CDP Climate Change Report 2015 Edition

Written on behalf of 822 investors with US$95 trillion in assets

CDP Report | October 2015

1 Contents

Foreword 3

Global overview 4

2015 Leadership criteria 8

The Climate A List 2015 10

2015 FTSE 350 Climate Disclosure Leadership Index (CDLI) 12

Investor engagement in the UK 13

Profile: BT Group 14

United Kingdom snapshot 16

Profile: SSE 18

Natural Capital 20

Appendix I 24 Investor signatories and members

Appendix II 25 FTSE 350 scores

Appendix III 30 Responding FTSE SmallCap climate change companies

Please note: The selection of analyzed companies in this report is based on market capitalization of regional stock indices whose constituents change over time. Therefore the analyzed companies are not the same in 2010 and 2015 and any trends shown are indicative of the progress of the largest companies in that region as defined by market capitalization. Large emitters may be present in one year and not the other if they dropped out of or entered a stock index. ‘Like for like’ analysis on emissions for sub-set of companies that reported in both 2010 and 2015 is included for clarity. Some dual listed companies are present in more than one regional stock index. Companies referring to a parent company response, those responding after the deadline and self-selected voluntary responding companies are not included in the analysis. For more information about the companies requested to respond to CDP’s climate change program in 2015 please visit:

https://www.cdp.net/Documents/disclosure/2015/Companies-requested-to-respond-CDP-climate-change.pdf

Important Notice

The contents of this report may be used by anyone providing acknowledgement is given to CDP Worldwide (CDP). This does not represent a license to repackage or resell any of the data reported to CDP or the contributing authors and presented in this report. If you intend to repackage or resell any of the contents of this report, you need to obtain express permission from CDP before doing so.

CDP has prepared the data and analysis in this report based on responses to the CDP 2015 information request. No representation or warranty (express or implied) is given by CDP as to the accuracy or completeness of the information and opinions contained in this report. You should not act upon the information contained in this publication without obtaining specific professional advice. To the extent permitted by law, CDP does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this report or for any decision based on it. All information and views expressed herein by CDP are based on their judgment at the time of this report and are subject to change without notice due to economic, political, industry and firm-specific factors. Guest commentaries where included in this report reflect the views of their respective authors; their inclusion is not an endorsement of them.

CDP, their affiliated member firms or companies, or their respective shareholders, members, partners, principals, directors, officers and/or employees, may have a position in the securities of the companies discussed herein. The securities of the companies mentioned in this document may not be eligible for sale in some states or countries, nor suitable for all types of investors; their value and the income they produce may fluctuate and/or be adversely affected by exchange rates.

'CDP Worldwide’ and ‘CDP’ refer to CDP Worldwide, a registered charity number 1122330 and a company limited by guarantee, registered in number 05013650.

© 2015 CDP Worldwide. All rights reserved. 2 Paul Dickinson Executive Chairman CDP

CDP was set up, almost 15 years ago, to serve investors. A small group of 35 institutions, managing US$4 trillion in assets, wanted to see companies reporting reliable, comprehensive information about climate change risks and opportunities.

Since that time, our signatory base has grown Without doubt, decarbonizing the global economy is enormously, to 822 investors with US$95 trillion in an ambitious undertaking, even over many decades. assets. And the corporate world has responded to But the actions that companies are already taking, their requests for this information. More than 5,500 and reporting to CDP, show that corporate leaders companies now disclose to CDP, generating the understand the size of the challenge, and the Decarbonizing the world’s largest database of corporate environmental importance of meeting it. information, covering climate, water and forest-risk global economy We are on the threshold of an economic revolution commodities. is an ambitious that will transform how we think about productive undertaking, even Our investor signatories are not interested in this activity and growth. We are beginning to decouple over many decades… information out of mere curiosity. They believe, as energy use and greenhouse gas emissions from corporate leaders we do, that this vital data offers insights into how GDP, through a process of ‘dematerialization’ – understand the size reporting companies are confronting the central where consumption migrates from physical goods to sustainability challenges of the 21st century. And the electronic products and services. This will create new of the challenge, and data, and this report, shows that companies have assets, multi-billion dollar companies with a fraction of the importance of made considerable progress in recent years – whether the physical footprint of their predecessors. meeting it. We are on by adopting an internal carbon price, investing in Similarly, there is a growing realization that ‘work’ is the threshold of an low-carbon energy, or by setting long-term emissions no longer a place, but increasingly an activity that can reduction targets in line with climate science. economic revolution take place anywhere. And it no longer relies on the that will transform For our signatory investors, insight leads to action. physical, carbon-intensive infrastructure we once built how we think about They use CDP data to help guide investment to support it. productive activity decisions – to protect themselves against the risks In the 19th century we built railway lines across the associated with climate change and resource scarcity, and growth. globe to transport people and goods. Now we need and profit from those companies that are well to create a new form of transportation, in the form of positioned to succeed in a low-carbon economy. broadband. Investment in fixed and mobile broadband This year, in particular, momentum among investors will create advanced networks upon which the has grown strongly. Shareholders have come together communications-driven economy of the 21st century in overwhelming support for climate resolutions at can be built – an economy where opportunity is not leading energy companies BP, Shell and Statoil. There limited by time or geography, and where there are no is ever increasing direct engagement by shareholders limits to growth. to stop the boards of companies from using An economic revolution of this scale will create shareholders’ funds to lobby against government losers as well as winners. Schumpeter’s ‘creative action to tax and regulate greenhouse gasses. This destruction’, applied to the climate challenge, is set activity is vital to protect the public. to transform the global economy. It is only through Many investors are critically assessing the climate the provision of timely, accurate information, such as risk in their portfolios, leading to select divestment that collected by CDP, that investors will be able to from more carbon-intensive energy stocks – or, in properly understand the processes underway. Our some cases, from the entire fossil fuel complex. work has just begun. Leading institutions have joined with us in the Portfolio Decarbonization Coalition, committing to cut the carbon intensity of their investments. This momentum comes at a crucial time, as we look forward to COP21, the pivotal UN climate talks, in Paris in December. A successful Paris agreement would set the world on course for a goal of net zero emissions by the end of this century, providing business and investors with a clear, long- term trajectory against which to plan strategy and investment.

3 Global overview

The case for corporate action on climate change has never been stronger and better understood. With the scientific evidence of manmade climate change becoming ever more incontrovertible, leading companies and their investors increasingly recognize the strategic opportunity presented by the transition to a low-carbon global economy.

Global 2010 2015 Business is already stepping up. The United Nations Environment Programme estimates that existing Analyzed responses 1,799 1,997 collaborative emissions reduction initiatives involving Market cap of analyzed companies US$m* 25,179,776 35,697,470 companies, cities and regions are on course to

Scope 1 5,459 MtCO2e 5,382 MtCO2e deliver the equivalent of 3 gigatons of carbon dioxide reductions by 2020. That’s more than a third of the Scope 2 1,027 MtCO2e 1,301 MtCO2e ‘emissions gap’ between existing government targets Scope 1 like for like: 1306 companies 4,135 MtCO2e 4,425 MtCO2e Scope 2 like for like: 1306 companies 794 MtCO e 887 MtCO e for that year and greenhouse gas emissions levels 2 2 consistent with avoiding dangerous climate change.

And they are acting to seize this opportunity. The Those investors who understand the need to * Market capitalization figures from Bloomberg at 1 January 2010 and 1 January 2015. latest data from companies that this year took part decarbonize the global economy are watching in CDP’s climate change program – as requested particularly closely for evidence that the companies by 822 institutional investors, representing US$95 in which they invest are positioned to transition away trillion in assets – provide evidence that reporting from fossil fuel dependency. companies are taking action and making investments By requesting that companies disclose through CDP, to position themselves for this transition. these investors have helped create the world’s most Growing momentum from the corporate world is comprehensive corporate environmental dataset. coinciding with growing political momentum. Later This data helps guide businesses, investors and this year, the world’s governments will meet in Paris governments to make better-informed decisions to to forge a new international climate agreement. address climate challenges. Whatever the contours of that agreement, business This report offers a global analysis of the current state will be central to implementing the necessary of the corporate response to climate change. For transition to a low-carbon global economy.

