Catalyse business agility through climate change management

Transcription

1 Catalyse business agility through climate change management CDP Italy 100 Climate Change report 2012 on behalf of 655 investors with assets of us$ 78 trillion Report writer Scoring partner 1

2 CDP Investor Members 2012 CDP works with investors globally to advance the investment opportunities and reduce the risks posed by climate change by asking almost 6,000 of the world s largest companies to report on their climate strategies, GHG emissions and energy use in the standardized Investor CDP format. To learn more about CDP s member offering and becoming a member, please contact us or visit the CDP Investor Member section at net/investormembers Aegon AKBANK T.A.Ş. Allianz Global Investors Aviva Investors AXA Group Bank of America Merrill Lynch Bendigo and Adelaide Bank Blackrock BP Investment Management California Public Employees Retirement System - CalPERS California State Teachers Retirement Fund - CalSTRS Calvert Asset Management Company Catholic Super CCLA Daiwa Asset Management Co. Ltd. Generation Investment Management HSBC Holdings KLP Legg Mason London Pension Fund Authority Mongeral Aegon Seguros e Previdência S/A Morgan Stanley National Australia Bank NEI Investments Neuberger Berman Newton Investment Management Ltd Nordea Investment Management Norges Bank Investment Management PFA Pension Robeco Rockefeller & Co. SAM Group Sampension KP Livsforsikring A/S Schroders Scottish Widows Investment Partnership SEB Sompo Japan Insurance Inc Standard Chartered TD Asset Management Inc. and TDAM USA Inc. The RBS Group The Wellcome Trust A CDP InvESTor SIgnaTorIES & assets (us$ TrILLIon) against TIME B 2012 SIgnaTory InvESTor breakdown Investor CDP Signatories Investor CDP Signatories Assets 259 Asset Managers Asset Owners Banks Insurance Other 2

3 CDP Signatory Investor financial institutions with assets of us$78 trillion were signatories to the CDP 2012 information request dated february 1st, 2012 Aberdeen Asset Managers Aberdeen Immobilien KAG mbh ABRAPP - Associação Brasileira das Entidades Fechadas de Previdência Complementar Achmea NV Active Earth Investment Management Acuity Investment Management Addenda Capital Inc. Advanced Investment Partners AEGON N.V. AEGON-INDUSTRIAL Fund Management Co., Ltd AFP Integra AIG Asset Management AK Asset Management Inc. AKBANK T.A.Ş. Alberta Investment Management Corporation (AIMCo) Alberta Teachers Retirement Fund Alcyone Finance AllenbridgeEpic Investment Advisers Limited Allianz Elementar Versicherungs-AG Allianz Global Investors Kapitalanlagegesellschaft mbh Allianz Group Altira Group Amalgamated Bank AMP Capital Investors AmpegaGerling Investment GmbH Amundi AM ANBIMA Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais Antera Gestão de Recursos S.A. APG AQEX LLC Aquila Capital Arisaig Partners Asia Pte Ltd Arma Portföy Yönetimi A.Ş. ASM Administradora de Recursos S.A. ASN Bank Assicurazioni Generali Spa ATI Asset Management ATP Group Australia and New Zealand Banking Group Limited Australian Ethical Investment AustralianSuper Avaron Asset Management AS Aviva Investors Aviva plc AXA Group Baillie Gifford & Co. BaltCap BANCA CÍVICA S.A. Banca Monte dei Paschi di Siena Group Banco Bradesco S/A Banco Comercial Português S.A. Banco de Credito del Peru BCP Banco de Galicia y Buenos Aires S.A. Banco do Brasil S/A Banco Espírito Santo, SA Banco Nacional de Desenvolvimento Econômico e Social - BNDES Banco Popular Español Banco Sabadell, S.A. Banco Santander Banesprev Fundo Banespa de Seguridade Social Banesto Bank Handlowy w