G-500 Survey: climate pays but tech lags. Cisco leads but Apple & Amazon won't play ball
The Carbon Disclosure Project (CDP) survey of the 500 largest global companies by market capitalization is out and the news is mixed for the tech sector. CDP can now demonstrate a strong correlation between corporate climate leadership and financial performance. The group of 500 returned 45% on average between 2005 & 2011 while the CDP performance leaders almost 86% over the same period. And yet the tech sector overall is still lagging on performance and strategy for climate according to the survey which showed the Information Technology sector performing worse than any other.
This reflects their lower than average number of emissions reductions activities as well as less frequent verification. .......this result is surprising given the expectation that Information Technology has the potential to support a wide range of emissions reductions activities.
The survey is carried out each year by the Carbon Disclosure Project on behalf of 551 institutional investors holding more than $71 trillion in assets. With a 80% response rate now achieved through voluntary disclosure CDP has become the most important global information source on man made greenhouse emissions.
CDP provide a ranking on performance assigned in bands from A to E and a ranking of disclosure quality scored out of a maximum of 100%. Without reporting standards and practices still emerging its important to balance performance scores against data quality. CDP have also rightly tightened up performance criteria relating to data verification with only 37% of the 500 surveyed meeting all criteria.
Cisco emerges as the clear leader with a strong balance of data quality and performance. SAP, Samsung and Sony also join Cisco in the overall CDP Disclosure and Performance Indices. Interestingly, Accenture fails to balance disclosure and performance - its disclosing excellently but is not achieving performance at the highest level. Its seems extraordinary to go to great lengths to capture carbon data but then not drive equally as hard a strategy for performance. Google didn't make the leadership index but it did score an A for performance and 89% for disclosure quality. Google recently opened the kimono on its carbon and energy footprint. It had always argued that it's carbon data was commercially sensitive until, I guess, it wasn't anymore.
IBM, HP and Microsoft score as tier 2 players with a B grade, recording a decent climate strategy and performance but not demonstrating a complete strategic intent. I can imagine this will be a disappointing result for IBM who have so heavily invested its identity into the Smart Planet concept. HP, who have taken some knocks recently, can take comfort that it scores in higher than the C tier ranking for Dell indicating that climate strategy & performance is pursued only in part by Dell according to grading criteria. Also in the C tier is Intel who scored 66% on disclosure quality this year compared to 87% in 2008. Two more rungs down the ladder in E territory languishes Oracle, Motorola and NetApp. Basically, E indicates little or no strategy and no performance according to the scoring criteria. Yahoo! and it's Japanese subsidiary chose to return separately but neither could reach the minimum threshold of data quality to allow a performance ranking. Yahoo! corporate did not provide carbon emissions data relating to core business operations but it was able to account for business travel and employee commuting emissions.
Apple was only one of two companies that declined to participate at all, the other was Nintendo. Across in the consumer discretionary sector Amazon also declined to play ball and eBay scored a C. For now at least, Amazon and Apple are bucking the trend and showing strong financial performance without providing investors transparency on its climate performance. (Click below for a better view.)
Disclosure: I am employed by SAP who is a partner with CDP and a survey participant. As always views are my own only. Please see my bio.