1. Improving climate actions Globally 2010 2015 94%

89%

84%

80%

75%

64% 64% 63%

60%

50%

47% 47%

44%

38%

34%

29%

27%

21%

8000 = 940 0= 4700 = 7500 = 6000 = 840 0= 2100 = 5000 = 2700 = 4400 = 4700 = 8900 = 2900 = 6300 = 3800 = 6400 = 3400 = 6400 = Board incentives Engagement Intensity Absolute Active Emissions Scope 1 data Scope 2 data or senior for the with emissions emission emissions data for 2 or independently independently management management policymakers reduction reduction reduction more Scope 3 verified verified responsibility of climate on climate targets targets initiatives categories for climate change issues issues change 4 the first time, CDP compares the existing landscape in 2010. Even more – 50% - have goals to reduce to when the world was last on the verge of a major emissions per unit of output, up from 20% in 2010. climate agreement. By comparing data disclosed We are targeting the full Companies are responding to the ever-more in 2015 with the information provided in 2010, this operational emissions compelling evidence that manmade greenhouse gas report tracks what companies were doing in 2009, for the organisation, emissions are warming the atmosphere. This helps ahead of the ill-fated Copenhagen climate talks at the build the business case for monitoring, measuring including electricity, end of that year. natural gas, diesel and and disclosing around climate change issues. But refrigerant gases used in The findings show considerable progress: with greater corporate engagement with climate change operational buildings and corporate and investor engagement with the climate is at least partly down to influence from increasingly issue; in leading companies’ management of climate concerned investors. fleets. risk; and evidence that corporate action is proving … Amid growing investor concern effective. However, the data also shows that much J Sainsbury Plc Since 2010, there has been a 54% rise in the number more needs to be done if we are to avoid dangerous of institutional investors, from 534 to 822, requesting climate change. disclosure of climate change, energy and emissions Growing corporate engagement on data through CDP. climate change… Investors are also broadening the means by which For the purposes of this 2015 report and analysis, they are encouraging corporate action on emissions. CDP has changed the we focused on responses from 1,997 companies, In recent years, they have launched several other way investors are able to primarily selected by market capitalization through initiatives. understand the impact of regional stock indexes and listings, to compare with climate change in their the equivalent 1,799 companies that submitted For example, a number of institutional investors portfolio... promoting data in 2010. These companies, from 51 countries have come together in the ‘Aiming for A’ coalition awareness of what risks around the world, represent 55% of the market to call on specific major emitters to demonstrate capitalization of listed companies globally. or benefits are embedded good strategic carbon management by attaining (and maintaining) inclusion in CDP’s Climate A List. The data shows significant improvements in into investments. The A List recognizes companies that are leading corporate management of climate change. What was in their actions to reduce emissions and mitigate Anna Kearney leading behavior in 2010 is now standard practice. climate change in the past CDP reporting year. In BNY Mellon For example, governance is improving, with a higher 2015, following a period of engagement with the percentage of companies allocating responsibility for companies, the coalition was successful in passing climate issues to the board or to senior management shareholder resolutions calling for improved climate (from 80% to 94% of respondents). And more disclosure at the annual meetings of BP, Shell and companies are incentivizing employees through Statoil, with nearly 100% of the votes in each case. financial and non-financial means to manage climate issues (47% to 75%). Investors are also applying principles of transparency and exposure to themselves. More than 60 Importantly, the percentage of companies setting institutional investors have signed the Montréal targets to reduce emissions has also grown strongly. Carbon Pledge, under which they commit to Forty four per cent now set goals to reduce their measure and publicly disclose the carbon footprint of total greenhouse gas emissions, up from just 27%

2. 2010 performance bands 3. 2015 performance bands 4. Disclosure scores over time Globally globally* globally

100

80

60

40

20

A - 72 D - 69 A - 113 C - 462 0 7B - 335 No Band +2633628+A6A minus - 79 D - 406 +4262421+10+9A - 328 2010 2015 C - 411 B - 518 E - 207 Lowest Average Highest

* in 2010 and 2015 not all companies were scored for performance No band 5 - 181 their investment portfolios on an annual basis. It aims Good progress – but it needs to accelerate to attract commitment from portfolios totaling US$3 Companies disclosing through CDP’s climate We have a public trillion in time for the Paris climate talks. change program have made substantial progress in understanding, managing and beginning to reduce commitment to meet Investors are seeking to better understand the their climate change impacts. However, if dangerous 100% of electricity link between lower carbon emissions and financial climate change is to be avoided, emissions need to performance, including through the use of innovative requirements through fall significantly. renewables by fiscal 2018 investor products such as CDP’s sector research, and we will be investing launched this year, which directly links environmental Governments have committed to hold global in about 200 MW of solar impacts to the bottom line. Some investors are taking warming to less than 2°C above pre-industrial levels. the next logical step, and are working to shrink their The Intergovernmental Panel on Climate Change PV plants. carbon footprints via the Portfolio Decarbonization calculates that to do this, global emissions need to Infosys Coalition (PDC). As of August, the PDC – of which fall between 41% and 72% by 2050. Although more CDP is one the founding members – was overseeing companies are setting emissions targets, few of them the decarbonization of US$50 billion of assets under are in line with this goal. In most cases, targets are management by its 14 members. neither deep enough nor sufficiently long term. Leading to effective corporate action More than half (51%) of absolute emissions targets Companies are responding to these signals. In total, adopted by the reporting sample extend only to 2014 Google uses carbon companies disclosed 8,335 projects or initiatives to or 2015. Two fifths (42%) run to 2020 but only 6% prices as part of our reduce emissions in 2015, up from 7,285 in 2011 extend beyond that date. The figures for intensity (the year for which the data allows for the most targets are almost identical. This caution in target risk assessment model. accurate comparison). The three most frequently setting is likely the result of the uncertain policy For example, the risk undertaken types of project are: improving energy environment: many companies will be awaiting the assessment at individual efficiency in buildings and processes; installing outcome of the Paris climate talks before committing data centers also or building low carbon energy generators; and to longer-term targets. changing behavior, such as introducing cycle to work includes using a shadow However, a number of big emitters – such as utilities schemes, recycling programs and shared transport. price for carbon to Iberdrola, Enel and NRG – have established long- estimate expected future More than a third (36%) of reporting companies term, ambitious emissions targets that are in line with energy costs. have switched to renewable energy to reduce climate science. These companies recognize that their emissions. On average, the companies that there is a business case for taking on such targets Google purchased renewable energy in 2015 have doubled and setting a clear strategic direction, including the number of activities they have in place to reduce encouraging innovation, identifying new markets and their emissions, showing their growing understanding building long-term resilience. Many other companies or capacity to realize the benefits of lower carbon have pledged to do so through the We Mean business. Further, 71% (1,425) of respondents are Business ‘Commit to Action’ initiative. employing energy efficiency measures to cut their CDP aims to work along a number of fronts to help emissions, compared with 62% (1,185) in 2011, other companies, especially in high-emitting sectors, demonstrating that companies are committed to join them. With its partners, CDP has developed reducing wasted energy wherever possible. a sector-based approach to help companies set Companies are also quietly preparing for a world with climate science-based emissions reduction targets. constraints – and a price – on carbon emissions. In The Science Based Targets initiative uses the 2°C the past year particularly, we have seen a significant scenario developed by the International Energy jump in the number of companies attributing a cost Agency. to each ton of carbon dioxide they emit, to help guide Looking forward, CDP will encourage more ambitious their investment decisions. This year 4352 companies target setting through our performance scoring, disclosed using an internal price on carbon, a near by giving particular recognition to science-based tripling of the 150 companies in 2014. Meanwhile, an targets. We are planning gradual changes to our additional 582 companies say they expect to be using scoring methodology that will reward companies that an internal price on carbon in the next two years. are transitioning towards renewable energy sources However, these efforts have not proved sufficient to at pace and scale. adequately constrain emissions growth. On a like- In addition, CDP is working with high-emitting for-like basis, direct (‘Scope 1’) emissions from the industries to develop sector-specific climate change companies analyzed for this report grew 7% between questionnaires and scoring methodologies, to ensure 2010 and 2015. Scope 2 emissions, associated with that disclosure to CDP, and the actions required to purchased electricity, grew 11%. There are many show leading performance, are appropriate for each The numbers for companies using or planning factors that might explain this, not least economic to implement internal carbon pricing are based sector. In 2015, we piloted a sector-specific climate growth but this rise in emissions is also considerably on the sample analyzed for Putting a price on change questionnaire and scoring methodology risk:Carbon pricing in the corporate world. Of lower than would have been the case without the the 1,997 companies analyzed in this report 315 privately with selected oil and gas companies, ahead investments made by responding companies in have disclosed that they set an internal carbon of their intended implementation in 2016. price, with 263 planning to do so. For more emissions reduction activities. detail, see https://www.cdp.net/CDPResults/ carbon-pricing-in-the-corporate-world.pdf 6 And business needs a seat at the table in Paris Conclusion The Paris climate agreement will, we hope, provide The direction of travel is clear: the world will need to vital encouragement to what is a multi-decade rapidly reduce emissions to prevent the worst effects The climate effort to bring greenhouse gas emissions under of climate change. And the political will is building to negotiations in Paris control. It will hopefully give private sector emitters undertake those reductions. The majority of those at the end of the year the confidence to set longer-term emissions reductions will need to be delivered by the corporate present a unique targets aligned with climate change. Companies world – creating both risk and opportunity. and their investors therefore will be, alongside opportunity for CDP and the investors we work with have played a national governments, arguably the most important formative role in building awareness of these risks countries around the participants in ensuring the success of the global and opportunities. Our data has helped build the world to commit to a effort to rein in emissions. prosperous, low carbon business case for emissions reduction and inform Companies that have an opinion on a global climate investment decisions. The corporate world is future. The more deal are overwhelmingly in support: when asked responding with thousands of emissions reduction ambitious the effort, if their board of directors would support a global initiatives and projects. But the data also shows that the higher the rewards climate change agreement to limit warming to below efforts will need to be redoubled, by both companies will be. But Paris is a 2°C, 805 companies said yes, while 111 said no. and their investors, if we are to successfully confront milestone on the road However, a large number of respondents (1,075) the challenge of climate change in the years to come. to a better climate, not stated they have no opinion, and 331 did not answer the grand finale. the question. This suggests either a lack of clarity around the official board position on the issue, or Unilever that many companies are not treating the imminent climate talks with the necessary strategic priority.