Warszawie S.A. Bank of America Merrill Lynch Bank of Montreal Bank Vontobel Bankhaus Schelhammer & Schattera Kapitalanlagegesellschaft m.b.h. BANKIA S.A. BANKINTER BankInvest Banque Degroof Banque Libano-Francaise Barclays Basellandschaftliche Kantonalbank BASF Sociedade de Previdência Complementar Basler Kantonalbank Bâtirente Baumann and Partners S.A. Bayern LB BayernInvest Kapitalanlagegesellschaft mbh BBC Pension Trust Ltd BBVA Bedfordshire Pension Fund Beetle Capital BEFIMMO SCA Bendigo & Adelaide Bank Limited Bentall Kennedy Berenberg Bank Berti Investments BioFinance Administração de Recursos de Terceiros Ltda BlackRock Blom Bank SAL Blumenthal Foundation BNP Paribas Investment Partners BNY Mellon BNY Mellon Service Kapitalanlage Gesellschaft Boston Common Asset Management, LLC BP Investment Management Limited Brasilprev Seguros e Previdência S/A. British Airways Pension Investment Management Limited British Columbia Investment Management Corporation (bcimc) BT Investment Management Busan Bank CAAT Pension Plan Cadiz Holdings Limited Caisse de dépôt et placement du Québec Caisse des Dépôts Caixa Beneficente dos Empregados da Companhia Siderurgica Nacional - CBS Caixa de Previdência dos Funcionários do Banco do Nordeste do Brasil (CAPEF) Caixa Econômica Federal Caixa Geral de Depositos CaixaBank, S.A California Public Employees Retirement System California State Teachers Retirement System California State Treasurer Calvert Investment Management, Inc Canada Pension Plan Investment Board Canadian Friends Service Committee (Quakers) Canadian Imperial Bank of Commerce (CIBC) Canadian Labour Congress Staff Pension Fund CAPESESP Capital Innovations, LLC CARE Super Carmignac Gestion Catherine Donnelly Foundation Catholic Super CBF Church of England Funds CBRE Cbus Superannuation Fund CCLA Investment Management Ltd Celeste Funds Management Limited Central Finance Board of the Methodist Church Ceres CERES-Fundação de Seguridade Social Change Investment Management Christian Brothers Investment Services Christian Super Christopher Reynolds Foundation Church Commissioners for England Church of England Pensions Board CI Mutual Funds Signature Global Advisors City Developments Limited Clean Yield Asset Management ClearBridge Advisors Climate Change Capital Group Ltd CM-CIC Asset Management Colonial First State Global Asset Management Comerica Incorporated COMGEST Commerzbank AG CommInsure Commonwealth Bank Australia Commonwealth Superannuation Corporation Compton Foundation Concordia Versicherungsgruppe Connecticut Retirement Plans and Trust Funds Co-operative Financial Services (CFS) Credit Suisse Daegu Bank Daesung Capital Management Daiwa Asset Management Co. Ltd. Daiwa Securities Group Inc. Dalton Nicol Reid de Pury Pictet Turrettini & Cie S.A. DekaBank Deutsche Girozentrale Delta Lloyd Asset Management Deutsche Asset Management Investmentgesellschaft mbh Deutsche Bank AG Development Bank of Japan Inc. 3

4 Development Bank of the Philippines (DBP) Dexia Asset Management Dexus Property Group DnB ASA Domini Social Investments LLC Dongbu Insurance DWS Investment GmbH Earth Capital Partners LLP East Sussex Pension Fund Ecclesiastical Investment Management Ecofi Investissements - Groupe Credit Cooperatif Edward W. Hazen Foundation EEA Group Ltd Elan Capital Partners Element Investment Managers ELETRA - Fundação Celg de Seguros e Previdência Environment Agency Active Pension fund Epworth Investment Management Equilibrium Capital Group equinet Bank AG Erik Penser Fondkommission Erste Asset Management Erste Group Bank Essex Investment Management Company, LLC