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April 06, 2011
New CDP Initiative Requests that Companies Move Beyond Reporting to Action on Climate Change
    by Robert Kropp

Thirty-four institutional investors partner with CDP Carbon Action to ask companies in FTSE Global Equity Index to demonstrate that they are managing carbon emissions effectively.

A group of 34 institutional investors with $7.6 trillion in assets under management has joined with the Carbon Disclosure Project (CDP) in a new CDP initiative whose aim is to improve the management of greenhouse gas (GHG) emissions by companies.

CDP Carbon Action will send action request letters to the largest companies in the FTSE Global Equity Index Series, asking them to go beyond merely reporting on GHG emissions and demonstrate that they are managing emissions effectively.

The investors are asking recipients of the action letter to set emissions reduction targets, achieve annual emissions reductions, and invest in emissions reduction initiatives. The companies have also been asked to "demonstrate these actions by disclosing them, including any examples of best practice," according to CDP. Companies will report information through the existing 2011 CDP information system.

US-based signatories to the initiative include Boston Common Asset Management and Calvert Asset Management.

Citing a 2009 report from McKinsey & Co., CDP Action stated, "Most companies have options to reduce carbon emissions at negative cost across the overall economy there is the potential to save as much as 12Gt CO2e, 25% of the global total annual emissions in this way by 2030."

Other potentially significant areas of emissions reduction described by McKinsey in its report include implementing low-carbon alternatives to fossil fuels, and increasing carbon sequestration through changing agricultural practices.

Paul Dickinson, executive chairman of CDP, stated, "An economic revolution is needed to decouple financial growth from growth in emissions. Rising oil prices, energy supply risks and brand reputation issues are all making the reduction of carbon a strategic imperative. Carbon Action is about accelerating companies' mitigation efforts in order to reduce the major long-term threat to the global economy which climate change represents."


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