A deeper dive into corporate Working towards environmental risk water stewardship

Central to CDP’s mission is communicating the progress CDP has this year introduced the first evaluation and ranking of companies have made in addressing climate change, and corporate water management, using scoring carried out by our highlighting where risk may be unmanaged. To better do so, lead water-scoring partner, South Pole Group. CDP has introduced sector-specific research for investors. The questions in the water disclosure process guide companies This forward-looking research links environmental impacts to comprehensively assess the direct and indirect impacts that directly to the bottom line and directs investors as to how their business has on water resources, and their vulnerability to they can engage with companies to improve environmental water availability and quality. performance. Introducing credible scoring will catalyze further action. It The research flags topical environmental and regulatory issues will illuminate where companies can improve the quality of within particular sectors, relevant to specific companies’ financial the information they report, and their water management performance and valuation, and designed for incorporation performance. Participants will benefit from peer benchmarking into investment decisions. Sectors covered to date include and the sharing of best practice. automotive, electric utilities and chemicals. The research is Water scoring will follow a banded approach, with scores made intended to support engagement with companies, providing public for those companies reaching the top ‘leadership’ band. actionable company-level conclusions. Scoring will raise the visibility of water as a strategic issue within To better equip investors in understanding carbon and climate companies and increase transparency on the efforts they are risk, CDP is also developing further investor tools such as a making to manage water more effectively. carbon footprinting methodology, and is working continuously to Furthermore, scoring will be used to inform business strategies, improve the quality of our data. build supply chain resilience and secure competitive advantage. We hope that keeping score on companies and water will reduce the detrimental impacts that the commercial world has on water resources, ensuring a better future for all.

7 2015 Leadership Criteria

Each year companies that participate in CDP’s climate change program are scored against two parallel assessment schemes: performance and disclosure.

The performance score assesses the level of action, carbon footprint, its climate change strategy and risk as reported by the company, on climate change management processes and outcomes. mitigation, adaptation and transparency. Its intent is The highest scoring companies for performance and/ to highlight positive climate action as demonstrated or disclosure enter the A List (Performance band A) by a company’s CDP response. A high performance and / or the Climate Disclosure Leadership Index score signals that a company is measuring, verifying (CDLI). Public scores are available in CDP reports, and managing its carbon footprint, for example by through Bloomberg terminals, Google Finance and setting and meeting carbon reduction targets and Deutsche Boerse’s website. implementing programs to reduce emissions in both its direct operations and supply chain. In 2015 the climate change scoring methodology was revised to put more emphasis on action and as The disclosure score assesses the completeness a result achieving A is now better aligned with what and quality of a company’s response. Its purpose the current climate change scenario requires. is to provide a summary of the extent to which companies have answered CDP’s questions in a CDP operates a strict conflict of interest policy with structured format. A high disclosure score signals regards to scoring and this can be viewed at that a company provided comprehensive information https://www.cdp.net/Documents/Guidance/2015/ about the measurement and management of its CDP-conflict-of-interest-policy.pdf

What are the A List and CDLI criteria? Communicating progress To enter the A List, a company must: Central to CDP’s mission is communicating the progress companies have made in addressing Make its response public and submit via CDP’s climate change, and highlighting where risk may be Online Response System unmanaged. To better do so, CDP is changing how Attain a performance score greater than 85 our climate performance scoring is presented, and we Score maximum performance points have introduced sector-specific research for investors. on question 12.1a (absolute emissions Banding performance scores performance) for GHG reductions due to emission reduction actions over the past year Starting with water and forests in 2015 and including 4% or above in 2015) climate change and supply chain in 2016, CDP is moving to present scores using an approach Disclose gross global Scope 1 and Scope 2 figures that illustrates companies’ progress towards Score maximum performance points for environmental stewardship. Each reporting company verification of Scope 1 and Scope 2 emissions will be placed in one of the following bands: (having 70% or more of their emissions verified) Disclosure measures the completeness of the Furthermore, CDP reserves the right to exclude company’s response; any company from the A List if there is anything in its response or other publicly available Awareness measures the extent to which the information that calls into question its suitability company has assessed environmental issues, risks for inclusion. CDP is working with RepRisk in and impacts in relation to its business; 2015 to strengthen this background research. Management measures the extent to which the Note: Companies that achieve a performance score high company has implemented actions, policies and enough to warrant inclusion in the A List, but do not meet all of the other A List requirements are classed as strategies to address environmental issues; Performance Band A- but are not included in the A List. Leadership looks for particular steps a company To enter the CDLI, a company must: has taken which represent best practice in the field of Make its response public and submit via CDP’s environmental management. Online Response System We believe that this approach will be clearer and Achieve a disclosure score within the top 10% of easier to understand for companies, investors and the total regional sample population* other stakeholders. Water and forest scores will use

*Note: while it is usually 10%, in some regions the CDLI cut-off this new presentation of banded scores in 2015, may be based on another criteria, please see local reports for while the updated scoring methodology for climate confirmation. The minimum disclosure score needed to achieve a change will be available in February 2016 with results place on the FTSE 350 CDLI in 2015 is 99. in late 2016. 8 The Climate A List 2015

Company Country Company Country

Consumer Discretionary Financials

Best Buy Co., Inc. USA Bank of America USA

BMW AG BNY Mellon USA

Coway Co Ltd South Korea CaixaBank Spain

Fiat Chrysler Automobiles NV Italy Inc. USA

Las Vegas Sands USA Credit Suisse Switzerland

LG Electronics South Korea Dexus Property Group Australia

Melia International SA Spain Foncière des Régions France

NH Group Spain Grupo Financiero Banorte SAB de CV Mexico

Nissan Motor Co., Ltd. Japan Host Hotels & , Inc. USA

Sky UK Limited United Kingdom ING Group

Sony Corporation Japan Intesa Sanpaolo S.p.A Italy

Wyndham Worldwide Corporation USA Investa Office Fund Australia

YOOX SpA Italy Limited South Africa

Kiwi Property Group New Zealand

Consumer Staples Macerich Co. USA

Asahi Group Holdings, Ltd. Japan MAPFRE Spain

Brown-Forman Corporation USA Nedbank Limited South Africa

Diageo Plc United Kingdom Principal Financial Group, Inc. USA

J Sainsbury Plc United Kingdom Raiffeisen Bank International AG Austria

Kesko Corporation Shinhan Financial Group South Korea

L'Oréal France Simon Property Group USA

Nestlé Switzerland Standard Chartered United Kingdom

Philip Morris International USA State Street Corporation USA

SABMiller United Kingdom T.GARANTİ BANKASI A.Ş. Turkey

Suntory Beverage & Food Japan The Hartford Financial Services Group, Inc. USA Unilever plc United Kingdom Health Care

