significant Mining, steel and other metals overseas exposures to climate change “Weather is an important Several CDP4 respondents in the mining, risks around the world. steel and other metals sectors referred to operational aspect for Rio Tinto • Typically, weather damage accounts for the risks they face due to inevitable climate operations. Many Rio Tinto one quarter of total property insurance change. A third of the companies who operations are in areas where there claims in the UK, but this may rise to responded to the questionnaire expressed is competition for water. Some between one third and one half of total a high level of concern, while another third operations are in storm (cyclone) claims in event years such as 1990 and expressed a medium level of concern. 2000. The severe storms in 1990 in the prone areas. Shipping is vital to the • Mining and metals are energy and water UK led to property claims of more than transport of our bulk commodities, intensive industries, already susceptible £2.4 bn, while the floods in autumn 2000 to varying climatic patterns. The particularly from Australia. Some resulted in insured costs of £1 bn (both availability and maintenance of these operations have unusual 2004 prices). two climate-sensitive resources is dependence upon climate eg • Climate change could significantly essential to the success of the sector’s Diavik diamond mine in Canada’s increase the costs of storm damage, operations. flooding and subsidence, and climate Northwest Territories is mostly • Mining operations today are conscious risks in other sectors of the economy supplied in winter using an of the risks of heavy rains and of high could have further implications for ice road.” flood potential, and these risks will financial markets. increase in the future. Rio Tinto, FTSE 100 • Life and pensions products typically lock- • Increased rainfall and risk of flooding in assumptions (on investment returns, creates a higher risk of overflow of mortality, morbidity, policyholder “Potential changes in weather storage reservoirs and of holding ponds behaviour etc) for very long periods, often patterns including the intensity and containing contaminants. If released into 20-30 years and beyond. frequency of storm activity and the surrounding environment, • Because the insurance industry is so contaminants can pollute soils, plants rainfall patterns will impact some vulnerable to climate risks, the sector can and surface and groundwater supplies. sites directly.” be seen as a useful barometer of the • Refineries and smelters use large BHP Billiton, FTSE 100 financial impacts of climate change. volumes of water for processing and cooling. Metal and mining metal Media and entertainment processes cannot proceed efficiently CDP4 respondents in the media and when low rainfall produces too little entertainment sector have not considered water. Plant discharge water and the impact of climate change on their drainage infiltrating through refinery and business. Over 90% of companies who smelter wastes can become answered the questionnaire expressed little contaminated. During long hot summers, or no concern about the climate risks they low stream and river flows may face. necessitate tighter discharge regulations. • Workers in the media and entertainment sector are highly office-based, and may • Global impacts of warming on, for experience working conditions beyond example, permafrost, sea lanes, and acceptable thresholds in buildings flying weather could significantly designed for the current, rather than the improve or reduce the efficiency of future, climate. resource extraction. • Nearly all businesses make use of • As the mining and metals industries play premises, transport systems, and utilities, an important and often central role in all of which are vulnerable to weather- many rural economies, climate affects related events like floods, storms, community livelihoods as well as subsidence. Disruption to electricity productivity. supplies, water supply and sewerage as a result of extreme events will have

17 Sector summaries

Oil, gas and electricity Hot summer topic: Why heat waves spur electricity blackouts This sector is highly exposed to climate (ScienceDaily, 24 August 2006) risks across all industry activities, from electricity generation, oil and gas • Very high temperatures in the extraction, energy distribution and trading. northeastern United States during Despite these significant risks, only 10% of August 2006 saw ISO New England, CDP respondents expressed a high level the company that operates the of concern about climate change impacts region’s electrical grid, introduce on their business. Almost half (40%) of innovative measures to deal with respondents expressed little or no record power demands. concern. • To ease pressure on the power grid, • Many of the UK’s coal- and gas-fired the company reimbursed businesses power stations are cooled by river water. “Only last year in 2005 the integrity willing to curtail daytime usage of Hot dry summers and decreased stream electricity, redirected excess power of our operations was severely flow increase the risk that river water from other parts of its network, and volumes will be insufficient to dilute challenged by the two hurricanes purchased additional power from cooling water effluent. In these cases Katrina and Rita that struck some of Canada. power stations are forced to reduce our US assets.” • By contrast, California suffered a output in order to meet regulatory pollution control standards. Significantly, BP, FTSE 100 longer heatwave and blackouts, caused mainly by failed distribution these episodes usually coincide with equipment. peak demand for energy for cooling. • The majority of blackouts are not • Many of the UK’s coal, oil and gas (and caused by power shortages. In fact, all nuclear) power stations are located about 90% of blackouts in the region along the coast, and are significantly are the result of equipment failure on exposed to flooding and erosion risks ageing and overloaded distribution due to sea level rise and increased networks. storm-surge height. Air-conditioners spark power • The observed shift in demand, from shortage fear (The Daily Telegraph, energy for heating in winter towards 27 July 2006) cooling and refrigeration in summer, will be exacerbated by rising summer • The National Grid urged companies temperatures. Summer peak demand to increase generation capacity for will be amplified in cities through the the second time in a week to avoid a Urban Heat Island effect. shortage. • Output from many forms of generation, • Demand has increased above particularly gas-fired, is lower in hot traditional summer figures due to the weather due to reduced turbine increase in use of air conditioning efficiency. In a hot 2003-type summer, during the heatwave. for example, output could be reduced by • During summer months the 10%. By the 2040s, summers like the generating companies switch-off one experienced in 2003 will become the some of their power stations to carry norm. out maintenance. More warnings • Extreme weather events, like Hurricanes from the National Grid are possible if Rita and Katrina, can mean losses in oil the heatwave continues during the refining capacity and consequent oil period when generators seek to carry price rises. out maintenance work. • As facilities age, and as more demand is • The spot price of electricity jumped put on them, they are more likely to fail 73%.The electricity supplier said it under extreme events and incremental had suffered four separate network climate change. failures, aggravated by high demand for air conditioning in the unusually hot weather.

18 Sector summaries

Pharmaceuticals and biotechnology Real estate “Our operations have relatively CDP respondents in this sector do not yet Buildings, developments and their limited exposure to these risks appear to have considered their locations will be affected by climate however our investment decisions vulnerability to climate risks. Of those who change, through changes to structural are heavily influenced by others’ provided a response to the CDP integrity, or increased vulnerability of questionnaire, 80% expressed little or no external fabric, internal environment and ability to factor in these concern about climate risks. service infrastructure. Despite these risks, considerations.” almost 90% of respondents in this sector • This sector is heavily reliant on both F&C Asset Management, FTSE 250 expressed little or no concern about their water and energy. Climate-related exposure. disruption to the supply of either resource will affect sector performance. • Property has a high level of exposure to the physical impacts of climate change. • This industry is also reliant on production The main risks include increased line and factory workers, whose comfort incidence of overheating, flooding, and and productivity can be compromised by subsidence. warmer working conditions. • Analysis of both location and design will • Higher indoor temperatures can be important aspects of climate-proofing compromise high technology and property investments. Meeting demand precision engineering processes. This for building comfort (e.g. requirements can have knock-on impacts on for cooling under hotter summer performance conditions and quality conditions) will complicate the situation standards for production processes. still further. These demands must • Changes to chemical processes, increasingly be met through innovative particularly under extremes of high building techniques and thermally temperature, will affect process efficient properties, rather than energy operations, corrosion rates, storage dependent devices such as air- materials and times. Vulnerability of conditioners. supply chains may lead to an increased • Consumers and regulatory bodies may disruption to supply. This may mean that require better performance from providing additional storage capacity buildings as climatic conditions change, may be desirable to provide greater providing an opportunity for early resilience. movers to gain competitive advantage. • Changes to chemical processes and • The changing climate poses additional storage may also contribute to an risks, including delays to construction increased potential for contamination. and maintenance programmes, poor There are considerable regulatory risks internal environment and mould growth, to consider, as handling, transmission slope instability, damage to building and storage safety standards may be fabric and cladding, and structural compromised. damage from wind and precipitation • Factory, lab and storage premises are events. Unless these risks are managed generally vulnerable to extremes of wind, this sector may be vulnerable to summer heat, driving rain. It is difficult to reputational, litigation and regulatory adapt existing buildings to future climatic risks in the future. conditions, and new facilities should be designed with climate change in mind. • There are significant opportunities for delivering new products and treatments to meet the challenges of new diseases and health issues.

