1 Investing in a Sustainable future: The Opportunity for Ireland CDP Ireland climate change report 2014 ‘On behalf of 767 investors with assets of US$92 trillion’ Programme Sponsors Report Sponsor Ireland partner to CDP and report writer 2 3 Contents 04 Foreword by Paul Simpson 05 Introduction 08 CDP Ireland network initiative 10 Commentary from SEAI 11 Commentary from EPA 12 Corporate perspective 13 CDP global leadership criteria 14 Investor perspective - NTMA 15 CDP Investor members 16 CDP Investor signatures 22 Irish emissions reporting 24 Ireland 2014 responses 28 Building on climate change leadership 28 Appendix I: Ireland responding companies 31 Appendix II: Global responding companies with operation in Ireland 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. 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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’ refers to CDP Worldwide, a United Kingdom company limited by guarantee, registered as a United Kingdom charity number 1122330. © 2014 CDP Worldwide. All rights reserved.* 4 CEO foreword One irrefutable fact is filtering through to companies and investors: the bottom line is at risk from environmental crisis. The global economy has bounced back from crisis and a cautious optimism is beginning to pervade the markets. As we embrace recovery we must remember that greenhouse gas emissions continue to rise and we face steep financial risk if we do not mitigate them. The unprecedented environmental challenges that we There is growing momentum on the policy front with confront today—reducing greenhouse gas emissions, President Obama’s announcement of new federal rules safeguarding water resources and preventing the to limit greenhouse gases in the US. In the EU, some destruction of forests—are also economic problems. 6,000 companies will be required to disclose on specific One irrefutable fact is filtering through to companies environmental, social and governance criteria as part and investors: the bottom line is at risk from of their mainstream reporting to investors. In China environmental crisis. over 20,000 companies will be required to report their greenhouse gas emissions to the government. The impact of climate events on economies around the world has increasingly been splashed across headlines There is a palpable sea change in approach by in the last year, with the worst winter in 30 years companies driven by a growing recognition that suffered by the USA costing billions of dollars. Australia there is a cost associated with the carbon they emit. has experienced its hottest two years on record and Measurement, transparency and accountability the UK has had its wettest winter for hundreds of years drives positive change in the world of business costing the insurance industry over a billion pounds. and investment. Our experience working with over Over three quarters of companies reporting to CDP this 4,500 companies shows the multitude of benefits for year have disclosed a physical risk from climate change. companies that report their environmental impacts, Investing in climate change–related resilience planning unveiling risks and previously unseen opportunities. has become crucial for all corporations. We are standing at a juncture in history. With the Investor engagement on these issues is increasing. prospect of a global climate deal coming from the In the US a record number of shareholder resolutions in United Nations process, governments, cities, the private the 2014 proxy season led 20 international corporations sector and civil society have a great opportunity to take to commit to reduce greenhouse gas emissions or bold actions and build momentum in the run up to the sustainably source palm oil. Paris 2015 meeting. The decisions we make today can lead us to a profitable and secure future. A future that As mainstream investors begin to recognize the real we can all be proud of. value at risk, we are seeing more action from some of the 767 investors who request disclosure through CDP. Paul Simpson The Norwegian pension fund, Norges Bank, with assets Chief Executive Officer, CDP worth over $800 billion, expects companies to show strategies for climate change risk mitigation and water management, and have divested from both timber and palm oil companies that did not meet their standards. 5 Introduction According to the recent Globescan ‘Rate the Raters’ survey, CDP is ranked as the most credible sustainability index ahead of the Dow Jones Sustainability index and the Access to Medicines index. Measurement, transparency and accountability drive positive change in a world of business and investment. On behalf of investors, purchasers and Governments, CDP requests environmental information from companies and cities on the impacts and dependencies they have on the worlds natural resources and their strategies to manage these. Welcome to the CDP Ireland Report 2014 titled, the radical changes required to limit our increase in ‘Investing in a Sustainable Future - The Opportunity global mean temperature to anything like a by the end for Ireland’. I expect that in time, 2014 may be seen as of the century. An increase greater than 3°C will have the tipping point for global political awakening on the profound impact on our way of life. And we are currently issue of climate change. The latest 5th IPCC reports on a trajectory well above this. One of the key solutions have put the scientific debate beyond doubt. The public required to meet our 2°C / 3°C target is the investment and mainstream media seem increasingly to accept the opportunity presented by energy efficiency initiatives. In overwhelming evidence presented by the scientists. his recent presentation on the IPCC Fifth Assessment Report to the EPA’s excellent Climate Change lecture, Dr A growing number of countries are launching initiatives Chris Field Co-chair of WGII highlighted this opportunity. to tackle the issue climate change, frequently for different reasons as the range of climate impacts grows. We have The upcoming talks in Lima and Paris will provide recently seen an historic agreement between China and global leaders with a unique opportunity to address the the US to limit their GHG emissions. While fossil fuels climate change challenge once and for all. However, continue to provide a valuable source of materials, the without decisive political intervention, solutions may burning of any non-renewable material for the sake of ultimately reside with business, and investors. This report generating energy is not something nature will forgive in outlines the approach to sustainability being taken by the long-term while viable alternatives exist. Therefore we businesses and investment organisations in two excellent must increasingly look to renewable sources to foster a contributions from Emma Jane Joyce from the NTMA circular economy. and by Lorcan Dowd of Kingspan. Globally we continue to subsidise the fossil fuel industry Substantial emissions reductions linked to new energy to a greater extent than we do to the renewables investments will play a key role in stabilising global sector. In Ireland, the carbon intensity of our electricity warming growth, including almost $100 billion per annum compared to our EU neighbours is still relatively high. in renewable energy generation. However, this is dwarfed This is despite our increasing investment in renewables, by the estimated annual incremental energy efficiency which in 2013 accounted for over 30% of our electricity investments in transport, buildings and industry production. Laura Burke Director General of the EPA projected to increase to US$ 336 billion. This presents outlines some of the challenges for Ireland in her article a significant opportunity for Ireland. In his article for in this report. this 2014 report, Dr Brian Motherway CEO of the SEAI outlines where some of these opportunities lie. This is a complex challenge. GHG emissions growth between 2000 and 2010 has been larger than in the Brian O’Kennedy previous three decades. The 5th IPCC reports present Managing Director, Clearstream Solutions 6 CDP Ireland foreword Key Facts from the Irish 2014 report.