Energy Roche Holding AG Switzerland Galp Energia SGPS SA Portugal

PTT Exploration & Production Public Company Thailand Industrials Limited Abengoa Spain

Carillion United Kingdom

10 Company Country Company Country

CNH Industrial NV United Kingdom Google Inc. USA

CSX Corporation USA Hewlett-Packard USA

Dai Nippon Printing Co., Ltd. Japan Hitachi, Ltd. Japan

Deutsche Bahn AG* Germany Juniper Networks, Inc. USA

Deutsche Post AG Germany LG Innotek South Korea

FERROVIAL Spain Microsoft Corporation USA

Huber + Suhner AG Switzerland Electro-Mechanics Co., Ltd. South Korea

Hyundai E&C South Korea Samsung Electronics South Korea

Kingspan Group PLC Ireland

Kone Oyj Finland Materials

Obrascon Huarte Lain (OHL) Spain BillerudKorsnäs

Pitney Bowes Inc. USA Givaudan SA Switzerland

Raytheon Company USA Harmony Gold Mining Co Ltd* South Africa

Royal BAM Group nv Netherlands International Flavors & Fragrances Inc. USA

Royal Philips Netherlands Kumba Iron Ore South Africa

Samsung C&T South Korea Sealed Air Corp. USA

Samsung Engineering South Korea Symrise AG Germany

Schneider Electric France The Mosaic Company USA

Senior Plc United Kingdom

Shimizu Corporation Japan Telecommunication Services

Siemens AG Germany Belgacom

Stanley Black & Decker, Inc. USA KT Corporation South Korea

United Technologies Corporation USA LG Uplus South Korea Sprint Corporation USA Information Technology Swisscom Switzerland

Accenture Ireland Telefonica Spain

Adobe Systems, Inc. USA Telenor Group

Alcatel - Lucent France

Apple Inc. USA Utilities

Atos SE France ACCIONA S.A. Spain

Autodesk, Inc. USA E.ON SE Germany

Cisco Systems, Inc. USA EDP - Energias de Portugal S.A. Portugal

EMC Corporation USA Entergy Corporation USA Iberdrola SA Spain

*Deutsche Bahn responded through Mittelstand program and is not included in analysis

*Harmony Gold Mining is not part of analysis sample 11 2015 FTSE 350 Climate Disclosure Leadership Index (CDLI)

Consecutive Disclosure Performance years in the Company Country score band FTSE 350 CDLI

Consumer Discretionary plc United Kingdom 99 B 1 Carnival Corporation USA 99 B 1 Marks and Spencer Group plc United Kingdom 99 B 1 TUI Group* United Kingdom 100 A- 8 UBM plc United Kingdom 100 B 1 Consumer Staples British American Tobacco United Kingdom 99 B 1 Coca-Cola HBC AG Switzerland 99 B 2 Diageo Plc United Kingdom 100 A 5 J Sainsbury Plc United Kingdom 100 A 1 Morrison Supermarkets United Kingdom 99 C 1 Reckitt Benckiser United Kingdom 99 A- 7 SABMiller United Kingdom 99 A 1 Sage Group United Kingdom 99 B 1 Tate & Lyle United Kingdom 99 B 1 Unilever plc United Kingdom 100 A 2 Energy Netherlands 99 B 1 Financials United Kingdom 99 B 1 Barclays United Kingdom 99 B 1 Company United Kingdom 100 B 5 Henderson Group United Kingdom 99 B 2 HSBC Holdings plc United Kingdom 100 B 8 Land Securities United Kingdom 99 C 4 Lloyds Banking Group United Kingdom 100 B 1 Stock Exchange United Kingdom 99 B 2 Royal Bank of Scotland Group United Kingdom 99 B 8 Standard Chartered United Kingdom 100 A 4 United Kingdom 99 C 1 Health Care GlaxoSmithKline United Kingdom 100 B 8 Industrials United Kingdom 99 C 1 Rolls-Royce United Kingdom 99 B 1 Group United Kingdom 99 B 6 Materials BHP Billiton United Kingdom 99 B 1 Glencore plc Switzerland 99 C 1 Lonmin United Kingdom 99 B 3 Mondi PLC United Kingdom 99 B 2 Utilities United Kingdom 99 B 8 National Grid United Kingdom 99 B 3 Severn Trent United Kingdom 99 B 1 SSE United Kingdom 100 B 1 * As TUI Travel

12 Engagement by the Church Investors Group improves CDP performance bands

Engagement conducted over the past three years by the Church Investors Group (CIG) has been shown to have helped 32 FTSE 250 companies improve their CDP performance band. Analysis by the University of Edinburgh has revealed that companies contacted by CIG were significantly more likely to improve their CDP performance band than those that were not. These results are significant at a 95% confidence level. Over the duration of the project the engagement targeted FTSE 250 constituent companies, with the exception of those in the Financial Services sector, who had not yet scored a ‘C’ CDP performance band. To enable analysis these companies were split into an ‘engagement group’ and a ‘control group’ with whom the CIG did not engage. On average twice as many companies in the engagement group improved their band. Andrew Adams of CCLA, who conducted the engagement on the CIG’s behalf, concludes: “We’re pleased that these companies are making progress in assessing and mitigating their climate change impact. All companies have a part to play in the transition to a low carbon economy. We believe these results show that, when focussed correctly, investor engagement can and does work”. The academic analysis was conducted for the CIG by Dr Tatiana Rodionova of the University of Edinburgh Business School. For more information about the engagement project and the academic analysis please visit: www.churchinvestorsgroup.org.uk

13 Featured Profile

14 Profile: BT Group, Telecommunication Services

When I think about the future, I see two It determines how, and where we invest. potential paths. One is where humankind From the resources required to have all does nothing. We ignore the climate science our electricity from renewables, to product and don’t change the way we do business. innovations which reduce carbon impact and The second is where we take meaningful energy use. action. It’s clear to businesses like ours which the right path is. But continued investment for any business needs clarity and certainty. A framework I’ve seen the power of technology to connect. of new financial instruments to stimulate And I know, brought to life every day at BT, investment in alternative energy and efficiency the power of communications technology as projects, as well as green bonds, is overdue. a tool to tackle climate change. The fact that And perhaps most importantly, when our ICT solutions have the potential to remove political leaders gather in Paris we need

9.1Gt of CO2 from industrial production means a strong global climate deal which limits we at BT, a world-leading communications temperature rises to 2°C. company, have a huge responsibility. Together, we can create a better world.

Niall Dunne Chief Sustainability Officer BT Group

This profile is collaborative content sponsored by BT Group

15 United Kingdom

UK 2010 2015 UK companies in the FTSE 350 demonstrate considerable improvement in climate management Analyzed responses† 219 (28) 232 (18) and disclosure in the five years since 2010. The Market cap of analyzed companies US$m 2,758,474 3,117,458 percentage initiating emission reduction activities

Scope 1 408.2 MtCO2e 394 MtCO2e in 2015 has risen significantly, to 89% from 47% in 2010. This is coupled with growth in the number of Scope 2 241.5 MtCO2e 121.1 MtCO2e members of the FTSE 350 equity index disclosing to Scope 1 like for like: 170 companies 224.9 MtCO2e 280.8 MtCO2e CDP, which has risen to 232 from 219. Scope 2 like for like: 170 companies 104 MtCO2e 102.1 MtCO2e

† the number in brackets refers to companies that responded after the deadline, or referred to a parent company. They are not included in analysis.