19 Sector summaries

Software and computer services Specialty and other finance Heatwave puts IT leaders in hot seat as systems wilt (Computer Although high temperatures this summer Respondents in the specialty and other Weekly, 1 August 2006) caused serious problems for computer finance sector show a relatively high level systems on both sides of the Atlantic, of awareness of the risks they face from • The prolonged heatwave during July 100% of respondents in this sector the impacts climate change. Over 50% of 2006 affected IT departments and expressed little or no concern about their companies who responded to the CDP4 datacentres as power supply exposure to climate risks. questionnaire in this sector expressed a interruptions caused the loss of vital high or medium level of concern about cooling systems. • This sector has seen massive expansion their vulnerability and exposure to climate in recent years. As high users of energy, • The London site of Globix, a risks. software and computer services datacentre operator, was protected industries are vulnerable to any damage • The specialty finance sector is beginning by back-up generators, but others to infrastructure or energy supply. to recognise that it faces significant were not so lucky. impacts from climate change. These • Climate change will increase the risk of • A local authority was forced to turn off include the threat of business failure subsidence damage to communications non-essential servers and a leading when companies cannot maintain masts and possible increased storm media firm suffered a server room air sufficient financial capacity to deal with damage to overhead cables, disrupting conditioning failure. These climate risks. operations and processes. Any increase organisations experienced minimal in downtime from loss of energy supply • The wider financial service sector is a impacts because business continuity or telecommunications could have truly global industry, and as such will be plans were in place. significant cost implications. affected by both domestic and global • Server design can limit airflow to extreme events. • Higher indoor temperatures can individual components and around compromise high technology and • Some fund managers are assessing and racks. By leaving cabinet doors open precision engineering processes. This responding to the implications of climate manager can significantly reduce can have knock-on impacts on change now and in the future by server temperatures, though this may performance conditions and quality encouraging appropriate research into not be feasible in high-security standards. the implications of climate change, and environments. by asking appropriate questions of • Like all high technology and engineering Power cuts hit UK businesses (IT corporate management on how they are industries, the software and computer Week, 31 July 2006) responding to climate change. These services sector is vulnerable to any measures can reveal exposure to climate disruption in supply chain or • Major internet services and IT change and implications for portfolios. companies were hit by power cuts manufacturing processes. Both and blackouts in North America and incremental changes and extremes of • Risk management of potential climate the UK during the hot weather in July climate can interrupt engineering change impacts, coupled with the 2006. operations. Just-in-time manufacturing implementation of regulatory regimes for and delivery systems can add to the greenhouse gas emission mitigation, • Yahoo UK suffered service complexity of supply chain and provide significant business disruptions and Level 3’s London operational risks. opportunities. datacentre was temporarily without power, affecting several other • Increased awareness and concern about • Risk management is resulting in the companies. climate change may broaden the market development of specialist financial for technologies in both mitigation and instruments like catastrophe bonds and • In Los Angeles power interruptions adaptation (e.g. monitoring building weather-related international trading brought down large web services like temperatures and/or flood risks). markets. MySpace, the popular social networking site. • Companies in this sector are strongly advised to have well worked out and tested business continuity plans.

20 Sector summaries

Support services Telecommunication services “Henderson Global Investors has Companies within the support services Very few of the telecommunications begun to be affected by the physical sector are exposed to supply chain, companies which answered the CDP4 impacts of climate change, notably process, market and workforce risks request for information expressed a high through investments in the associated with the impacts of climate level of concern about their vulnerability to change. In addition, they are indirectly climate risks, though a few market-leading insurance sector and in companies vulnerable to the risks faced by their client respondents showed a thorough damaged by increased extreme sectors. CDP4 respondents show a low understanding of their exposures. These weather events (such as oil and gas awareness of these risks, with 70% described well thought out contingency facilities in the Gulf of Mexico). As a expressing a low or no concern over their and adaptation plans. The majority of result, we are incorporating the exposure to climate risks. respondents (60%) expressed a medium level of concern. issue of adaptation into the • The support services sector underpins questions we pose to sell-side business in all other industries, providing • Climate change will increase the risk of facilities management, procurement, subsidence damage to communications investment analysts.” security, maintenance, cleaning, masts and possible increased storm Henderson Group, FTSE 250 administrative and customer services. As damage to overhead cables, disrupting such, support services will be vulnerable operations and processes. Any increase to the compound impacts of climate in downtime from loss of energy supply “Climate change is not believed to change on other sectors. or telecommunications could have be a significant commercial risk or significant cost implications. • The business risks from climate change opportunity for our operations or include the increased frequency of • The substantial fixed assets managed by our products.” extreme weather conditions, rising sea the telecommunications sector are De La Rue, FTSE 250 levels, emerging health impacts, knock- vulnerable to damage as climatic on impacts on insurance markets, conditions change. Extreme events business resources, personnel, and present a significant risk, but steady “The threat to BT operations arises corporate preparedness, and increasing incremental changes in temperature, from the extreme weather legal and regulatory pressures. Support precipitation and sea levels will also conditions associated with climate services will be open to all of these risks. present an increasing challenge to operations and distribution of services. change, which can cause damage • Businesses within the support sector will Any requirement for increased to our infrastructure and faults in our be particularly exposed to their clients’ maintenance and repair will have a direct transmission network, both leading risks. Businesses with a property cost impact. management focus will be susceptible to to customer dissatisfaction.” the risks faced by the real estate, • If facilities are affected by extreme BT Group, FTSE 100 construction and building materials events or strained by incremental climate sector. Companies with large, office- change, network failure or damage can based workforces will be vulnerable to result in serious service disruption. This risks associated with indoor working can cause significant harm to a service conditions, as well as provider’s reputation. telecommunications and energy supply • All other business sectors are reliant on disruptions. the telecommunications services and • Climate risks present new opportunities infrastructure. Any negative impacts in for businesses, particularly as the this sector increase the risks in every number of companies publicly other industry. addressing the risks has increased • Higher indoor temperatures can dramatically over the past several years. compromise the operation of high These opportunities include risk technology and telecommunications management, consultancy opportunities equipment. This can have knock-on in engineering and environmental fields, impacts on performance conditions and and reputational gains. quality standards. • Telecommunications systems should be actively managed to test their resilience and flexibility to climatic conditions over their lifetimes. Management options that enhance flexibility and resiliency of assets should be developed.

