Presentation PRI & CFA Netherlands October 10 th 2017 Laurent Babikian Director Investor Engagement Europe CDP Europe laurent.babikian@cdp.net www.cdp.net | @CDP
Outline I. Companies reporting to CDP II. Progress towards the 2-degree economy III. The growing importance of water stewardship IV. The importance of environmental transparency and leadership www.cdp.net | @CDP Page 2
Mission and what we do CDP’s mission • To transform the global economic system to prevent dangerous climate change and value our natural resources by putting relevant Forests information at the heart of business, investment and policy decisions CDP collects information on: • Climate Change INVESTORS • Water security • Forests Climate Water Change From: SUPPLY CHAIN • Publicly listed companies MEMBERS • Their suppliers • World’s largest cities www.cdp.net | @CDP Page 3
I. Companies responding to CDP www.cdp.net | @CDP Page 4
Signatory Investors & AUM, 2003 - 2017 CDP Signatories & Signatory Assets: 2003 - 2017 900 120 800 100 Number of Signatories 700 Assets (US$ Trillion) 600 80 500 60 400 300 40 200 20 100 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Climate Change Signatories Water Signatories Carbon Action Signatories Forests Signatories Climate Change Signatory Assets Water Signatory Assets Carbon Action Signatory Assets Forests Signatory Assets www.cdp.net | @CDP
CDP reporting in 2016 5856 companies 199 companies 1426 companies 57.5% of global market cap disclosed to > 300 cities & 60 CDP in 2016 states and regions www.cdp.net | @CDP
II. Towards a 2-degree economy Climate Change Questionnaire: current status and forward-looking indicators Management CC1. Governance CC2. Strategy CC3. Targets & initiatives CC4. Communications Risks & opportunities CC5. Climate change risks CC6. Climate change opportunities Emissions CC7. Methodology CC11. Energy CC8. Emissions data CC12. Emissions performance CC9. Scope 1 emissions breakdown CC13. Emissions trading CC10. Scope 2 emissions breakdown CC14. Scope 3 Sign off www.cdp.net | @CDP
Rewarding leadership: criteria for the A-list (2017) www.cdp.net | @CDP Page 8
CDP’s scoring A B Leadership • “How can we C Management solve the climate change • “How do we problem?” D Awareness manage our climate change • “What does risks and Disclosure climate change impacts?” mean to our • “This is where company?” we’re at” www.cdp.net | @CDP
2016 global results: business transitioning 85% of companies have 29% of companies use targets to reduce emissions internal carbon pricing 55% of companies have 19% plan to do so targets for 2020 or beyond www.cdp.net | @CDP Page 10
2016 global results: emissions gap Achieving current targets Only 14% of companies have would take companies one goals for 2030 or beyond quarter of the way to keeping 9% have committed to align global warming below 2 targets with climate science degrees for a 2 ° C pathway www.cdp.net | @CDP Page 11
The need to accelerate decarbonization 49 GTCO2 / yr We will exceed the budget in ~20 years! 1010 Remaining carbon budget GTCO2 Bucket: < 2 ° C carbon budget 1890 Cumulative emissions GT CO2 www.cdp.net | @CDP Page 12
Leadership commitments 675+ bold commitments to action 180+ 1,200+ 590+ www.cdp.net | @CDP
Science Based Targets Science Based Targets are greenhouse gas emissions reduction targets aligned with the latest climate science for keeping warming below 2 ° C www.cdp.net | @CDP
Growing momentum Since officially launching in June, 2015, up to Sept 2017: 300 65 2 Companies have Companies have Companies joining the formally joined the SBTi approved targets initiative on average every week www.cdp.net | @CDP Page 15
Carbon pricing Companies identify it as effective approach e.g. Incentive to reallocate resources toward low-carbon activities Business case for R&D investments Helps reveal hidden risks and opportunities www.cdp.net | @CDP Page 16
Corporate carbon pricing: 2016 numbers www.cdp.net | @CDP Page 17
III. Growing importance of water stewardship Water insecurity - the case for action UN predicts a 40% global shortfall in water supply by 2030; Excessive loads of nitrogen and phosphate, from agriculture, industrial production and mining, are degrading the quality of the water we have left ; and www.cdp.net | @CDP
Water risks are rapidly materializing for business US$14 billion in water-related impacts, a five-fold increase from last year Over a quarter of companies experienced detrimental impacts from water Companies expect over half (54%) of the 4,416 water risks they identified to materialize within the next six years . www.cdp.net | @CDP Page 19
CDP’s Water Program CDP Water Questionnaire 150 companies responding in 2010 to 1,432 companies in 2016 Business Alliance for Water and Climate Change (BAFWAC) Businesses commit to measure and minimize water risks and impacts by reporting to CDP New Water Commitment as part of We Mean Business 42 companies committed to Take Action to improve water security www.cdp.net | @CDP
IV. The importance of environmental transparency and performance Sustainable Responding to key sustainability policy Development frameworks Goals EU Non- TCFD Financial Recommen Reporting dations CDP Directive Responders Energy Transition Paris Act (Art. Agreement 173) www.cdp.net | @CDP
CDP data powers the marketplace 2015 Corporate Knights Global 100 CRO’s 100 Best Trucost Corporate Citizens 2000 2002 SustainalyticsRankings DJSI CDP 2000 FTSE4Good Index Series www.cdp.net | @CDP
CDP leaders outperform: STOXX GCCL EUR vs STOXX Global 1800 EUR +33% Points sur 7 ans www.cdp.net | @CDP
Climetrics: Disclosing the climate change leaders The Climetrics rating is the first to rank close to 3,000 equity funds for their climate impact. Symbolized by green leaves issued on a scale from 1 to 5. Top ratings are publicly available via a dedicated website at www.climetrics-rating.org www.cdp.net | @CDP Page 24
Benefits for institutional fund investors Compare Integrate Engage Climetrics allows Climetrics allows Climetrics helps to to compare to integrate engage with equity funds on climate impact asset managers climate impact into fund on the topic of selection and climate change monitoring Top ratings are available for free online at www.climetrics-rating.org Fund specific reports with detailed results will be available in the future www.cdp.net | @CDP Page 25
Rating methodology - Overview 10% Three quantitative layers of analysis to assess 5% climate impact along the investment process. A key focus is on the portfolio holdings , assessing the climate performance of investee companies Innovative model to assess the climate performance of 85% approximately 3,000 companies Asset Manager Level Fund Investment Policy Level Portfolio Holdings Level www.cdp.net | @CDP
Join us as a CDP Signatory or Member ➢ Support us in collecting high-quality primary data from the companies you invest in ➢ Access our extensive qualitative and quantitative databases on Climate Change, Water and Forest Data ➢ Access our awarded quarterly research series on highest emitting sectors ➢ Access the estimation of scope1, 2 and 3 for www.cdp.net | @CDP 3700 companies including all MSCI ACWI
Merci ! Please contact me at laurent.babikian@cdp.net Page 28 www.cdp.net | @CDP
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