Climate change leaders outperform rivals on stockmarket

16th October 2014

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  • Mitigation


Donal Beagan

Companies in the vanguard of taking action to mitigate climate change generate better returns for shareholders than firms that are sluggish in their response, according to an analysis published by the Carbon Disclosure Project (CDP).

The CDP has for the first time compiled a global list of businesses who lead on reducing emissions. The index was requested by 767 investment bodies, which represent more than a third of the world’s invested capital.

The climate performance leaders index (CPLI) contains 187 businesses from around the world, including form the UK, Sainsbury’s, the BT Group, Aviva, Unilever and AstraZeneca.

The CDP commissioned investment advisers ECPI to compare the market performance of the CPLI against both a broad market index, the Bloomberg world index, and that of a global sustainability index, the Dow Jones sustainability world index (DJSWI) between 2010 and 2014.

Over the four-year period, the CPLI gained 37.53%, outperforming the Bloomberg world index, which gained 34.24%, and the DJSWI, which increased by 31.38%.

The ECPI cites the different sectors represented in the indexes as a reason for the variation.

The CPLI contains more companies in the finance and ICT sectors than the other indexes. These sectors have, on average, been quicker to integrate climate change into their core business strategy, the ECPI points out.

The CPLI also had fewer companies from the energy and industrial sectors, many of whom have found it tougher to improve their carbon efficiency, the ECPI says.

Paul Simpson, chief executive officer of CDP, said: “The businesses that have made it onto our first ever global list of climate performance leaders are to be congratulated for their progress; they debunk economic arguments against reducing emissions.

“However, global emissions continue to rise at an alarming rate. Businesses and governments must raise their climate ambition. The data shows that there is neither an excuse nor the time for lethargy.”

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