21 Sector summaries

Tobacco and beverages • Passenger comfort can be significantly Shake-up hits Starbucks shares compromised during summer heatwave Although many companies in this sector (The Guardian, 4 August 2006) events, leading to reputational damage. are critically dependent on agricultural Elderly or vulnerable passengers, who • During the July 2006 heatwave staff output, availability of water, and complex use public transport disproportionately at Starbucks coffee shops struggled production processes only 14% of to their numbers in the population, are at to keep pace with demand for respondents expressed a high level of serious health risk in conditions that the frappuccinos and other frozen drinks concern over the risks they face as a result fit and healthy find merely during the busiest morning hours, of the impacts of climate change. when customers normally order hot uncomfortable. • The beverage and tobacco industries are beverages. • Reputation can also be negatively heavily reliant on raw materials and affected by the delays caused by speed • Sales growth slowed as a result, and resources, and thus highly exposed to restrictions imposed on very hot days. shares fell by 11% after the company climate risks surrounding availability of announced a change in store water and changes in agricultural growth • Railways along the coast are vulnerable operations to improve service. patterns. Some CDP respondents are to storm surges, high tides and cliff • Sales recovered after the chain aware of these risks, and many are instability while tunnels are vulnerable to reviewed its employee training and in- responding with multiple sourcing flooding. schemes or production continuity plans. store production process. • Subsidence affects structures on which English wine sparkles as global • CDP respondents are less aware of the the road and rail network is reliant, climate warms up (The Times, 11 risks to markets and workforce. Although including bridges, tunnels, September 2006) some identified possible changes in embankments and cuttings. Land-slips consumer behaviour, none had may increase as higher winter rainfall • The English wine making industry is considered the risks associated with a intensities lead to increased slope enjoying extraordinary success, partly large outdoor workforce. instability. as a result of higher average temperatures. • There is low awareness within this sector • The thrust from a jet engine falls off as of the climate risks associated with the air temperature rises above 25°C to • Warmer September temperatures production processes, logistics, 30°C, depending upon design. This can have created a lengthened thermal performance and operations. However, if restrict the take-off payload below a growing season which, when companies design operational specific density threshold. Higher combined perfect summer weather, processes to be flexible and resilient, temperatures will increase the need for create superb conditions for grape they can often adapt to changing longer runways or payloads restrictions. cultivation. demand or risk in very short time scales. • Even though the number of days of frost • Cultivators anticipate an abundant and snow will decrease, it will be Transport harvest this year, with production important to retain experience in dealing expected to top 3 million bottles. This The transport sector is often viewed simply with sub-zero temperatures. represents a 50% increase in English as a source of greenhouse gas emissions. • Any disruption within the transport wine production. However, it is also essential to consider the sector has knock-on impacts for impacts of climate change on transport • Prospects are particularly good for businesses in every other economic infrastructure and users. A very low sparkling wine. Vineyards in southern sector. England benefit from the same chalk proportion (10%) of CDP respondents in soil enjoyed by those in northern this sector expressed a high level of • Infrastructure should be built and France, yet industry experts have concern about exposure to climate risks, maintained to withstand hotter speculated that in ten years it is likely while 50% expressed little or no concern. temperatures, more intense rain, and higher sea levels. Contingency plans to be too warm for champagne to be • Transport infrastructure is vulnerable to should be adjusted in anticipation of made in northern France. flooding, which can cause severe more frequent use for more extreme disruption to services and require • English wines are popular at Sir impacts. Terence Conran’s Le Pont de la Tour frequent repair. An increased restaurant in London. requirement for maintenance has a direct • Port and harbour facilities will need to be cost impact. able to cope with changing sea levels, wind speeds and storm surges. • Infrastructure is similarly at risk of damage in extremely hot weather. The high temperatures in the summer of 2003 melted some road surfaces. Speed restrictions due to real and potential rail buckling caused widespread delays on the rail network.

22 Sector summaries

Utilities Trapped in oven jet: Passengers “As a significant proportion of our All utilities face some significant climate 5-hour hell at Heathrow as planes air product is derived from agricultural risks. The impacts of climate change will con fails (Evening Standard, 18 means, the supply chain is affected compound an already challenging July 2006) by weather patterns and changing situation, and this sector is already taking this issue very seriously. All of the CDP4 • With temperatures hitting 33°C, on landscapes.” one of the hottest days of the year, respondents in this sector expressed a British American Tobacco, FTSE 100 high or medium level of concern about over 170 passengers bound for the their exposure to climate risks. USA were forced to remain on board a flight at Heathrow for five hours as “As a ports operator we are at high • Water management companies and engineers repaired a failed air risk from extreme weather other utilities already manage for climate conditioning system. variability as part of their core business conditions and as a result insure activities. Climate change will mean they • The crew refused requests to against these risks wherever have to deal with new conditions. disembark as the aircraft was too far possible. However, we also have to from a terminal. • Utilities typically manage large fixed ensure that all new developments asset registers. Climate change will Long delays on Tube as more tracks are built with due regard to the buckle in heat (The Evening increase the risks and costs associated future conditions.” with asset design, construction, Standard, 10 May 2006) Associated British Ports, FTSE 250 performance, maintenance and value. • Speed limits were imposed on some • Low river flows are more affected by Underground routes in May 2006, pollutant loading. During hot, dry when engineers failed to “pre-stress” “The potential financial impacts summers discharge consents are and test the rails as temperatures could be significant, in particular tightened for sewage treatment works. increased. due to loss of revenue as a result of • Hot, dry summer conditions create water • Speed limits of 20 mph were major disruption to services.” supply problems precisely when demand imposed. FirstGroup, FTSE 250 is highest. Failure to plan effectively for • The delays caused significant these conditions will result in disruption to tens of thousands of reputational risks. commuters, with knock-on impacts • Storm events may increasingly affect for the rest of the network. storm drainage and sewers, which are already highly susceptible to flooding, Flash flooding and combined sewer Raw sewage flows into the Thames overflows will increase with greater (The Evening Standard, 2 May 2006) rainfall event intensity and frequency, leading to greater property damage and • Storm overflows present a major associated cost recovery. problem for the Olympic Games. • Coping with water and climate related • Computer models have shown that risks will require a range of measures, sewage could flow into the Olympic structural and non-structural. This village. presents opportunities to market new • The Environment Agency has products and services for assessment, expressed concern that there is a forecasting, communication, planning significant risk of a discharge and implementation. occurring during the Games. • Water and electricity utilities have a duty to restore services to dwellings as soon as feasible after extreme weather events. Climate change will exacerbate risk and damage to reputation if services are disrupted or curtailed.

23 What can business do?

What can business do?

Businesses can respond to build resilience Changing markets, customer needs and and climate-proof their interests. investor expectations will present Uncertainty about the future is not a significant opportunities for those reason for inaction. companies that take action to climate- proof their businesses. There is sufficient information to enable the impacts of a changing climate over the The London Climate Change Partnership next 40 years to be embedded in decision- (LCCP) Finance Group, which has making at strategic and project levels. members from insurance, institutional Adaptive management is feasible. investment and banking, as well as the Greater London Authority and the Businesses should review their climate risk Environment Agency, has written a report management strategies and check that on the implications of climate change for they are responding to both the mitigation the financial services sector. Based on this and the adaptation agendas. Action is report, the Mayor of London, Ken required on both – now. Livingstone, is hosting a round table Taking adaptive action early may be discussion with senior representatives cost-effective when compared with the from the financial services industry in late costs associated with remedial action at a 2006, aimed at identifying actions that the later date (although clearly each industry can take to climate-proof its investment decision has to be subject to decision-making. its own financial appraisal). When analysing potential action, companies should consider their fiduciary responsibilities.