1. 2010 performance bands in 2. 2015 performance bands in 3. Disclosure scores over time in UK UK UK

100

80

60

40

20

A - 13 D - 12 A - 8 C -68 No band - 14 0 6B - 60 No Band - 57 +2834626A3A minus - 2 D - 4131 +1293018+13+6A 2010 2015 C - 74 B - 66 E - 41 Lowest Average Highest

4. Improving climate actions in UK 2010 2015 96% 95%

89%

80%

74%

66% 66%

62%

58%

54%

52%

47%

45%

42%

38%

35%

31%

25%

960 0= 950 0= 520 0= 740 0= 620 0= 800 0= 250 0= 540 0= 310 0= 380 0= 470 0= 890 0= 350 0= 580 0= 450 0= 660 0= 420 0= 660 0= Board Incentives Engagement Intensity Absolute Active Emissions Scope 1 data Scope 2 data or senior for the with emissions emission emissions data for 2 or independently independently management management policymakers reduction reduction reduction more Scope 3 verified verified responsibility of climate on climate targets targets initiatives categories for climate change issues issues change

16 UK companies report 1,090 projects in 2015, up from 832 in 2011 – a 31% rise that compares impressively with an average rise globally of 14%. % Energy efficiency remains the most popular project type: for example, Standard Chartered has We’ve invested over £5 million in generated US$740,000 of financial savings through renewables in the development 42 its energy efficiency investment program. of our main campuses in England and Scotland, which in 2013/14 increase in companies Strong engagement with the climate agenda is likely reporting active to have been supported by the relative stability of accounted for 7% of our energy emissions reductions climate policy in recent years, underpinned by the usage, saving >£800k per year in since 2010 UK’s binding targets under the Climate Change avoided energy costs and worked Act. However, recent signals from the UK indicate a to futureproof our energy supply significant weakening of the government’s political at these key sites, reducing our will to address climate change, which may well be reliance on fossil fuels. The CCHP reflected in corporate climate performance in future. and wind turbine at our Osterley Rather than backtracking on climate policy, the UK site produce 40% of Sky Studio’s needs to redouble its efforts. Although emissions energy, and our new building The for this sample have decreased, those companies Hub is fitted with 753m2 of solar disclosing to CDP in both 2010 and 2015 have panels. been unable to constrain emissions growth, with Scope 1 emissions increasing by an average of Sky UK 24%. Participants have, however, delivered a 1.8% reduction in Scope 2 emissions, as the gradual decarbonization of the UK electricity mix continues. Some leading UK companies are looking beyond short-term policy signals to position themselves for a low-carbon future: Building supplies company Marshalls has committed to reduce emissions by 80% by 2050, while pharmaceuticals giant GlaxoSmithKline has pledged a 100% reduction by that point.

5. Proportion of 2015 companies and Scope 1 & 2 emissions by sector in UK

% of responders

Consumer Discretionary - 18% Financials - 25% IT - 7% Utlities - 3%

Consumer Staples - 8% Healthcare - 4% Materials - 11%

Energy - 4% Industrials - 19% Telecomms - 2%

% of emissions

Consumer Discretionary - 6% Financials - 1% IT - 0% Utlities - 6%

Consumer Staples - 4% Healthcare - 1% Materials - 50%

Energy - 20% Industrials - 12% Telecomms - 1%

17 Featured Profile

18 Profile: SSE, Utilities

SSE is a leading generator of renewable energy and Ireland (8,466MWh) from the most diverse with its heritage in the hydro-electricity revolution range of sources. The result of which is a shift that took place in the North of Scotland some in emphasis of our generational mix, with SSE’s seventy years ago. We were producing power carbon emissions down by 34% in 2014/15. from the plentiful supplies of Scottish rainfall long before anyone understood the imperative to But more needs to be done. A healthy carbon combat climate change. price in the UK would do much to underpin the investment case for low carbon energy. SSE SSE has long been at the forefront of the believes the best way to tackle climate change low carbon energy industry. Seven years of internationally is for a firm agreement in Paris to continuous investment in renewable energy - limit the quantity of carbon emissions worldwide £4bn since 2007 – is paying dividends. Last – and importantly – we need a robust global year (2014/15) SSE produced more renewable mechanism for creating a price for carbon too. electricity than any other company in the UK

Martin Pibworth Managing Director, SSE Wholesale

This profile is collaborative content sponsored by SEE

19 Natural Capital

Accounting for and mitigating natural capital risk through CDP’s forests and water programs offers significant opportunities to companies and investors.

Awareness is rising within the investment community Forests that natural capital degradation can materially impact Addressing deforestation and forest degradation, the bottom line. which account for 15-20% of global greenhouse gas emissions, is critical for tackling dangerous climate Companies participating in CDP’s forests and water change. Global demand for agricultural commodities programs recognize material risks associated with is the primary driver of deforestation, as land is deforestation, forest degradation and worsening cleared to produce soy, and cattle products. water security. The majority of these risks are Alongside timber and pulp, these commodities are expected to impact now or in the next three years. the building blocks of millions of products traded Consequently, more than 600 investors now globally. These in turn are wealth generators which engage over 1,000 companies via CDP regarding feature in the supply chains of countless companies deforestation risks and water security. These across sectors. investors are looking to identify companies that are Water prepared to face the challenges ahead. In 2015 the water crisis rose to the top of the World CDP’s forests and water programs provide the only Economic Forum’s ‘Top Ten Global Risks in Terms global standardized platform for action. Companies of Impact’. It is predicted that by 2030 demand for using CDP benefit from benchmarking, support water will outstrip supply by 40%; there is simply no and advice that leads to enhanced business substitute for water. resilience. Companies that take steps to manage Water stress can limit a company’s growth trajectory these physical, regulatory and reputational risks and impact financials. There are, however, significant find themselves in a position to realize significant opportunities to be had for companies and investors competitive advantage. Meanwhile, investors benefit relating to corporate water stewardship. from deeper understanding, data access and opportunities for value creation. Find out more: cdp.net/forests, Through CDP’s supply chain program, companies www.cdp.net/water, can manage these risks across supply chains. cdp.net/supplychain Procurement teams can now work with CDP to enhance supply chain resilience by engaging their suppliers on water risks.

20 73% of companies disclosing to CDP’s water program report that there are opportunities to be had in pursuing water stewardship

CDP’s water program provides the only global system for disclosing and managing corporate water risk and opportunity information.

The continued development of CDP’s water program is an important milestone in helping investors secure valuable information for their investment process. NBIM ($857 billion in management)

21 90% of companies reporting to CDP’s 2014 forests program recognize CDP’s forests opportunities associated with the sustainable program provides sourcing of forest risk commodities, such as the only unified increased brand value system for and securing the best suppliers. disclosing corporate deforestation risk exposure and management information across the key forest risk commodities.

It is critical for investors to understand how companies are managing risks, and CDP’s forests program is an invaluable tool for facilitating this kind of disclosure... we use CDP for informing investor engagements with companies. Lucia von Reusner, Shareholder Advocate, Green Century Capital Management

22 UK water snapshot UK forests snapshot

The global water report, “Accelerating action”, was The global forests report will be published in December. published on 22 October and is viewable at cdp.net. Here’s a snapshot of what UK companies are doing: Here’s a snapshot of what UK companies are doing: Number of companies that produce/use commodity % reporting commitments on commodity

have board-level % responsibility for % water (compared to 20 50 91 68% globally) Cattle products 18 56% have targets and % goals in place (compared to 49% Palm oil 59 globally) 15 47%

Soy measure and monitor % the majority of their water aspects (compared to 58% % 47 globally) 27 63 Timber

23 Appendix I Investor signatories and members

1. Investor signatories by CDP investor initiatives – backed in 2015 by more than location 822 institutional investors representing in excess of US$95 trillion in assets – give investors access to a global source of year-on-year information that supports long-term objective analysis.