ESSSuper Ethos Foundation Etica Sgr Eureka Funds Management Eurizon Capital SGR Evangelical Lutheran Church in Canada Pension Plan for Clergy and Lay Workers Evangelical Lutheran Foundation of Eastern Canada Evli Bank Plc F&C Investments FACEB FUNDAÇÃO DE PREVIDÊNCIA DOS EMPREGADOS DA CEB FAELCE Fundacao Coelce de Seguridade Social FAPERS- Fundação Assistencial e Previdenciária da Extensão Rural do Rio Grande do Sul FASERN - Fundação COSERN de Previdência Complementar Fédéris Gestion d Actifs FIDURA Capital Consult GmbH FIM Asset Management Ltd FIM Services FIPECq - Fundação de Previdência Complementar dos Empregados e Servidores da FINEP, do IPEA, do CNPq FIRA. - Banco de Mexico First Affirmative Financial Network, LLC First Swedish National Pension Fund (AP1) Firstrand Group Limited Five Oceans Asset Management Florida State Board of Administration (SBA) Folketrygdfondet Folksam Fondaction CSN Fondation de Luxembourg Forma Futura Invest AG Fourth Swedish National Pension Fund, (AP4) FRANKFURT-TRUST Investment-Gesellschaft mbh Fukoku Capital Management Inc FUNCEF - Fundação dos Economiários Federais Fundação AMPLA de Seguridade Social - Brasiletros Fundação Atlântico de Seguridade Social Fundação Attilio Francisco Xavier Fontana Fundação Banrisul de Seguridade Social Fundação BRDE de Previdência Complementar - ISBRE Fundação Chesf de Assistência e Seguridade Social Fachesf Fundação Corsan - dos Funcionários da Companhia Riograndense de Saneamento Fundação de Assistência e Previdência Social do BNDES - FAPES FUNDAÇÃO ELETROBRÁS DE SEGURIDADE SOCIAL - ELETROS Fundação Forluminas de Seguridade Social - FORLUZ Fundação Itaipu BR - de Previdência e Assistência Social FUNDAÇÃO ITAUBANCO Fundação Itaúsa Industrial Fundação Promon de Previdência Social Fundação Rede Ferroviária de Seguridade Social - Refer FUNDAÇÃO SANEPAR DE PREVIDÊNCIA E ASSISTÊNCIA SOCIAL - FUSAN Fundação Sistel de Seguridade Social (Sistel) Fundação Vale do Rio Doce de Seguridade Social - VALIA FUNDIÁGUA - FUNDAÇÃO DE PREVIDENCIA COMPLEMENTAR DA CAESB Futuregrowth Asset Management Garanti Bank GEAP Fundação de Seguridade Social Generali Deutschland Holding AG Generation Investment Management Genus Capital Management Gjensidige Forsikring ASA Global Forestry Capital SARL GLS Gemeinschaftsbank eg Goldman Sachs Group Inc. GOOD GROWTH INSTITUT für globale Vermögensentwicklung mbh Governance for Owners Government Employees Pension Fund ( GEPF ), Republic of South Africa GPT Group Graubündner Kantonalbank Greater Manchester Pension Fund Green Cay Asset Management Green Century Capital Management GROUPAMA EMEKLILIK A.Ş. GROUPAMA SIGORTA A.Ş. Groupe Crédit Coopératif Groupe Investissement Responsable Inc. GROUPE OFI AM Grupo Financiero Banorte SAB de CV Grupo Santander Brasil Gruppo Bancario Credito Valtellinese Guardians of New Zealand Superannuation Hanwha Asset Management Company Harbour Asset Management Harrington Investments, Inc Hauck & Aufhäuser Asset Management GmbH Hazel Capital LLP HDFC Bank Ltd Healthcare of Ontario Pension Plan (HOOPP) Helaba Invest Kapitalanlagegesellschaft mbh Henderson Global Investors Hermes Fund Managers HESTA Super HIP Investor Holden & Partners HSBC Global Asset Management (Deutschland) GmbH HSBC Holdings plc HSBC INKA Internationale Kapitalanlagegesellschaft mbh HUMANIS Hyundai Marine & Fire Insurance. Co., Ltd. Hyundai Securities Co., Ltd. IBK Securities IDBI Bank Ltd Illinois State Board of Investment Ilmarinen Mutual Pension Insurance Company Impax Asset Management IndusInd Bank Limited Industrial Alliance Insurance and Financial Services