24 Appendix 1: References

Appendices Appendix 1: References

Association of British Insurers (2005). Hulme,M, Jenkins,GJ, Lu,X, Turnpenny,JR, Three Regions Climate Change Group Financial Risks of Climate Change. Mitchell,TD, Jones,RG, Lowe,J, (2005). Adapting to climate change: a London. Murphy,JM, Hassell,D, Boorman,P, checklist for development. Greater McDonald,R and Hill,S (2002). Climate London Authority, London, UK. Chartered Institute of Insurers (2001). Change Scenarios for the United Climate Change and Insurance. Ed. UKCIP (2005). A changing climate for Kingdom: The UKCIP02 Scientific Dlugolecki, A. Chartered Insurance business: business planning for the Report. Tyndall Centre for Climate Change Institute Research Report, London. impacts of climate change. Oxford, UK. Research, School of Environmental Chartered Insurance Institute (1994). The Sciences, University of East Anglia, UNEP Finance Initiative (2005). A legal impact of changing weather patterns on Norwich, UK. 120pp. framework for the integration of property insurance. London. environmental, social and governance IPCC (2001). Climate change 2001: The issues into institutional investment. Crichton, D (2001). The Implications of Scientific Basis. Summary for Policy Freshfields Bruckhaus Deringer. Climate Change for the Insurance Makers. Cambridge University Press, Industry. Building Research Cambridge. 98pp. UNEP Finance Initiative (2002). Climate Establishment, Watford, England. Risk to Global Economy. Executive Lloyd’s (2006). Climate change: adapt or Briefing Paper. Dlugolecki, A (2004). A changing climate bust. 360 Risk Project. London. for insurance. A summary report for Chief Vivian, S, Williams, N, and Rogers, W London Climate Change Partnership Executives and Policymakers. ABI, (2005). Climate change risks in building (2006). Adapting to climate change: London. — an introduction. CIRIA C638. London. Lessons for London. Greater London Emanuel, K (2005). Increasing Authority, London. destructiveness of tropical cyclones London Climate Change Partnership over the past 30 years. Nature, 436, (2005). Climate change and Londons 686-688. transport systems. Greater London Hacker, JN, Belcher, SE & Connell, RK Authority, London. (2005). Beating the Heat: keeping UK London Climate Change Partnership buildings cool in a warming climate. (2002). Londons warming: The impacts UKCIP Briefing Report. UKCIP, Oxford. of climate change on London. Hacker, JN, Holmes, MJ, Belcher, SE and Metcalf, G, Chambers, F, Charlesworth, A, Davies, G (2005). Climate change and the Forrest, V, Hunt, J, McEwen L, Russell, K, indoor environment: impacts and and Schofield, S (Eds) (2003). Warming to adaptation. (CIBSE TM36) Chartered the Idea, Technical Report, South West Institution of Building Services Engineers. Region Climate Change Impacts London. Scoping Study. Cheltenham, UK. Hadley Centre (2005). Climate change Mills, E, Roth, RJ, and Lecomte, E (2005). and the greenhouse effect — a briefing Availability and affordability of from the Hadley Centre. insurance under climate change: a Hewer, F (2006). Climate change and growing challenge for the US. Ceres. energy management. Prepared for Palutikof, JP, Subak, S and Agnew, MD National Grid, EDF Energy and E.ON UK. (Eds) (1997). Economic Impacts of the Hot Summer and Unusually Warm Year of 1995. University of East Anglia, Norwich, UK. Stott, PA, Stone, DA and Allen, MR (2004). Human contribution to the European heatwave of 2003. Nature, 432, 610 – 614.

25 Appendix 2: About the Carbon Disclosure Project

Appendix 2: About the Carbon Disclosure Project

The Carbon Disclosure Project (CDP) • Investor community leadership provides a coordinating secretariat for supporting the work of other institutional investor collaboration stakeholders engaging with the climate regarding climate change. CDPs aim is change issue (e.g. policymakers, twofold: to inform investors regarding consultants, accountants) the significant risks and opportunities • A process applauded by investors such presented by climate change; and to as Sir John Bond of HSBC (May 2004), inform company management business leaders such as Jeff Immelt regarding the serious concerns of CEO GE (May 2003), and politicians such shareholders regarding the impact of as Tony Blair (February 2003) these issues on company value. The reasons for CDP’s success are many. Having launched in December 2000 at No No longer can fiduciaries claim to be 10 Downing Street, CDP has four times unaware of what is at stake. Taking climate invited institutional investors to collectively risks into account is now becoming part of sign a single global request for disclosure smart financial management. Failure to do of shareholder value relevant information1 so may well be tantamount to an regarding Greenhouse Gas Emissions. In abdication of fiduciary responsibility and doing so it has created four of the largest indication of poor management. ever collaborations of institutional investment capital – $4.5trillion, $10.2 CDP is able to accept disclosure trillion, $20.2 trillion, and now $31 trillion of statements from any company at any time. assets under management. These responses will be made available from the CDP website www.cdproject.net The information requests have historically been sent to the 500 largest global Future plans companies (the FT 500) but in 2006 CDP expanded and the information request was CDP is now an annual process and the sent to 2000 companies globally, of which CDP5 information request will be sent on 1 900 answered the questions. More than February 2007. CDP will focus on 350 of the worlds 500 largest corporations improving the quality and quantity of have completed our previous information responses from corporations and helping requests regarding their Greenhouse Gas to expand the project in relevant countries emissions and these responses can be and sectors. downloaded from www.cdproject.net. CDP would be delighted to explore future In summary the project has created: participation with all interested institutions and we invite organizations to contact us • The largest registry of corporate at [email protected] Greenhouse Gas emissions data in the world The CDP Secretariat extends sincere thanks to the signatory investors and • A world-leading and up to date responding corporations for participation information repository for the investment in CDP4. community facilitating superior equity and debt investment decision-making • Shareholder support for corporations to measure and manage the climate change issue

