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March 11, 2011
Top Consumer Brands Lag on Climate Change
    by Robert Kropp

A report by EIRIS analyzes the climate change performance of the world's top 100 brands and finds that most are failing to adequately address risks.

In its third annual report on the performance in addressing climate change of the world's 300 largest FTSE-listed companies, EIRIS introduced a perspective that at least implicitly recognizes that consumers are among the key stakeholders whose concerns should be considered by corporations.

The 2011 Climate Change Tracker report applies EIRIS's traditional methodology—in which it focuses on the areas of corporate governance, strategy, disclosure, and performance—to an analysis of the world's top 100 brands, as identified by Interbrand in its report entitled Best Global Brands 2010.

According to EIRIS, the key findings of its analysis of the brands included in Interbrand's report are sobering. "None of the world's leading brands listed on the Interbrand Top 100 is, at present, showing leadership on climate change," the report states. Furthermore, it continues, "Most (69%) brands are failing to adequately address climate change and are therefore not managing the associated risks to their brand value."

The research conducted by EIRIS identified 42 of the top 100 brands as having a significant climate change impact. Of the 42 companies, only 31% received an assessment of good from EIRIS. The percentage is roughly equal to that of the 300 companies analyzed by EIRIS; according to the report, a significant factor in the year-to-year progress in climate change response "has been efforts by companies to minimize the impact of expected stricter rules and regulations worldwide in the near future."

Among the brands analyzed in the report, Gillette, owned by Proctor and Gamble, finished first. According to the report, the company has established "long-term targets on emissions reduction," and has displayed "strong reporting against those targets."

On the other hand, Porsche, when compared to the other automobile manufacturers in the Interbrand Top 100, does not publish emissions data or performance trends. Neither does it publish emissions reduction targets related to the climate change impacts of its products, as its competitors do.

Concluding that "companies' management of their climate change risk has continued to improve year-on-year," EIRIS also found that "Excellence in climate change management has generally not yet been identified by companies as a brand enhancer."

The report recommends that investors "engage with companies around linking remuneration to climate change mitigation, long-term targets and quantitative risk identification," in order to prevent "long-term damage to the profitability of their investment."


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