Inc. Industrial Bank (A) Industrial Bank of Korea Industrial Development Corporation Industry Funds Management Infrastructure Development Finance Company ING Group N.V. Insight Investment Management (Global) Ltd Instituto de Seguridade Social dos Correios e Telégrafos- Postalis Instituto Infraero de Seguridade Social - INFRAPREV Instituto Sebrae De Seguridade Social - SEBRAEPREV Insurance Australia Group IntReal KAG Investec Asset Management Investing for Good CIC Ltd Irish Life Investment Managers Itau Asset Management Itaú Unibanco Holding S A Janus Capital Group Inc. Jarislowsky Fraser Limited JOHNSON & JOHNSON SOCIEDADE PREVIDENCIARIA JPMorgan Chase & Co. Jubitz Family Foundation Jupiter Asset Management Kaiser Ritter Partner (Schweiz) AG KB Kookmin Bank KBC Asset Management NV KBC Group KCPS Private Wealth Management KDB Asset Management Co., Ltd. KDB Daewoo Securities KEPLER-FONDS Kapitalanlagegesellschaft m. b. H. Keva KfW Bankengruppe Killik & Co LLP Kiwi Income Property Trust Kleinwort Benson Investors KlimaINVEST KLP Korea Investment Management Co., Ltd. Korea Technology Finance Corporation (KOTEC) KPA Pension Kyrkans pensionskassa La Banque Postale Asset Management 4

5 La Financiere Responsable Lampe Asset Management GmbH Landsorganisationen i Sverige LBBW - Landesbank Baden-Württemberg LBBW Asset Management Investmentgesellschaft mbh LD Lønmodtagernes Dyrtidsfond Legal & General Investment Management Legg Mason Global Asset Management LGT Capital Management Ltd. LIG Insurance Co., Ltd Light Green Advisors, LLC Living Planet Fund Management Company S.A. Lloyds Banking Group Local Authority Pension Fund Forum Local Government Super Local Super Logos portföy Yönetimi A.Ş. London Pensions Fund Authority Lothian Pension Fund LUCRF Super Lupus alpha Asset Management GmbH Macquarie Group Limited MagNet Magyar Közösségi Bank Zrt. MainFirst Bank AG MAMA Sustainable Incubation AG Man MAPFRE Maple-Brown Abbott Marc J. Lane Investment Management, Inc. Maryland State Treasurer Matrix Asset Management MATRIX GROUP LTD McLean Budden MEAG MUNICH ERGO AssetManagement GmbH Meeschaert Gestion Privée Meiji Yasuda Life Insurance Company Mendesprev Sociedade Previdenciária Merck Family Fund Mercy Investment Services, Inc. Mergence Investment Managers Meritas Mutual Funds MetallRente GmbH Metrus Instituto de Seguridade Social Metzler Asset Management Gmbh MFS Investment Management Midas International Asset Management Miller/Howard Investments Mirae Asset Global Investments Co. Ltd. Mirae Asset Securities Mirvac Group Ltd Missionary Oblates of Mary Immaculate Mistra, Foundation for Strategic Environmental Research Mitsubishi UFJ Financial Group Mitsui Sumitomo Insurance Co.,Ltd Mizuho Financial Group, Inc. Mn Services Momentum Manager of Managers (Pty) Limited Monega Kapitalanlagegesellschaft mbh Mongeral Aegon Seguros e Previdência S/A Morgan Stanley Mountain Cleantech AG MTAA Superannuation Fund Mutual Insurance Company Pension-Fennia Nanuk Asset Management Natcan Investment Management Nathan Cummings Foundation, The National Australia Bank National Bank of Canada NATIONAL BANK OF GREECE S.A. National Grid Electricity Group of the Electricity Supply Pension Scheme National Grid UK Pension Scheme National Pensions Reserve Fund of Ireland National Union of Public and General Employees (NUPGE) NATIXIS Nedbank Limited Needmor Fund NEI Investments Nelson Capital Management, LLC Neuberger Berman New Alternatives Fund Inc. New Amsterdam Partners LLC New Mexico State Treasurer New York City Employees Retirement System New York City Teachers Retirement System