26 Appendix 3: CDP4 questionnaire

Appendix 3: CDP4 questionnaire

This is the fourth CDP information request 6 Emissions 9 Energy costs (CDP4). Please state the dates of reporting What is the quantity in tonnes CO e of What are the total costs of your energy periods, and if reporting emissions for the 2 annual emissions of the six main GHG’s consumption, e.g. fossil fuels and electric first time, please provide data for the last produced by your owned and controlled power? Please quantify the potential four measurement periods, where facilities in the following areas, listing data impact on profitability from changes in available. For previous respondents, by country? energy prices and consumption. please highlight developments and trends since CDP3. The following pages provide • Globally. N.B. For electric utilities ONLY guidance on answering the questionnaire • Annex B countries of the Kyoto Explain to what extent current and future and further information about CDP4. Protocol. emissions reductions involve a change of 1 General use in existing assets (i.e. fuel switching at • Emissions Trading Scheme. existing facilities) or a need for new How does climate change represent To assist in comparing responses please investment? What percentage of your commercial risks and/or opportunities for state which methodology you are using for revenue is derived from renewable your company? calculating emissions and the boundaries generation in a government sponsored 2 Regulation selected for emissions reporting. Please price support mechanism? standardise your response data to be What are the financial and strategic consistent with the accounting approach impacts on your company of existing employed by the GHG Protocol regulation of GHG emissions, and what do (www.ghgprotocol.org). Please list GHG you estimate to be the impact of proposed Protocol scope 1, 2 and 3 emissions future regulation? equivalent showing full details of the 3 Physical risks sources. How has this data been audited and/or externally verified? How are your operations affected by extreme weather events, changes in 7 Products and services weather patterns, rising temperatures, sea What are your estimated emissions in level rise and other related phenomena tonnes CO associated with the following both now and in the future? What actions 2 areas and please explain the calculation are you taking to adapt to these risks, and methodology employed. what are the associated financial implications? • Use and disposal of your products and services? 4 Innovation • Your supply chain? What technologies, products, processes or services has your company developed, Emissions reduction: What is your firm’s or is developing, in response to climate current emissions reduction strategy? How change? much investment have you committed to its implementation, what are the 5 Responsibility costs/profits, what are your emissions Who at board level has specific reduction targets and time-frames to responsibility for climate change related achieve them? issues and who manages your company’s 8 Emissions trading climate change strategies? How do you communicate the risks and opportunities What is your firm’s strategy for, and from GHG emissions and climate change expected cost/profit from trading in the EU in your annual report and other Emissions Trading Scheme, CDM/JI communications channels? projects and other trading systems, where relevant?

27 Appendix 4: CDP4 signatories

Appendix 4: CDP4 signatories

Aachener Grundvermogen Caisse des dépôts, France DnB NOR, Norway Kapitalanlagegesellschaft mbH, Germany Caixa Econômica Federal, Brazil Domini Social Investments LLC, USA Aberdeen Asset Managers, UK California Public Employees Retirement System, DWS Investment GmbH, Germany ABN AMRO Bank N.V., Netherlands USA Environment Agency Active Pension fund, UK ABP Investments, Netherlands California State Teachers Retirement System, Erste Bank der oesterreichischen Sparkassen USA ABRAPP – Associação Brasileira das Entidades AG, Austria Fechadas de Previdência Complementar, Brazil Calvert Group, USA Ethos Foundation, Switzerland Activest Investmentgesellschaft mbH, Germany Canada Pension Plan Investment Board, Eureko B.V., Netherlands Canada Acuity Investment Management Inc, Canada F&C Asset Management, UK Carlson Investment Management, Sweden AIG Global Investment Group, USA FAPES – Fundacao de Assistencia e Previdencia Carmignac Gestion, France Allianz Group, Germany Social do Bndes , Brazil Catholic Superannuation Fund (CSF), Australia AMB Generali Asset Managers Fédéris Gestion d’Actifs, France Kapitalanlagegesellschaft mbH, Germany CCLA Investment Management Ltd, UK First Swedish National Pension Fund (AP1), AMP Capital Investors, Australia Central Finance Board of the Methodist Church, Sweden UK ANBID – National Association of Brazilian Five Oceans Asset Management Pty Limited, Investment Banks, Brazil CERES, USA Australia ASN Bank, Netherlands Cheyne Capital Management, UK Folksam Asset Management, Sweden Australia and New Zealand Banking Group CI Mutual Funds Signature Funds Group, Fonds de réserve pour les retraites – FRR, Limited, Australia Canada France Australian Ethical Investment Limited, Australia CIBC, Canada Fortis Investments, Belgium AXA Group, France Citizens Advisers Inc, USA Frankfurter Service Kapitalanlagegesellschaft mbH, Germany Baillie Gifford & Co., UK Close Brothers Group plc, UK Franklin Templeton Investment Services Gmbh, Banco do Brazil S.A., Brazil Comite syndical national de retraite Bâtirente, Germany Canada Banco Fonder, Sweden Frater Asset Management, South Africa Connecticut Retirement Plans and Trust Funds, Bank Sarasin & Co, Ltd, Switzerland USA Fukoku Capital Management Inc, Japan BayernInvest Kapitalanlagegesellschaft mbH, Co-operative Insurance Society, UK FUNCEF, Brazil Germany Credit Suisse Group, Switzerland Fundação Atlântico de Seguridade Social, BBC Pension Trust Ltd, UK Brazil Daiwa Securities Group Inc., Japan BMO Financial Group, Canada Fundação CESP, Brazil Deka FundMaster Investmentgesellschaft mbH, BNP Paribas Asset Management (BNP PAM), Germany Fundacao Forluminas de Seguridade Social, France Brazil Deka Investment GmbH, Germany Boston Common Asset Management, LLC, USA Gartmore Investment Management plc, UK DekaBank Deutsche Girozentrale, Germany BP Investment Management Limited, UK Gen Re Capital GmbH, Germany Delta Lloyd Investment Managers GmbH, Brasilprev Seguros e Previdência S.A., Brazil Germany Generation Investment Managament, UK British Coal Staff Superannuation Scheme, UK Deutsche Bank, Germany Gerling Investment Kapitalanlagegesellschaft British Columbia Investment Management mbH, Germany Deutsche Postbank Privat Investment Corporation (bcIMC), Canada Kapitalanlagegesellschaft mbH, Germany Goldman Sachs, USA BT Financial Group, Australia Development Bank of Japan, Japan Hastings Funds Management Limited, Australia BVI Bundesverband Investment und Asset Development Bank of the Philippines (DBP), Helaba Invest Kapitalanlagegesellschaft mbH, Management e.V., Germany Philippines Germany Caisse de Depots et Placements du Quebec, Dexia Asset Management, Luxembourg Henderson Global Investors, UK Canada