This includes evidence and insight into companies’ greenhouse gas emissions, water usage and Investor members strategies for managing climate change, water ABRAPP - Associação Brasileira das Entidades Fechadas de and deforestation risks. Investor members have Previdência Complementar additional access to data tools and analysis. AEGON N.V. Allianz Global Investors to become a member visit: ATP Group https://www.cdp.net/en-US/Programmes/ Aviva Investors AXA Group Pages/what-is-membership.aspx Bank of America Merrill Lynch 45- 383 = 46% +27982A To view the full list of investor signatories Bendigo & Adelaide Bank Limited BlackRock - 220 = 26% please visit: https://www.cdp.net/en-US/Programmes/ Boston Common Asset Management, LLC & BP Investment Management Limited - 75 = 9% Pages/Sig-Investor-List.aspx California Public Employees' Retirement System Asia California State Teachers' Retirement System - 78 = 9% Calvert Investment Management, Inc. Australia and NZ Capricorn Investment Group, LLC - 67 = 8% Catholic Super Africa CCLA Investment Management Ltd ClearBridge Investments - 16 = 2% DEXUS Property Group Environment Agency Pension fund Etica SGR 2. Investor signatories Eurizon Capital SGR by type Fachesf FAPES 95 Fundação Itaú Unibanco 3. Investor signatories over time 92 Generation Investment Management Goldman Sachs Asset Management 87 Henderson Global Investors Number of signatories HSBC Holdings plc 822 Infraprev 78 KeyCorp

Assets under management 767 KLP Legg Mason Global Asset Management

US$trillion 722 71 London Pensions Fund Authority Maine Public Employees Retirement System 64 Morgan Stanley 655 National Australia Bank Limited NEI Investments 57 55 Neuberger Berman New York State Common Retirement Fund 551

534 Nordea Investment Management Norges Bank Investment Management

475 Overlook Investments Limited Asset Managers 41 44+282053A PFA Pension - 364 = 44% Previ

Asset Owners 385 Real Grandeza - 252 = 30% 31 Robeco Banks RobecoSAM AG - 162 = 19%

315 Rockefeller Asset Management, Sustainability & Impact Investing 21 Group - 37 = 5% Royal Bank of Others Sampension KP Livsforsikring A/S - 19 = 2% 225 Schroders 10 SEB AB

155 Sompo Japan Nipponkoa Holdings, Inc 4.5 Sustainable Insight Capital Management 95 TD Asset Management Terra Alpha Investments LLC 35 The Wellcome Trust UBS University of California 24 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Appendix II FTSE 350 scores

2015 2014 2015 2015 Climate Climate Forests Water Company Country Change Change response response score score status status AQ Answered questionnaire Consumer Discretionary AQ(L) Answered Barratt Developments plc United Kingdom 99 B 94 B NR DP questionnaire late Plc United Kingdom 91 D 81 C AQ (therefore climate Bovis Homes Group United Kingdom 74 D 59 D change response Burberry Group United Kingdom 97 B 91 C AQ NR wasn’t included in Carnival Corporation USA 99 B 75 C NR AQ analysis or scored) Compass United Kingdom 97 B 90 B AQ AQ DP Declined to PLC United Kingdom 98 B 75 B participate Debenhams United Kingdom 94 C 76 C Dignity United Kingdom 98 C 74 E NR No response Domino's Pizza Group plc United Kingdom 94 C 84 D SA(AQ) See another - refers Enterprise Inns United Kingdom 68 E 59 E to another company Entertainment One Ltd Canada 34 NR response Euromoney Institutional Investor PLC United Kingdom 51 E 47 Bold Companies that GKN United Kingdom 73 D 67 C AQ are in the A-list Greene King United Kingdom 56 E 51 E NR (performance band A) Home Group United Kingdom 95 C 83 B AQ Green Companies that Inchcape United Kingdom 10 DP responded voluntarily Intercontinental Hotels Group United Kingdom 98 B 92 B NR DP (i.e. were not asked JD Sports Fashion United Kingdom 67 E DP to do so by our Kingfisher United Kingdom 98 B 95 A- AQ DP signatory investors) Marks and Spencer Group plc United Kingdom 99 B 79 B AQ DP Merlin Entertainments Group United Kingdom 86 D DP NR Not requested to Millennium & Copthorne Hotels United Kingdom 74 E 64 D NR take part Mitchells & Butlers United Kingdom 64 D DP NR Pink Responded to all N Brown Group Plc United Kingdom 93 C 86 B AQ three programmes Next United Kingdom 96 D 96 B NR DP Pearson United Kingdom 76 C 69 C AQ AQ Persimmon United Kingdom 79 D 65 D NR DP Redrow Homes Ltd United Kingdom 91 C 86 C RELX Group United Kingdom 98 B 96 A AQ AQ United Kingdom 57 E 31 AQ Sky UK Limited United Kingdom 97 A 95 A- AQ SuperGroup United Kingdom 75 E 50 E Plc United Kingdom 97 D 88 C NR AQ Ted Baker Plc United Kingdom 93 D 89 C United Kingdom 91 C 84 B AQ TUI Group* United Kingdom 100 A- 100 A- NR NR UBM plc United Kingdom 100 B 88 B NR WH Smith United Kingdom 71 D 62 C NR Whitbread United Kingdom 98 B 75 B NR DP WPP Group United Kingdom 97 B 98 B Consumer Staples A.G. Barr Plc United Kingdom 65 E 59 D Associated British Foods United Kingdom 96 C 89 A AQ AQ British American Tobacco United Kingdom 99 B 91 B NR AQ United Kingdom 91 C 79 B Coca-Cola HBC AG Switzerland 99 B 96 A AQ Cranswick United Kingdom 70 D 68 D Dairy Crest Group United Kingdom 90 C 87 B Diageo Plc United Kingdom 100 A 100 A AQ Group PLC Ireland 90 D 81 C AQ United Kingdom 88 C 77 B Imperial Tobacco Group United Kingdom 98 B 84 C NR AQ J Sainsbury Plc United Kingdom 100 A 94 A AQ NR 25 2015 2014 2015 2015 Climate Climate Forests Water Company Country Change Change response response score score status status

Morrison Supermarkets United Kingdom 99 C 92 A AQ NR PZ Cussons United Kingdom AQ(L) 67 C Reckitt Benckiser United Kingdom 99 A- 100 A- AQ AQ SABMiller United Kingdom 99 A 85 A AQ Tate & Lyle United Kingdom 99 B 91 B AQ(L) Tesco United Kingdom 92 C 87 A- AQ DP Unilever plc United Kingdom 100 A 99 A AQ AQ Energy United Kingdom 93 C 78 B DP BG Group United Kingdom 98 B 94 A- AQ BP United Kingdom 90 B 80 B DP DP United Kingdom 92 D 85 C Hunting United Kingdom 48 52 E Petrofac United Kingdom 92 C 83 B NR Premier Oil United Kingdom 96 D 58 D Royal Dutch Shell Netherlands 99 B 90 B NR DP SOCO International Plc United Kingdom 93 D 75 C United Kingdom 87 D 76 D Wood Group United Kingdom 95 B 93 B Financials 3i Group United Kingdom 94 D 77 C (see 3i Group) Channel Islands SA(AQ) SA(AQ) Aberdeen Asset Management United Kingdom 96 C 87 B Alliance Trust United Kingdom 99 B 89 B Amlin United Kingdom 81 E 64 D Aviva United Kingdom 97 B 94 A (see United Kingdom SA(AQ) SA(AQ) Henderson) Barclays United Kingdom 99 B 92 A- United Kingdom 83 E 68 D United Kingdom 93 C 85 B BlackRock World Mining Trust (see United Kingdom SA(AQ) SA(AQ) BlackRock) BlueCrest AllBlue United Kingdom 48 NR British Empire Securities & General Trust United Kingdom 26 16 plc British Land Company United Kingdom 100 B 99 A- Capital & Counties Properties United Kingdom 94 B 87 B NR Catlin Group Ltd United Kingdom 98 B 86 C Investment Trust (see United Kingdom SA(AQ) SA(AQ) Henderson) CLS Holdings plc United Kingdom 86 E 69 D United Kingdom 92 C 86 C Direct Line Insurance Group United Kingdom 90 C 24 Electra Private Equity United Kingdom 0 0 F&C Commercial Property Trust (see United Kingdom SA(AQ) SA(AQ) Bank of Montreal) Fidelity Special Situations United Kingdom 21 SA(AQ) United Kingdom 29 36 Foreign & Colonial Investment Trust Plc United Kingdom SA(AQ) SA(AQ) (see Bank of Montreal) Friends Life (see Aviva) United Kingdom SA(AQ) 81 B United Kingdom 93 C 88 C United Kingdom 98 C 87 B United Kingdom 77 C 66 C Henderson Group United Kingdom 99 B 97 A United Kingdom 97 C 90 C 26 2015 2014 2015 2015 Climate Climate Forests Water Company Country Change Change response response score score status status

