Global corporations seek greater clarity on carbon regulation

September 22nd, 2008 - 1:45 pm ICT by IANS  

Washington, Sep 22 (IANS) Global corporate biggies are seeking greater transparency on climate change related policy in order to better anticipate the impact of regulations driving carbon markets and carbon prices. Regulatory uncertainty is delaying strategic investment decisions, according to the Carbon Disclosure Project (CDP) annual report. It offers data on greenhouse gas emissions of 1,550 corporate houses and their climate change-related strategies.

CDP is a collaborative effort involving 385 institutional investors managing $57 trillion in assets. Their goal is to better understand through CDP how climate change could affect the profitability of companies in their portfolio.

Despite the uncertainty regarding regulation, a majority of global companies are acting to reduce their emissions. Seventy four percent of them are now reporting emissions reduction targets, showing companies are increasingly taking climate change mitigation seriously.

However, the oil and gas sector - an early adopter of carbon reporting - performed relatively poorly with a response rate of just 69 percent, according to an Eurekalert report.

Carbon disclosure and climate change reporting is becoming critical for investors to fully assess their risks, liabilities and opportunities within their portfolios.

“We can see from 2008 responses to CDP a marked increase in levels of engagement from companies, with more companies reporting than ever before. With increased regulation on the horizon, investors are requiring this information to better understand the creditworthiness of companies in their portfolio and how climate change might affect their profitability,” said Paul Dickinson, CEO of CDP.

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