So this week was another milestone towards the kind of disclosure that we in the financial markets need and will continue to request as we move towards integrating Environmental, Social and Governance (ESG) factors. Yes, i’m referring to the 2010 Carbon Disclosure Project, with a specific Canada 200 report also being launched.
So what are the interesting findings? Well there are many, some good … some less so. I’ll try to summarize some of the key results, the balance of the material can be found on the CDP website.
- In total, 92 Canadian companies responded to the information request, out of 201 requests made (of which the list represents 201 of the largest publicly traded companies by market cap on the TSX at June 30, 2009)
- This represent 73% of combined $C1.1T in market capitalization of the companies that make up the CDP Canada 200 as mentioned above. In 2009, there were 97 respondents which represented 77% of market capitalization.
- The overall response rate this year is 46% which is comparable to the previous four years but is down from the peak of 55% in 2008 and 48% in 2009.
Am I the only one looking at these number listed above and questioning what’s happening? Why are we finding fewer and fewer respondents to such an important filing?
Other key findings were:
More respondents disclose higher level governance arrangements in place in 2010. The governance question was answered by 85 respondents versus 58 last year. More interesting is that 65 respondents disclosed that the Board of Dirctors, a Board Committee or an executive member of the Board is responsible for climate change…up from 46 respondents last year. It’s nice to see that Boards are starting to get the message that ultimately they are responsible.
Another interesting piece of information in this release is somewhat heartening for those of us who consider climate change as offering opportunities as well as risk. This year 81% of respondents reported seeing opportunities arising from regulatory, physical and other factors, outweighing those who see risk by a significant factor (69%).
In addition there was a Canada 200 Carbon Disclosure Leadership Index whose goal was to underline those companies who have taken it upon themselves to offer some of the best disclosure in their questionnaires. The following are those companies who are on this distinquished list:
Arc Energy Trust
BMO Financial Group
National Bank of Canada
Royal Bank of Canada
SNC Lavalin Group
For the last piece of interesting information in this regard, it is in respect to Canada’s positioning on a global basis. Given the aggregated analysis of selected indicators it reveals that Europe dominates the top 10 CDP samples, the USA S&P 500 ranks 12th and Canada ranks 17th overall. Obviously lots of room for improvement by our public corporations.
In addition Canada’s relative ranking to peer countries hasn’t changed much, however in some areas we are showing weak performance, in particular: the percentage of respondents with emission reductions plans and those who externally verify their emissions data. The later is an obvious topic of interests for those of us who increasingly use the publically available data for calculating our financial models. This is a sure way for Canadian companies to begin to show some further leadership. I look forward to reading that report one day soon.
Here’s the link to the report: http://www.cdproject.net