Corporate Eye

Carbon Disclosure CDP6 : Will The US Lead The Green Economy?

An analysis of the USA’s CDP6 figures against UK and World figures, drawing some worrying conclusions for the future of the US economy.


Boy, but are these amateurs boring. They come up to you and ask “what do you do?”; you reply “I’m a businessman”. They nod wisely and try to engage you in conversations about making money and sacking staff.

Business is about so much more. A surprising amount of it is about softer stuff such as networking; finding and building mutually beneficial relationships.

But the bottom line is, to coin a phrase, money. And the greatest expense is, usually, staff. So although it’s boring to face these two aspects, they are in fact fundamentally important to your business and its success.

So it is with sustainability. I get really fed up with people who go “Oh .. Emissions!” or want to discuss the latest whizz bang widget for calculating their carbon footprint.

But they do, in fact, have a point. Probably quite rightly, carbon emissions are at the vanguard of efforts to build a sustainable economy and they deserve to be looked at in close detail once in a while.

This is where the Carbon Disclosure Project comes in.

Carbon Disclosure Without Government Regulation

Post Kyoto it was obvious someone needed to take the lead in prompting companies to do something about their carbon emissions. Governments were too unwieldy and too “biased” because of their role as regulators.

So the Carbon Disclosure Project (CDP) was born. It bypassed the governments completely, writing directly to leading corporations throughout the world and asking them to disclose their carbon consumption.

By using the Greenhouse Gas Protocol and ISO 14064/1, CDP has ensured that its form of measurement is internationally recognised. This eliminates the most common issue with emissions measurement: which ruler to use.

Now in its sixth year, the project has just released three reports about the response to its latest survey (CDP6) from members of the FTSE350, Standard & Poor’s 500 (S&P500) and Global 500 (G500). They make instructive reading.

Which Companies Care About Carbon Disclosure?

The first figure to attract my attention is that of the number of companies who answered the CDP 6 questionnaire.

77% of both the Global 500 and the FTSE350 engaged with the project, however only 56% of the S&P500 answered the questionnaire.

Similar lacklustre figures are revealed by which carbon intensive sectors are engaging with the project. Over 40% of respondents in both the G500 44% and the FTSE350 came from Manufacturing or Oil & Gas. For the S&P500 this figure was only 16%.

These are awful statistics. During the current presidential election both candidates have made eco-friendly speeches. The voters and media are lapping it up, but it would appear corporate America has other things on its mind.

To bring the size of any future struggle home, it’s worth bearing in mind that 30% of the G500 are US based, while only 6% are UK based. Yet UK companies seem to be swimming with the global tide and US companies decidedly against.

Carbon Disclosure Improvements

None of which should take away from the enormous impact the CDP has had and continues to have.

When it was launched in 2002 only 40% of the G500 reported their emissions. This has now risen to over 75% with the amount of emissions reported doubled.

The only regulatory mechanism to support this has been the EU’s Carbon Trading Mechanism (ETS), which has yet to become stringent enough to effect corporate behaviour by itself.

However the age old 80/20 rule would now appear to apply. It has taken 20% of the CDP’s effort to get 80% of the world’s corporations to begin to disclose their carbon emissions. I fear it will be a long hard slog to get the remaining 20% to report.

Economic and Environmental Trouble for the USA

It’s fashionable to say that green collar jobs will lead the world out of the current environmental crisis. This may be true, but given corporate America’s disinterest in the one core issue which everyone understands — carbon emissions — it’s difficult to see the country leading the way.

Both it and EU would do well to take note of the economic bloc formed by Brazil, Russia, India and China (BRIC) and the proposal for South Africa to join the group.

Although China and India are woeful respondents to CDP6, both have the infrastructure to change the direction of their economies far more quickly than the USA. So, given that much of its economy already deeply in debt to the Chinese, the USA may have already lost it’s chance of being the leader of the green economy.

Food for thought, in anyone’s book.

Picture Credit: “BRIC Leaders” from Wikipedia Commons under Creative Commons Unported License. Kremlin.ru has to be named as the picture’s source.

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A former CTO, Chris has a broad and varied background. He’s been involved with blue chips, consultancies & SMEs across a wide variety of sectors and has worked in Europe, the Middle East and Australia. In 2007 he decided to combine his knowledge of business and IT with his passion for all things sustainable and has been busy writing ever since. However, his greatest ambition remains to brew the perfect cup of coffee.
 
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