28 Appendix 4: CDP4 signatories

Hermes Investment Management, UK Newton Investment Management Limited, UK Standard Life Investments, UK Hospitals of Ontario Pension Plan (HOOPP), NFU Mutual Insurance Society, UK State Street Global Advisors, USA Canada Nikko Asset Management Co., Ltd., Japan State Treasurer of California, USA HSBC Holdings plc, UK Ontario Municipal Employees Retirement State Treasurer of North Carolina, USA Hyundai Marine & Fire Insurance Co, Ltd, South System (OMERS), Canada Storebrand Investments, Norway Korea Ontario Teachers Pension Plan, Canada Stratus Banco de Negócios, Brazil I.DE.A.M -Integral Dévelopment Asset Oregon State Treasurer, USA Management, France Sumitomo Mitsui Financial Group, Japan Pax World Funds, USA Indexchange Investment AG, Germany Superfund Asset Management GmbH, Germany PETROS – The Fundação Petrobras de ING Investment Management Europe, Swedbank/FöreningsSparbanken – incl. Robur, Seguridade Social, Brazil Netherlands Sweden PGGM, Netherlands Inhance Investment Management Inc, Canada Swiss Reinsurance Company, Switzerland PhiTrust Finance, France Insight Investment Management (Global) Ltd, UK TfL Pension Fund, UK Pictet & Cie. (Europe) S.A., Germany Interfaith Center on Corporate Responsibility, The Collins Foundation, USA USA Portfolio Partners, Australia The Co-operative Bank, UK Internationale Kapitalanlagegesellschaft mbH, Prado Epargne, France The Dreyfus Corporation, USA Germany PREVI Caixa de Previdência dos Funcionários The Ethical Funds Company, Canada Ixis Asset Management, France do Banco do Brasil, Brazil The Royal Bank of Scotland Group, UK Jupiter Asset Management, UK Prudential Plc, UK The Shiga Bank, Ltd (Japan), Japan KLP Insurance, Norway Public Sector Superannuation Scheme and Commonwealth Superannuation Scheme, The Wellcome Trust, UK LBBW – Landesbank Baden-Württemberg, Australia Germany Third Swedish National Pension Fund (AP3), Rabobank, Netherlands Sweden Legal & General Group plc, UK Railpen Investments, UK Threadneedle Asset Management, UK Light Green Advisors, LLC, USA Rathbone Investment Management / Rathbone Tokio Marine & Nichido Fire Insurance Co., Ltd., Local Authority Pension Fund Forum, UK Greenbank Investments, UK Japan Lombard Odier Darier Hentsch & Cie, REAL GRANDEZA Fundação de Previdência e Trillium Asset Management Corporation, USA Switzerland Assistência Social, Brazil Triodos Bank, Netherlands London Pensions Fund Authority, UK RLAM, UK Tri-State Coalition for Responsible Investing, Maine State Treasurer, USA Robeco, Netherlands USA Maryland State Treasurer, USA Rockefeller & Co Socially Responsive Group, UBS AG, Switzerland Meag Munich Ergo Kapitalanlagegesellschaft USA UBS Global Asset Management (Deutschland) mbH, Germany SAM Sustainable Asset Management, GmbH, Germany Meeschaert Asset Management, France Switzerland Unibanco Asset Management, Brazil Meiji Yasuda Life Insurance Company, Japan Sanlam Investment Management, South Africa UniCredit Group, Italy Meritas Mutual Funds, Canada Sanpaolo Imi Asset Management Sgr, Italy Union Investment, Germany Merrill Lynch Investment Managers, UK Sauren Finanzdienstleistungen, Germany United Methodist Church General Board of Mitsubishi UFJ Financial Group (MUFG), Japan Schroders, UK Pension and Health Benefits, USA Mitsui Sumitomo Insurance Co Ltd, Japan Scotiabank, Canada Universal-Investment-Gesellschaft mbH, Germany Mizuho Financial Group, Inc., Japan Scottish Widows Investment Partnership, UK Universities Superannuation Scheme (USS), UK Monte Paschi Asset Management S.G.R. – Second Swedish National Pension Fund (AP2), S.p.A, Italy Sweden Vancity Group of Companies, Canada Morgan Stanley Investment Management, USA Service Employees International Union, USA Vermont State Treasurer, USA Morley Fund Management, UK Shinkin Asset Management Co., Ltd, Japan VicSuper Proprietary Limited, Australia Münchner Kapitalanlage AG, Germany Siemens Kapitalanlagegesellschaft mbH, Walden Asset Management, a division of Boston Germany Trust and Investment Management Company, Munich Re, Germany USA SNS Asset Management, Netherlands Natexis Banques Populaires, France Warburg-Henderson Kapitalanlagegesellschaft Social Awareness Investment, ClearBridge National Australia Bank Limited, Australia mbH, Germany Advisors, a unit of Legg Mason Inc., USA Nedbank, South Africa WestLB Asset Management (WestAM), Societe Generale Asset Management UK Germany Neuberger Berman, USA Limited, UK Zurich Cantonal Bank, Switzerland New York City Employees Retirement System, Societe Generale Group, France USA Sogeposte, Finland New York City Teachers Retirement System, USA Sompo Japan Insurance Inc., Japan New York State Common Retirement Fund, USA

29 Appendix 5: Companies responses to theCDP4 questionnaire

Appendix 5: Companies’ responses to the CDP4 questionnaire

Key: AQ Answered questionnaire CR Considering response DP Declined to participate IP Information provided NR No response RS Response status

Company name Index RS Company name Index RS Company name Index RS 3i FTSE 100 AQ Bankers Investment Trust Cairn Energy FTSE 100 AQ FTSE 250 AQ – see Henderson Group 888 Holdings (WI) FTSE 250 AQ Caledonia Investments FTSE 250 IP Barclays FTSE 100 AQ Plc Abbot Group FTSE 250 DP Barratt Developments FTSE 250 AQ Candover Investments Aberdeen Asset FTSE 250 NR FTSE 250 AQ Plc Management BBA Group FTSE 250 AQ Capita FTSE 100 AQ Aberforth Smaller Bellway FTSE 250 IP FTSE 250 IP Capital & Regional PLC FTSE 250 NR Companies Benfield Group FTSE 250 NR Carillion PLC FTSE 250 AQ Admiral Group FTSE 250 AQ Berkeley Group Holdings FTSE 250 AQ Carnival FTSE 100 AQ Aegis Group FTSE 250 NR Plc Carpetright FTSE 250 NR AGA Foodservice Group FTSE 250 AQ BG Group FTSE 100 AQ Carphone Warehouse FTSE 250 NR Aggreko FTSE 250 DP BHP Billiton FTSE 100 AQ Catlin Group LD Coms FTSE 250 IP Alfred McAlpine FTSE 250 IP BOC FTSE 100 AQ Body Shop International Cattles FTSE 250 IP Alliance & Leicester FTSE 100 IP FTSE 250 IP – see L’Oreal Centrica FTSE 100 AQ Alliance Trust FTSE 250 NR Bodycote International Charter PLC FTSE 250 IP FTSE 250 IP Alliance Unichem FTSE 100 NR Plc City of London AQ Allied Domecq – see FTSE 100 AQ Boots FTSE 100 AQ Investment Trust Plc – FTSE 250 Pernod Ricard see Henderson Group Bovis Homes Group FTSE 250 IP AMEC FTSE 250 AQ Close Brothers Group FTSE 250 AQ BP FTSE 100 AQ Amlin FTSE 250 DP CLS Holdings FTSE 250 CR BPB – see Saint Gobain FTSE 100 AQ AMVESCAP FTSE 100 AQ Cobham FTSE 250 NR Bradford & Bingley FTSE 250 AQ Anglo American FTSE 100 AQ Brambles Industries FTSE 100 IP Collins Stewart Tullett Plc FTSE 250 NR Aquarius Platinum FTSE 250 IP Brit Insurance Holdings FTSE 250 NR Colt Telecom Group FTSE 250 AQ Arm Holdings FTSE 250 IP British Airways FTSE 100 AQ Compass FTSE 100 AQ Arriva FTSE 250 AQ Computacenter FTSE 250 AQ British American FTSE 100 AQ Ashtead Group FTSE 250 DP Tobacco Cookson Group FTSE 250 NR Associated British Foods FTSE 100 DP British Assets Trust PLC FTSE 250 NR Corus Group FTSE 250 AQ Associated British Ports FTSE 250 AQ British Empire Securities FTSE 250 NR Countrywide PLC FTSE 250 DP AstraZeneca FTSE 100 AQ British Land FTSE 100 AQ Crest Nicholson FTSE 250 AQ Autonomy FTSE 250 NR British Sky Broadcasting FTSE 100 AQ Croda International FTSE 250 AQ Avis Europe FTSE 250 NR Brixton Estate FTSE 250 AQ CSR FTSE 250 DP Aviva FTSE 100 AQ BSS Group FTSE 250 AQ Daily Mail & General Trust FTSE 100 IP AWG FTSE 250 AQ BT Group FTSE 100 AQ Dairy Crest Group FTSE 250 CR BAA FTSE 100 AQ Bunzl FTSE 250 IP Dana Petroleum FTSE 250 NR Babcock International Burberry Group FTSE 250 AQ Davis Service Group Plc FTSE 250 AQ FTSE 250 IP Group Burren Energy FTSE 250 AQ De La Rue FTSE 250 AQ BAE Systems FTSE 100 AQ Cable and Wireless FTSE 100 AQ De Vere Group FTSE 250 NR Balfour Beatty FTSE 250 AQ Cadbury Schweppes FTSE 100 AQ Derwent Valley FTSE 250 NR

