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The Guardian: Time to come clean

Only four of the world’s 10 largest companies have targets for reducing carbon dioxide. Sally Uren reports

Monday November 6, 2006

The 10 largest companies on the globe come from three sectors: oil, car manufacturing and retail. The oil companies are by far the greatest emitters of carbon dioxide, contributing more than 434m tonnes between them – 89% of the total emissions put out by the big 10. ExxonMobil is the greatest emitter by far. It is responsible for 138m tonnes of carbon dioxide per annum, the same as the emissions from 6m UK households.

In contrast, BP has the lowest emissions of the oil companies on the list at 78m tonnes, and also has the lowest carbon emissions relative to sales: 313 tonnes per $m compared to 420 for Exxon. The emissions of BP are still high, but are notably lower than some others in the sector, perhaps reflecting the company’s stated desire to clean up its act and invest in new technologies and renewable energies.

Among the car manufacturers, General Motors has the highest emissions at 12m tonnes per annum. Toyota, at 6m tonnes, has the lowest in both absolute and relative terms. No surprises then that this is the company responsible for developing the eco-efficient Prius. The statistics show the obvious success of Toyota’s commitment to technological advance. And the current story for General Motors? Its shares continue to fall in the markets.

This data comes with some pretty serious health warnings. First, it is reported voluntarily by the companies themselves, which makes it possible for different companies to measure and report their carbon dioxide emissions in different ways. Second, the data only includes carbon dioxide emissions up to the point of sale. None of the emissions resulting from using cars or consuming petrol are shown in our table.

However, the numbers are a useful start. Responding to climate change is the biggest challenge humanity has ever faced. The work of the Carbon Disclosure Project, which gathers this data, takes us one step closer towards getting an active response from business. And the approach it uses – sending letters to 2,180 global companies, signed by the world’s largest institutional investors, asking for disclosure of information on greenhouse gas emissions – should be seen as a sign of things to come.

Various indices, in addition to the Giving List, exist to give us some insights into how companies are addressing sustainability – the Business in the Community Corporate Responsibility Index, the Dow Jones Sustainability Index, the FTSE – Good to name but a few – but none of these provides full answers to the question of how a company is doing at embedding sustainability into its business activities.

It’s likely, in future, that there will be more interest in information about targets to reduce emissions. Of the 10 companies analysed, only four – BP, Shell, General Motors and Toyota – currently have published targets for reducing carbon dioxide emissions.

These companies are leaders and are setting an excellent example to other global companies. Yet, even here, the reduction targets are small, relative to the threat of climate change. By 2010, BP and Toyota aim for a 10% reduction, General Motors an 8% reduction and Shell a 5% reduction in their total global carbon dioxide emissions. In comparison, the UK government has committed to reduce carbon dioxide levels by 20% before 2010 and has set a 60% target by 2050. At current rates it would take the companies listed a lot longer to achieve the same target – time we haven’t got.

The reported level of investment in sustainable technologies, likewise, is far from meeting the need if business is to make the appropriate response to the threat of climate change. BP comes top, reportedly investing 5.7% of total annual capital investment on sustainable technologies such as renewable energy. ExxonMobil only spends 0.1%. These investments are mainly in technologies to cut carbon emissions at source although BP and Ford are also investing in carbon offsetting.

Paul Simpson, project director at the Carbon Disclosure Project, says investors are expecting to see more from business: “It’s great that more companies are now reporting on their emissions. But investors are now asking for more exact measurements and the targets these companies have in place to reduce their emissions over the short and medium term. Increasingly they’re looking for more accurate, verifiable data so they can compare to identify which will be the winners and losers in a carbon constrained world.”

Forum for the Future shares this view. There’s an urgent need for uniform and stretching targets, massive investment in clean technologies and new business models that will deliver reduced carbon dioxide emissions for business and consumers alike. In the meantime, it should be noted that the smart money today – and even more so in the future – will be in companies that are innovating to develop new ways of doing business and that succeed in bringing sustainable products and services to the mainstream.

· Dr Sally Uren is is director of the business programme at Forum for the Future

http://society.guardian.co.uk/givinglist/story/0,,1939174,00.html

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