FOUR IRISH COMPANIES MAKE GLOBAL ENVIRONMENTAL CDP ‘A LIST’
Four Irish companies – Kingspan, ESB, AIB Group and Accenture – have been named on this year’s A List by CDP, the EU-funded charity which runs the global environmental reporting system. The A List names the companies leading on environmental transparency and action, based on their annual disclosure through CDP’s Climate Change questionnaire.
CDP (formerly the Carbon Disclosure Project) measures environmental impact of companies on behalf of 515 leading global investors representing US$106 trillion in assets. The number of companies reaching the A List rose 50% globally to 312 this year, an indication that the Covid-19 crisis has not diminished how seriously companies and investors are taking sustainability issues. The four Irish companies are joined on the list by leading multinationals including AstraZeneca, HP, Mars and Toyota.
The A List comes just ahead of the five-year anniversary of the Paris Agreement, with world governments later this week expected to deliver updates on their national climate plans to build momentum ahead of COP26.
In Ireland the number of A List companies doubled in 2020, with the ESB joining the list for the first time. Ireland punches above its weight compared to the global average, with 8% of the 48 companies measured by CDP getting A List status, compared to 5% of the more than 5,800 companies measured globally.
The increasing numbers shows that Irish companies are taking the implementation of measurable environmental targets more seriously. The full CDP Ireland results will be published in February 2021, with over 80% of the top 30 Irish publicly quoted companies by market capitalisation reporting to CDP, as well as several large public sector companies.
Commenting on the publication of the list, Shane O’Reilly, Chairman of the CDP Ireland Network said: “It is a tremendous achievement for four Irish companies to obtain A List status this year, and indicative of how seriously Irish corporates are taking their environmental obligations.
There is increasing recognition that companies who fail to disclose their environmental impact will be at a competitive disadvantage, given the importance of the issue of climate change to their investors, customers and employees. Despite the challenges of Covid, the CDP Ireland Network is growing from strength to strength and it is exciting that we will have 17 new Irish companies responding when we publish the full CDP Ireland report next February.”
Colin Hunt, Chief Executive of AIB Group said: “We are truly honoured to be included on the CDP A List once again. 2020 has been a year of challenge and a year of change where the issue of Climate Action has been accelerated to the very top of the business agenda.
In AIB, we recognise the interconnectivity between a healthy Climate, Society and Economy which is why we have committed to becoming Net Zero in our own operations by 2030, and set an ambition to ensure all our customer lending is green by 2040. We’re already making solid progress, recognised by our CDP A score once more today. However, we know we have to do more, and look forward to playing our part in the Irish economy in meeting this challenge head-on.”
Pat O’Doherty, Chief Executive, ESB said: “Our inclusion on the CPD A List is a huge endorsement of ESB’s Brighter Future Strategy, which is anchored in our ambition to lead the transition to a low carbon energy future powered by clean electricity. This A grading acknowledges the collective efforts of everyone in ESB to track and report on our environmental progress, and to innovate and implement new low carbon solutions. In doing so, we are not only reducing our own carbon footprint, but also enabling our customers to take this journey with us.”
Maxfield Weiss, Director Corporate Engagement at CDP Europe, said: “Exactly five years since global leaders shook hands on the Paris Agreement, it’s encouraging to see 70% more companies reporting on their environmental action and that, this year, over 300 are on the A List. We now need these A List pioneers to inspire more corporates to act on climate change, forests and water security, and help ensure that the private sector takes a leadership role when EU environmental targets ratchet up. The race is on.”
While there has been a big increase in the A List this year, it still only represents a minority of companies. Most (74%) of companies scored by CDP achieved D-C scores, meaning they are only just starting their environmental journey and becoming aware of how environmental issues impact their business. Even more concerning is the 11,900+ of companies that were marked with an F for failing to disclose data despite being requested to by investors or their customers. These companies are expected to face increasing pressure to demonstrate they are taking environmental risks seriously.
The market demand for corporate environmental transparency is louder than ever: 515 investors with US$106 trillion in assets, and 150+ large purchasers with US$4 trillion in buying power requested thousands of companies to disclose through CDP in 2020. They use CDP data, including scores, to inform their investment and procurement strategies.
Leading environmental action is correlated with financial success. The A List companies are combined worth US$15 trillion in market value. Data from STOXX has shown that the A List has outperformed its global reference index by an average of 5.3% per annum over a seven-year period.
The companies are scored based on CDP’s transparent scoring methodology covering: comprehensive disclosure of environmental impacts, risks, opportunities, governance and actions; awareness of environmental risks and how they relate to their business; demonstrating management of these environmental risks and evidence of best practice associated with environmental leadership.
Michael McDonnell Managing Editor of Irish Construction Industry Magazine & Plan Magazine