30 Appendix 5: Companies responses to theCDP4 questionnaire

Company name Index RS Company name Index RS Company name Index RS Hammerson FTSE 100 IP Diageo FTSE 100 AQ JP Morgan Fleming AQ Dimension Data FTSE 250 NR Hanson FTSE 100 AQ Mercantile Investment FTSE 250 Trust – see JP Morgan JP Dixons FTSE 100 AQ Hays FTSE 250 NR DS Smith PLC FTSE 250 AQ HBOS FTSE 100 AQ Morgan Fleming AQ Overseas Investment FTSE 250 Easyjet PLC FTSE 250 IP Headlam Group FTSE 250 NR Trust – see JP Morgan Edinburgh Investment Helphire Group FTSE 250 NR FTSE 250 NR Kazakhmys PLC FTSE 100 AQ Trust Henderson Group FTSE 250 AQ Kelda FTSE 100 IP Edinburgh US Tracker FTSE 250 NR Hikma Pharmaceuticals FTSE 250 AQ Kensington Group FTSE 250 NR Electra Private Equity Plc FTSE 250 NR Kesa Electricals FTSE 250 NR (Electra Investment Trust) Hiscox FTSE 250 AQ Kier Group FTSE 250 NR Electrocomponents FTSE 250 AQ HMV Group FTSE 250 NR Kingfisher FTSE 100 AQ EMAP FTSE 250 NR Homeserve PLC FTSE 250 NR Ladbrokes FTSE 100 NR EMI Group FTSE 250 AQ HSBC FTSE 100 AQ Enodis FTSE 250 NR Icap PLC FTSE 250 NR Laird Group FTSE 250 NR Enterprise Inns FTSE 100 NR IG Group FTSE 250 AQ Land Securities FTSE 100 AQ Euromoney Institutional IMI Group FTSE 250 AQ Legal and General FTSE 100 AQ FTSE 250 NR Inv. Imperial Chemical Liberty International FTSE 100 AQ FTSE 100 AQ Exel – see Deutsche Post FTSE 100 AQ Industries Lloyds TSB FTSE 100 AQ Expro International Imperial Tobacco FTSE 100 AQ Logica CMG FTSE 250 AQ FTSE 250 NR Group Inchcape FTSE 250 IP London Merchant FTSE 250 AQ F&C Asset Management FTSE 250 AQ Informa PLC FTSE 250 NR Securities F&C Commercial – see FTSE 250 AQ Inmarsat PLC FTSE 250 IP London Stock Exchange FTSE 250 NR F&C Asset Management Insight Foundation IP Lonmin PLC FTSE 250 AQ F&C Investment Trust – AQ Property Trust – see FTSE 250 Luminar FTSE 250 CR see F&C Asset FTSE 250 HBOS Management Man Group plc FTSE 100 AQ InterContinental Hotel FTSE 100 NR Mapeley Ld NPV FTSE 250 DP Fidelity European Values FTSE 250 NR Group Marks and Spencer FTSE 100 AQ Filtrona FTSE 250 DP Intermediate Capital FTSE 250 NR Findel FTSE 250 AQ Group Marshalls PLC FTSE 250 AQ First Choice Holidays FTSE 250 NR International Power PLC FTSE 100 AQ Matalan FTSE 250 NR FirstGroup FTSE 250 AQ Interserve FTSE 250 AQ McCarthy & Stone FTSE 250 DP FKI FTSE 250 DP Intertek Group FTSE 250 NR Meggitt FTSE 250 DP Forth Ports FTSE 250 DP Invensys FTSE 250 NR Merchants Trust FTSE 250 NR

Friends Provident FTSE 100 AQ Invesco Perpetual FTSE 250 NR Merrill Lynch World AQ Gallaher FTSE 100 AQ Investec FTSE 250 NR Mining Trust – see Merrill FTSE 250 Lynch Gcap Media PLC FTSE 250 AQ Isoft Group FTSE 250 IP MFI Furniture Group FTSE 250 AQ George Wimpey PLC FTSE 250 IP ITV FTSE 100 AQ Michael Page GKN FTSE 250 AQ J Sainsbury FTSE 100 AQ FTSE 250 AQ International GlaxoSmithKline FTSE 100 AQ Jardine Lloyd FTSE 250 IP Millennium & Copthorne JD Wetherspoon PLC FTSE 250 NR FTSE 250 NR Go-Ahead Group FTSE 250 AQ Hotels JJB Sports FTSE 250 NR Gondola Holdings PLC FTSE 250 NR Minerva FTSE 250 NR John Laing FTSE 250 DP Grainger Trust FTSE 250 AQ Misys FTSE 250 DP John Wood Group FTSE 250 DP Great Portland FTSE 250 AQ Mitchells & Butlers PLC FTSE 250 NR Greene King PLC FTSE 250 AQ Johnson Matthey Plc FTSE 100 AQ MITIE Group PLC FTSE 250 DP Greggs FTSE 250 DP Johnston Press FTSE 250 AQ Monks Investment Trust FTSE 250 IP Group 4 Securicor FTSE 250 AQ JP Morgan Fleming Cont. AQ PLC European Investment FTSE 250 GUS FTSE 100 AQ Trust – see JP Morgan Morgan Crucible Co PLC FTSE 250 AQ Gyrus Group FTSE 250 NR Morgan Sindall FTSE 250 AQ JP Morgan Fleming Halfords FTSE 250 NR Japanese Investment FTSE 250 AQ Murray Income FTSE 250 NR Halma FTSE 250 DP Trust – see JP Morgan Investment Trust