HSBC Holdings plc United Kingdom 100 B 97 A International Personal Finance United Kingdom 77 E 83 C Properties plc United Kingdom 90 C 82 C Investec plc (see Investec Limited) United Kingdom SA(AQ) SA(AQ) Jardine Lloyd Thompson Group Plc (JLT) United Kingdom AQ(L) AQ(L) John Laing Infrastructure Fund Guernsey 88 E 71 D JPMorgan American IT (see JPMorgan United Kingdom SA(AQ) SA(AQ) Chase & Co.) JPMorgan Emerging Markets Investment United Kingdom SA(AQ) SA(AQ) Trust (see JPMorgan Chase & Co.) United Kingdom 95 B 80 C Just Retirement Group United Kingdom 85 E New for 2015 Bermuda 90 D 74 D Land Securities United Kingdom 99 C 96 A- Corporation p.l.c. United Kingdom 29 26 Legal and General Investment United Kingdom 88 C 78 C Management Lloyds Banking Group United Kingdom 100 B 98 B United Kingdom 99 B 96 B Mercantile Investment Trust (see United Kingdom SA(AQ) SA(AQ) JPMorgan Chase & Co.) PLC United Kingdom 75 E 1 Old Mutual Group United Kingdom 97 B 98 B Partnership Assurance Group plc United Kingdom 66 D NR Perpetual Income & Growth Investment United Kingdom SA(AQ) SA(AQ) Trust (see Ltd) Provident Financial plc United Kingdom 95 D 91 C Prudential PLC United Kingdom 97 B 97 B plc United Kingdom 90 E 78 D Redefine International Plc (see Redefine South Africa SA(AQ) SA(AQ) Properties Ltd) Royal Bank of Scotland Group United Kingdom 99 B 98 B RSA Insurance Group United Kingdom 87 D 92 B Saga United Kingdom 84 D New for 2015 United Kingdom 84 C 93 C Schroders United Kingdom 96 D 91 B Scottish Mortgage Investment Trust Plc United Kingdom 0 1 United Kingdom 87 C 84 C Shaftesbury United Kingdom 94 C 87 B St. Modwen Properties United Kingdom 79 E 62 D St.James Place United Kingdom 97 C 90 C Standard Chartered United Kingdom 100 A 99 A Standard Life United Kingdom 96 B 95 B Templeton Emerging Markets IT (see United Kingdom SA(AQ) SA(AQ) Franklin Resources, Inc.) TR Property Investment Trust (see Bank United Kingdom SA(AQ) SA(AQ) of Montreal) Unite Students United Kingdom 99 C 86 B United Kingdom 98 B 86 B Health Care AstraZeneca United Kingdom 97 B 93 A AQ BTG United Kingdom 81 D 76 D GlaxoSmithKline United Kingdom 100 B 96 B AQ Hikma Pharmaceuticals United Kingdom 90 B 82 B DP Shire Ireland 91 B 91 B AQ Smith & Nephew United Kingdom 98 C 95 B DP United Kingdom 90 D New for 2015 Synergy Health United Kingdom 84 E 75 C 27 2015 2014 2015 2015 Climate Climate Forests Water Company Country Change Change response response score score status status

UDG Healthcare PLC Ireland 82 D 75 D Industrials United Kingdom 58 E 26 United Kingdom 34 36 DP United Kingdom 93 B 81 B BAE Systems United Kingdom 88 D 77 C DP United Kingdom 97 B 94 A BBA Aviation United Kingdom 78 E 46 Berendsen plc United Kingdom 69 C 70 C plc United Kingdom 43 30 Bunzl plc United Kingdom 92 C 90 B NR DP United Kingdom 98 A 99 A NR United Kingdom 97 B 92 A DP DCC PLC Ireland 88 E 89 C NR United Kingdom 47 DP easyJet United Kingdom 36 34 NR Experian Group Ireland 94 C 76 B FirstGroup Plc United Kingdom 96 C 86 B G4S Plc United Kingdom 94 B 89 B Plc United Kingdom 98 B 79 B Go-Ahead Group United Kingdom 96 C 84 B Hays United Kingdom 74 C 78 C IMI plc United Kingdom 83 D 83 B NR International Consolidated Group, S.A. Spain 96 C 95 B NR Plc United Kingdom 96 B 88 B Intertek Group United Kingdom AQ(L) 86 D Kier Group United Kingdom 99 C 89 C United Kingdom 81 D 72 C AQ Group United Kingdom 79 D 72 D Morgan Advanced Materials United Kingdom 97 B 97 B Group Plc United Kingdom 95 C 85 B Northgate Plc United Kingdom 75 E DP QinetiQ Group United Kingdom 87 C 71 C Regus Group United Kingdom 87 D 86 B Rolls-Royce United Kingdom 99 B 89 B DP PLC United Kingdom 96 D 66 D AQ Royal Mail Group United Kingdom 98 B 91 A- Senior Plc United Kingdom 97 A 67 C Serco Group United Kingdom 99 B 97 B SIG United Kingdom 95 C 73 B Smiths Group United Kingdom 71 D 66 C DP Spirax-Sarco Engineering United Kingdom 92 C 82 D Stagecoach Group United Kingdom 94 C 81 C United Kingdom 98 B 88 B AQ AQ Weir Group United Kingdom 92 C 90 C DP Wolseley plc United Kingdom 96 C 85 B NR DP Information Technology ARM Holdings United Kingdom 93 C 82 C AQ Aveva Group United Kingdom 82 E NR Plc United Kingdom 54 D 45 Domino Printing Sciences United Kingdom 87 C 81 B United Kingdom 98 B 92 B Halma United Kingdom 93 C 85 C Just Eat United Kingdom AQ(L) New for 2015 28 2015 2014 2015 2015 Climate Climate Forests Water Company Country Change Change response response score score status status

Laird Plc United Kingdom 91 C 87 C International United Kingdom 70 E 49 Plc United Kingdom 90 C 75 D Pace Plc United Kingdom 97 B 94 B Premier Farnell United Kingdom 96 C 85 B Renishaw United Kingdom 83 C 79 C Sage Group United Kingdom 80 E 68 D United Kingdom 98 B 89 B Telecity Group United Kingdom 88 E 39 Zoopla Property Group United Kingdom 80 E New for 2015 Materials Acacia Mining United Kingdom 61 E SA(AQ) DP Anglo American United Kingdom 96 B 95 B AQ Antofagasta United Kingdom 98 D 93 C AQ BHP Billiton United Kingdom 99 B 87 B AQ CRH Plc Ireland 95 C 71 B AQ Croda International United Kingdom 96 B 76 B AQ AQ DS Smith Plc United Kingdom 94 C 85 C AQ AQ United Kingdom 90 B 89 B United Kingdom 60 E 55 E Evraz PLC United Kingdom 69 E 62 E Fresnillo plc Mexico 93 C 74 C AQ Glencore plc Switzerland 99 C 92 B NR AQ Johnson Matthey United Kingdom 95 B 98 A AQ KAZ Minerals United Kingdom 82 D 76 D DP Lonmin United Kingdom 99 B 96 B AQ Mondi PLC United Kingdom 99 B 96 B AQ AQ Petra Diamonds Ltd United Kingdom 89 C 79 D Polymetal 84 E NR Randgold Resources United Kingdom 90 C 64 C NR Rexam United Kingdom 95 D 83 C AQ United Kingdom 97 B 87 B AQ(L) RPC Group Plc United Kingdom 88 C 77 B plc United Kingdom 87 C 75 D AQ Vedanta Resources PLC United Kingdom 98 C 75 C Plc United Kingdom 84 D 73 D Telecommunication Services BT Group United Kingdom 98 B 97 A Colt Technology Services United Kingdom 71 D 66 C Inmarsat United Kingdom 95 C NR TalkTalk Telecom Group United Kingdom 69 D AQ(L) Vodafone Group United Kingdom 95 D 84 B Utilities Centrica United Kingdom 99 B 100 A AQ Infinis United Kingdom 91 C New for 2015 National Grid United Kingdom 99 B 97 B AQ United Kingdom 97 C 89 B DP Severn Trent United Kingdom 99 B 85 B DP SSE United Kingdom 100 B 94 A NR United Utilities United Kingdom 97 B 99 A- DP * As TUI Travel

29 Appendix III Responding FTSE SmallCap climate change companies

2015 2014 2015 2015 Climate Climate Forests Water Company Country Change Change response response score score status status

