Driving climate resilience through carbon mitigation CDP Canada 200 Climate Change Report 2014 On behalf of 767 investors representing US$92 trillion in assets 02 03 Contents 04 Karen Clarke-Whistler Chief Environment Officer, TD Bank Group 05 Paul Simpson Chief Executive Officer, CDP 06 Executive summary 08 Introduction: New risks emerging 10 Emissions and policy backdrop: Canadian target will not be met 12 CDP disclosure and lagging emissions performance findings 16 Building resilience to climate change 18 GHG mitigation and resilience case studies 20 Responding to increased climate risks with resilience planning 22 Cost of mitigation 24 Resilience best practices: High-level corporate responsibility for climate change strategy 26 Turning resilience into win-wins 27 Resilience, business continuity and risk management 28 Resilience and policy engagement 29 Conclusions 29 Disclosure leaders Climate Disclosure Leadership Index 30 Appendix I Scores, emissions, and company detail by sector 33 Appendix II Non-responding companies 34 Appendix III Other responding companies Important Notice The contents of this report may be used by anyone providing acknowledgement is given to CDP. This does not represent a license to repackage or resell any of the data reported to CDP 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 2014 climate change 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 do 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. Cover photo: Richard S. Warner, A.O.C.A. Flickr CDP North America, Inc, is a not–for-profit organization with 501(c)3 charitable status in the US. July 8, 2013. Thunderstorm approaching Toronto. © 2014 CDP. All rights reserved. 04 05 Karen Clarke-Whistler Paul Simpson Chief Environment Officer, TD Bank Group Chief Executive Officer, CDP Canadian corporations are recognizing the One irrefutable fact is filtering through to benefit of working together. But let’s not kid companies and investors: the bottom line is at ourselves, this is a journey and we have a long risk from environmental crisis. way to go. Let me start by congratulating the companies included Take our approach to facilities—it led us to introduce net The global economy has bounced back from crisis and a cautious on the CDP Canada 200 index for 2014. A record number zero energy branches, install solar panels on more than optimism is beginning to pervade the markets. As we embrace recovery of organizations responded to CDP’s call for information 100 buildings, retrofit lighting and redesign corporate we must remember that greenhouse gas emissions continue to rise on their greenhouse gas emissions and climate change office space among other things. The result? We’ve seen and we face steep financial risk if we do not mitigate them. strategy, which tells us that more than ever, Canadian an 11-percent reduction in carbon emissions from energy, corporations are recognizing the benefit of working and our energy costs are lower. We’re more resilient as together. But let’s not kid ourselves, this is a journey and we’re better able to deal with the energy demands of The unprecedented environmental challenges that we climate change risk mitigation and water management, we have a long way to go. extreme temperatures. confront today—reducing greenhouse gas emissions, and have divested from both timber and palm oil safeguarding water resources and preventing the companies that did not meet their standards. The theme of this year’s report, resilience, is particularly We’ve also learned a huge amount about efficient energy destruction of forests—are also economic problems. apt. The extreme temperatures and a number of very se- use and renewable energy, which has led to business There is growing momentum on the policy front with One irrefutable fact is filtering through to companies vere weather-related incidents—from the floods of Alberta opportunities. In 2013, TD provided $3.3 billion in financing President Obama’s announcement of new federal rules and investors: the bottom line is at risk from to the Toronto ice storm—put people and businesses at to companies with low-carbon operations, including to limit greenhouse gases in the US. In the EU, some environmental crisis. risk, and the financial cost has been enormous. renewable energy, and this year saw us become the first 6,000 companies will be required to disclose on specific financial institution in Canada to issue a green bond—a The impact of climate events on economies around the environmental, social and governance criteria as part As business leaders, we must recognize that extreme tem- $500 million offering dedicated to funding green initiatives, world has increasingly been splashed across headlines of their mainstream reporting to investors. In China peratures and severe weather–related incidents are the re- including low-carbon and renewable energy projects. in the last year, with the worst winter in 30 years suffered over 20,000 companies will be required to report their ality we’ll be operating in for the foreseeable future. There is by the USA costing billions of dollars. Australia has greenhouse gas emissions to the government. broad recognition of the need to shift toward a low-carbon The severe weather of the past year has had a major experienced its hottest two years on record and the UK economy, and more and more organizations are working impact on insurance companies, TD Insurance included. There is a palpable sea change in approach by has had its wettest winter for hundreds of years costing toward this end. But this alone is not enough—we must Building more climate resilience is key—keeping companies driven by a growing recognition that there is a the insurance industry over a billion pounds. Over three also build “resilience” into our business strategy. insurance rates reasonable is in the best interest of both cost associated with the carbon they emit. Measurement, quarters of companies reporting to CDP this year have insurance companies and the public they serve. There transparency and accountability drives positive change What do we mean by resilience? It is, as CDP says, the disclosed a physical risk from climate change. Investing in is much that can be done. TD Insurance, for example, is in the world of business and investment. Our experience ability to prepare for, mitigate and recover from climate climate change–related resilience planning has become a member and sponsor of the Institute for Catastrophic working with over 4,500 companies shows the multitude impacts. Being resilient from a corporate perspective crucial for all corporations. Loss Reduction and is on the board of the Alberta of benefits for companies that report their environmental means thinking long and hard about the potential effects Severe Weather Management Society. It also subscribes Investor engagement on these issues is increasing. impacts, unveiling risks and previously unseen of a changing climate on our businesses and adapting our to a weather service so that it can proactively support In the US a record number of shareholder resolutions in opportunities. infrastructure, policies, processes, products and even the customers before severe weather hits. The insurance the 2014 proxy season led 20 international corporations way we interact with employees and customers to be as We are standing at a juncture in history. With the prospect sector is a front-line example of how companies can to commit to reduce greenhouse gas emissions or resilient as possible. It is a daunting challenge, but one of a global climate deal coming from the United Nations work with individual citizens, helping them understand sustainably source palm oil. that can lead to business opportunities, something that process, governments, cities, the private sector and civil the impacts of severe weather and steps they can take to has become very apparent to TD. As mainstream investors begin to recognize the real society have a great opportunity to take bold actions and build resiliency into their homes and lives. value at risk, we are seeing more action from some of the build momentum in the run up to the Paris 2015 meeting. Back in 2008, when we announced our intention to Building our resilience is vital, and as corporations there 767 investors who request disclosure through CDP. The The decisions we make today can lead us to a profitable be carbon neutral, we made reducing our own carbon is much that we can and must do in terms of our own Norwegian pension fund, Norges Bank, with assets worth and secure future. A future that we can all be proud of. footprint a priority. Carbon reduction, whether through businesses and broader society. $260 billion, expects companies to show strategies for energy-saving measures or the use of renewable energy, has to be a consideration in just about everything we do, The time for action has come. from how we design and operate facilities, to how we use technology and the way our employees work. 1 www.un.org/ climatechange/towards-a- climate-agreement/ 06 07 Executive summary Recent extreme weather events in Canada have brought the importance In this report, we present findings that show: of corporate climate resiliency measures and emissions mitigation to • 44% of Canadian companies have not set the core of business planning.