31 Appendix 5: Companies responses to theCDP4 questionnaire

Company name Index RS Company name Index RS Company name Index RS Murray International RIT Capital Partners FTSE 250 DP Templeton Emerging FTSE 250 NR FTSE 250 NR Market IT Trust Rolls-Royce FTSE 100 AQ Mytravel FTSE 250 NR Rotork FTSE 250 IP Tesco FTSE 100 AQ N Brown Group PLC FTSE 250 NR Royal & Sun Alliance FTSE 100 AQ Tomkins FTSE 250 DP Topps Tiles PLC FTSE 250 AQ National Express FTSE 250 AQ Royal Bank of Scotland FTSE 100 AQ National Grid plc FTSE 100 AQ TR Property Investment SABMiller FTSE 100 AQ FTSE 250 NR Trust Next FTSE 100 AQ Sage FTSE 100 AQ Travis Perkins FTSE 250 AQ Northern Foods FTSE 250 AQ Savills FTSE 250 NR Trinity Mirror FTSE 250 NR Northern Rock FTSE 100 AQ SCI Entertainment Group FTSE 250 NR Tullow Oil FTSE 250 AQ Northgate FTSE 250 AQ Scottish & Newcastle FTSE 100 AQ Ultra Electronic Holdings FTSE 250 IP Northgate Information FTSE 250 AQ Scottish & Southern Solution FTSE 100 AQ Unilever FTSE 100 AQ Energy Northumbrian Water Unite Group FTSE 250 IP FTSE 250 NR Scottish Investment Trust Group FTSE 250 IP PLC United Business Media FTSE 250 AQ Old Mutual FTSE 100 AQ Scottish Mortgage & United Utilities FTSE 100 IP FTSE 250 IP P&O Group FTSE 100 IP Trust Vedanta Resources FTSE 250 NR Paragon Group FTSE 250 NR Scottish Power FTSE 100 AQ Venture Production FTSE 250 IP Partygaming FTSE 100 AQ Second Alliance Trust FTSE 250 NR Victrex FTSE 250 DP Pearson FTSE 100 AQ Serco Group FTSE 250 DP Virgin Mobile Holdings FTSE 250 CR (UK) Pendragon FTSE 250 NR Severn Trent FTSE 100 AQ Viridian Group PLC FTSE 250 IP Pennon Group FTSE 250 IP Shaftesbury FTSE 250 NR Vodafone FTSE 100 AQ Persimmon FTSE 100 AQ Shanks Group FTSE 250 IP VT Group FTSE 250 AQ Petrofac Resources Ltd FTSE 250 AQ Shire Pharmaceuticals FTSE 100 AQ Weir Group FTSE 250 AQ Photo-Me International FTSE 250 NR SIG FTSE 250 NR Wellington Underwriting FTSE 250 NR Pilkington FTSE 250 NR Signet Group FTSE 250 NR WH Smith FTSE 250 AQ Premier Farnell FTSE 250 DP Skyepharma FTSE 250 AQ Whatman FTSE 250 NR Premier Foods PLC FTSE 250 AQ Slough Estates FTSE 250 IP Whitbread PLC FTSE 250 AQ Premier Oil FTSE 250 AQ Smith & Nephew FTSE 100 IP William Hill FTSE 250 IP Provident Financial FTSE 250 AQ Smiths FTSE 100 IP Wilson Bowden FTSE 250 IP Prudential plc FTSE 100 AQ Soco International FTSE 250 NR Wincanton FTSE 250 NR Punch Taverns FTSE 250 NR Spectris FTSE 250 NR PZ Cussons FTSE 250 NR Witan Investment Trust AQ Spirax-Sarco FTSE 250 IP PLC – see Henderson FTSE 250 Quintain Estates & Engineering FTSE 250 CR Group Development Spirent FTSE 250 NR Wm Morrison Randgold Resources Ltd Ran FTSE 100 DP CR SSL International FTSE 250 NR Supermarkets FTSE 250 k St James’s Place FTSE 250 IP Wolseley PLC FTSE 100 AQ Group FTSE 250 DP St.Modwen Properties FTSE 250 IP Wolverhampton & Dudley Rathbone Brothers FTSE 250 AQ FTSE 250 AQ Stagecoach FTSE 250 IP Breweries Reckitt Benckiser FTSE 100 AQ Standard Chartered FTSE 100 AQ Woolworths FTSE 250 NR Redrow Group FTSE 250 NR Stanley Leisure PLC FTSE 250 AQ Workspace Group FTSE 250 AQ Reed Elsevier FTSE 100 AQ SVG Capital plc FTSE 250 DP WPP FTSE 100 AQ Regus Group PLC FTSE 250 NR Tate and Lyle FTSE 100 IP WS Atkins PLC FTSE 250 AQ Renishaw FTSE 250 DP Taylor Nelson Sofres FTSE 250 NR Xstrata FTSE 100 AQ Rentokil Initial FTSE 100 NR Taylor Woodrow FTSE 250 AQ Yell FTSE 100 AQ Resolution FTSE 250 AQ Yule Catto & Co PLC FTSE 250 DP Telent – no longer Reuters FTSE 100 AQ DP included in FTSE 250 FTSE 250 Rexam FTSE 100 AQ Index

RHM PLC FTSE 250 AQ Temple Bar Investment FTSE 250 DP Rio Tinto FTSE 100 AQ Trust

32 acclimatise Acclimatise is the market leader in climate risk management guidance and the development of tools to help businesses adapt. We bridge the gap between the scientific community and the corporate world, reviewing the latest science, providing clear guidance on the potential business and financial impacts of a changing climate. While other companies provide business support on climate change mitigation – advising clients on managing their carbon emissions and energy usage – acclimatise is unique in its focus on adaptation. Acclimatise offers a variety of tools, consultancy packages and risk intelligence products. Our RiskAssessment service provides a structured process that can be integrated into existing business decisions and risk management processes. This is the first step to understanding the risks and opportunities from climate change. Our RiskManagement service builds on the initial risk assessment to identify and appraise risk management options, and helps you develop a climate adaptation strategy or action plan. RiskScreening is our audit and due diligence service. It provides a high-level strategic view of potential risks and has been designed to meet the needs of clients considering mergers and acquisitions, investment decisions and IPOs. Our RiskIntelligence services help build capacity in your organisation and keep you up to date with latest developments. Our personalised RiskRetainer service provides one-to-one access to an acclimatise Director for clients who require dedicated expert advice.

UK Climate Impacts Programme The UK Climate Impacts Programme (UKCIP) helps organisations in the UK to assess how they might be affected by unavoidable climate change, so they can prepare for and adapt to its impacts. Based at the University of Oxford, UKCIP was set up by the Government in 1997 and is funded by the Department for Environment, Food and Rural Affairs (Defra). UKCIP is led by its stakeholders – decision-makers in both private and public sectors – who are beginning to address the adaptation agenda. UKCIP provides climate information, guidance and tools for its stakeholders and also aims to learn from them the practical lessons of adapting to the impacts of climate change. UKCIP has co-ordinated stakeholder-led studies on climate change impacts for all regions of England, for Northern Ireland, Scotland and Wales and also for a number of sectors, including the built environment, biodiversity and health. UKCIP offers a range of free material. This includes: climate change scenarios for the 21st century, a decision-making framework to help organisations manage their activities in the face of the uncertainty of a changing climate, a methodology for costing impacts and adaptations, and the Adaptation Wizard – an interactive online guide to the adaptation process.

acclimatise Acclimatise is a specialist risk management consultancy primarily serving businesses in the infrastructure and property sectors, and those with large, fixed assets. Acclimatise helps clients assess and manage the threats, opportunities and costs of climate variability and climate change. From this base, it also advises pension funds, investors, insurers and law firms on how to manage these risks across their portfolios. John Firth +44 1636 812868 [email protected] www.acclimatise.uk.com

UK Climate Impacts Programme UKCIP was set up and fully funded by Defra in 1997, and is part of the Environmental Change Institute at Oxford University. UKCIP is tasked with helping organisations to assess how they may be affected by climate change, so that they can prepare for its impacts. Chris West +44 1865 285717 [email protected] www.ukcip.org.uk

Carbon Disclosure Project Paul Dickinson Executive Director +44 7958 772 864 [email protected] 57a Farringdon Road London EC1M 3JB United Kingdom www.cdproject.net

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