The world’s largest carbon emitting companies are not doing enough to reduce their impact on the environment, with the 50 largest emitters having increased their emissions since 2009, the Carbon Disclosure Project (CDP) stated in its 2013 Global 500 Climate Change Report released on Thursday.
According to the report, co-written by CDP and professional services firm PwC, the scope 1 and 2 carbon emissions of the 50 highest emitting companies, which primarily operate in the energy, material and utilities sectors, had risen by 1.65% to 2.54-billion metric tons over the past four years.
“This increase is equivalent to adding more than 8.5-million pickup trucks to the streets, or the supply of electricity to 6-million homes for a year,” CDP stated.
It further pointed out that the 50 highest carbon emitters, or 10% of the world’s largest companies, produced 73% of greenhouses gases (GHGs), while the energy, utilities and materials companies, which represented less than a quarter of the Global 500 population, were responsible for 87% of emissions.
The top 50 companies identified in the CDP report included miners Anglo American, BHP Billiton and Rio Tinto and energy companies Total, Royal Dutch Shell and Sasol.
The publication also found that the five highest emitting companies in each of the ten sectors surveyed had seen their emissions increase by an average of 2.3% since 2009.
"Many countries are demonstrating signs of recovery following the global economic downturn. However, clear scientific evidence and increasingly severe weather events are sending strong signals that we must pursue routes to economic prosperity while reducing emissions of GHGs. It is imperative that big emitters improve their performance in this regard and governments provide more incentives to make this happen,” CDP CEO Paul Simpson commented.
He added that while the biggest emitters presented the greatest opportunity for large-scale change, the report identified opportunities for all Global 500 companies to help build resilience to climate and policy shocks by significantly reducing the amount of carbon dioxide they produce each year.
The report further stated that, while 84% of Global 500 companies reported that they had emissions reduction targets in place, with 75% of companies stating that these strategies led to emissions reductions, the increase in scope 1 and 2 emissions for the highest emitters across the Global 500, and in each sector, showed that there was a disparity between companies’ strategies and targets and the reductions that were actually needed to limit global warming.
Meanwhile, companies were also yet to report on the emissions from 47% of the most carbon-intensive activities that they had identified across their value chains.
“This lack of detailed reporting and GHG information from sources relating to company activities, as opposed to those sources owned or directly controlled by them, may lead companies to underestimate their full carbon impact.”
Further, CDP also found that, with the exception of the energy sector, companies reporting monetary rewards linked to energy or emissions reductions were more likely to report decreases in emissions.
Meanwhile, companies that demonstrated a strong commitment to managing their impact on the environment were generating improved financial and environmental results, the report stated.
Analysis of the corporations that were leading in terms of climate progress, as based on CDP’s methodology, which included BMW, Nestlé and Cisco Systems, suggested that they generate superior stock performance.