Consumer Discretionary Aga Rangemaster Group PLC United Kingdom 95 C 91 C Cambian Group United Kingdom 59 E New for 2015 Chime Communications United Kingdom 57 E NR Darty plc United Kingdom 88 D DP United Kingdom 82 D 54 E ITE Group United Kingdom 88 D 77 D Trinity Mirror United Kingdom 84 E 75 D UTV Media PLC United Kingdom 44 40 Consumer Staples United Kingdom 32 36 McBride plc United Kingdom 74 D 69 C Energy Afren United Kingdom 87 D 77 D JKX Oil and Gas United Kingdom 83 E 71 E United Arab Lamprell Plc Emirates 87 E 38 Financials Arrow Global Group United Kingdom 11 NR Baillie Japan Trust Plc United Kingdom 0 0 Baillie Gifford Shin Nippon PLC United Kingdom 0 0 Edinburgh Worldwide Investment Trust plc United Kingdom 0 0 EP Global Opportunities Trust plc United Kingdom 24 NR European Investment Trust Plc United Kingdom 29 NR Fidelity Asian Values Plc United Kingdom 23 SA Fidelity Japanese Values PLC United Kingdom 16 SA United Kingdom 32 SA Helical Bar Plc United Kingdom 86 D 77 D Impax Environmental Markets United Kingdom 71 E 67 D Pacific Horizon Investment Trust United Kingdom 84 E 1 Primary Health Properties United Kingdom 0 NR Quintain Estates & Development PLC United Kingdom 98 C 95 C Scottish American Investment Company Plc United Kingdom 0 1 Health Care United Kingdom 66 E 74 C

30 2015 2014 2015 2015 Climate Climate Forests Water Company Country Change Change response response score score status status

Industrials Alumasc Group United Kingdom 10 DP Brammer Plc United Kingdom 91 C AQ Cape plc United Kingdom AQ(L) DP United Kingdom 30 10 Communisis Plc United Kingdom 92 C NR United Kingdom 94 C 93 B De La Rue United Kingdom 81 C 66 D Dialight United Kingdom 41 NR plc United Kingdom 94 B 97 B Ricardo Plc United Kingdom 75 D 66 D Robert Walters United Kingdom 74 D NR RPS Group Plc United Kingdom 92 C 81 C Severfield United Kingdom 45 64 E Shanks Group United Kingdom 89 E AQ Plc United Kingdom 63 E NR Sthree Plc United Kingdom 74 E 57 E Stobart Group Ltd United Kingdom 84 D 74 D UK Mail Ltd United Kingdom 25 AQ Volex Group United Kingdom 86 E NR Wincanton plc United Kingdom 95 D 83 B XP Power United Kingdom 80 D 60 D Information Technology Phoenix IT Group United Kingdom 70 E NR Communications United Kingdom 95 C 73 D TT Electronics Plc United Kingdom 83 D NR XAAR PLC United Kingdom 77 E NR Materials Aquarius Platinum Bermuda 91 D 82 D AQ British Polythene Industries PLC United Kingdom 72 D 61 D Hill & Smith Holdings United Kingdom 80 E 65 E Marshalls United Kingdom 98 B 98 B Telecommunication Services KCOM United Kingdom 85 E 78 B Utilities Greencoat UK Wind United Kingdom 68 E 55 E

Noteworthy Non-FTSE UK Company: Jaguar Land Rover Ltd. achieved a score of 96 B this year.

31 Appendix IV FTSE 350 non-responders

2015 Climate Change Company Country response status

Consumer Discretionary AO World United Kingdom DP Berkeley Group United Kingdom DP Betfair United Kingdom NR Bwin.Party Digital Entertainment PLC United Kingdom DP Card Factory United Kingdom DP Group United Kingdom NR United Kingdom DP United Kingdom DP Game Digital United Kingdom NR Halfords Group United Kingdom DP Howden Joinery Group Plc United Kingdom NR Informa United Kingdom DP ITV United Kingdom NR Jimmy Choo plc United Kingdom DP Ladbrokes United Kingdom NR Marston's PLC United Kingdom DP Ocado Group United Kingdom DP Group United Kingdom DP Poundland United Kingdom NR Rank Group United Kingdom NR Restaurant Group United Kingdom DP SPIRIT PUB CO PLC United Kingdom DP Sports Direct International United Kingdom DP SSP United Kingdom DP Wetherspoon United Kingdom DP William Hill United Kingdom DP Consumer Staples William Hill United Kingdom DP Energy James Fisher & Sons United Kingdom NR Nostrum Oil & Gas Netherlands NR OPHIR ENERGY PLC United Kingdom DP Financials Aberforth Smaller Companies Trust plc United Kingdom DP Admiral Group United Kingdom DP Allied Minds United Kingdom NR Plc United Kingdom NR Bank of Georgia Holdings United Kingdom NR BH Macro Channel Islands NR Holdings United Kingdom NR Brit plc United Kingdom NR United Kingdom NR United Kingdom NR PLC United Kingdom NR United Kingdom DP Edinburgh Investment Trust United Kingdom NR Group PLC United Kingdom NR Finsbury Growth & Income Trust Plc United Kingdom NR Genesis Emerging Markets Fund United Kingdom NR United Kingdom NR Hargreaves Lansdown United Kingdom DP HICL Infrastructure Co Ltd Channel Islands NR ICAP United Kingdom DP IG Group Holdings United Kingdom NR Intermediate Capital Group United Kingdom DP

32 2015 Climate Change Company Country response status

International Public Partnerships United Kingdom NR IP Group Plc United Kingdom NR Kennedy Wilson Europe United Kingdom NR LondonMetric Property plc United Kingdom NR plc United Kingdom DP Murray International Trust United Kingdom NR NB Global Floating Rate Income Fund United Kingdom DP Paragon Group of Companies United Kingdom NR PLC United Kingdom NR Phoenix Group Holdings United Kingdom DP Polar Capital Technology Trust United Kingdom NR RIT Capital Partners United Kingdom NR Riverstone Energy United Kingdom NR Scottish Investment Trust United Kingdom NR SVG Capital United Kingdom DP Temple Bar Investment Trust United Kingdom DP TSB Banking Group United Kingdom NR Tullett Prebon Group Ltd United Kingdom NR UK Commercial Property Trust United Kingdom NR United Kingdom NR Worldwide Healthcare Trust United Kingdom NR Health Care Al Noor Hospitals Group PLC United Arab Emirates NR United Kingdom DP Genus United Kingdom DP United Kingdom DP NMC Health plc United Arab Emirates DP Health Care Group United Kingdom NR Group United Kingdom DP PLC Ireland NR Hellermanntyton Group United Kingdom DP United Kingdom NR Keller United Kingdom NR Melrose PLC United Kingdom DP Michael Page International United Kingdom DP Paypoint United Kingdom DP Rentokil Initial United Kingdom DP United Kingdom DP United Kingdom NR Information Technology CSR Plc United Kingdom DP Fidessa Group Plc United Kingdom NR Imagination Technologies United Kingdom NR Moneysupermarket.com Group United Kingdom DP United Kingdom DP Materials Alent plc United Kingdom DP plc United Kingdom NR Telecommunication Services Cable & Wireless Communications United Kingdom NR Utilities United Kingdom DP United Kingdom NR

33 CDP Contacts CDP Board of Trustees CDP Advisors Paul Dickinson Chairman: Alan Brown Lord Adair Turner Executive Chairman Wellcome Trust Rear Admiral Neil Morisetti CB Paul Simpson Ben Goldsmith Chief Executive Officer WHEB

Frances Way Chris Page Co-Chief Operating Officer Rockefeller Philanthropy Advisors

Sue Howells James Cameron Co-Chief Operating Officer Overseas Development Institute (ODI) Marcus Norton Chief Partnerships Officer Jeremy Burke Green Investment Bank Daniel Turner Head of Disclosure Jeremy Smith

James Hulse Kate Hampton Head of Investor Initiatives Childrens Investment Fund Foundation James Howard Disclosure, Manager Martin Wise Relationship Capital Partners Rosie Mackenzie Senior Project Officer, Disclosure Takejiro Sueyoshi

Lena Meintrup Tessa Tennant European Project Manager, Forests

Emma Lupton European Account Manager, Water

Jacqueline Felber Senior Support Officer, Disclosure

CDP 3rd Floor, Quadrant House 4 Thomas More Square Thomas More Street London E1W 1YW United Kingdom

Tel: +44 (0)20 3818 3900 www.cdp.net [email protected]

Design and production Global scoring and outsourcing partner 36 www.productionstudios.co.uk