New York State Common Retirement Fund (NYSCRF) Newton Investment Management Limited NGS Super NH-CA Asset Management Nikko Asset Management Co., Ltd. Nipponkoa Insurance Company, Ltd Nissay Asset Management Corporation NORD/LB Kapitalanlagegesellschaft AG Nordea Investment Management Norfolk Pension Fund Norges Bank Investment Management North Carolina Retirement System Northern Ireland Local Government Officers Superannuation Committee (NILGOSC) NORTHERN STAR GROUP Northern Trust Northward Capital Pty Ltd Nykredit Oddo & Cie OECO Capital Lebensversicherung AG ÖKOWORLD Old Mutual plc OMERS Administration Corporation Ontario Teachers Pension Plan OP Fund Management Company Ltd Oppenheim & Co. Limited Oppenheim Fonds Trust GmbH Opplysningsvesenets fond (The Norwegian Church Endowment) OPTrust Oregon State Treasurer Orion Energy Systems Osmosis Investment Management Parnassus Investments Pax World Funds Pensioenfonds Vervoer Pension Denmark Pension Fund for Danish Lawyers and Economists Pension Protection Fund Pensionsmyndigheten Perpetual Investments PETROS - The Fundação Petrobras de Seguridade Social PFA Pension PGGM Vermogensbeheer Phillips, Hager & North Investment Management Ltd. PhiTrust Active Investors Pictet Asset Management SA Pioneer Investments PIRAEUS BANK PKA Pluris Sustainable Investments SA PNC Financial Services Group, Inc. Pohjola Asset Management Ltd Polden-Puckham Charitable Foundation Portfolio 21 Investments Porto Seguro S.A. Power Finance Corporation Limited PREVHAB PREVIDÊNCIA COMPLEMENTAR PREVI Caixa de Previdência dos Funcionários do Banco do Brasil PREVIG Sociedade de Previdência Complementar ProLogis Provinzial Rheinland Holding Prudential Investment Management Prudential Plc Psagot Investment House Ltd PSP Investments Q Capital Partners QBE Insurance Group Rabobank Raiffeisen Fund Management Hungary Ltd. Raiffeisen Kapitalanlage-Gesellschaft m.b.h. Raiffeisen Schweiz Genossenschaft Rathbones / Rathbone Greenbank Investments RCM (Allianz Global Investors) Real Grandeza Fundação de Previdência e Assistência Social Rei Super Reliance Capital Ltd Resolution Resona Bank, Limited Reynders McVeigh Capital Management RLAM Robeco Robert & Patricia Switzer Foundation Rockefeller Financial (trade name used by Rockefeller & Co., Inc.) Rose Foundation for Communities and the Environment Rothschild Royal Bank of Canada Royal Bank of Scotland Group RPMI Railpen Investments RREEF Investment GmbH Russell Investments SAM Group SAMPENSION KP LIVSFORSIKRING A/S SAMSUNG FIRE & MARINE INSURANCE Samsung Securities Sanlam Life Insurance Ltd Santa Fé Portfolios Ltda Santam 5

6 Sarasin & Cie AG SAS Trustee Corporation Sauren Finanzdienstleistungen GmbH & Co. KG Schroders Scotiabank Scottish Widows Investment Partnership SEB SEB Asset Management AG Second Swedish National Pension Fund (AP2) Seligson & Co Fund Management Plc Sentinel Investments SERPROS - Fundo Multipatrocinado Service Employees International Union Pension Fund Seventh Swedish National Pension Fund (AP7) Shinhan Bank Shinhan BNP Paribas Investment Trust Management Co., Ltd Shinkin Asset Management Co., Ltd Siemens Kapitalanlagegesellschaft mbh Signet Capital Management Ltd Smith Pierce, LLC SNS Asset Management Social(k) Sociedade de Previdencia Complementar da Dataprev - Prevdata Socrates Fund Management Solaris Investment Management Limited Sompo Japan Insurance Inc. Sopher Investment Management SouthPeak Investment Management SPF Beheer bv Sprucegrove Investment Management Ltd Standard Bank Group Standard Chartered Standard Chartered Korea Limited Standard Life Investments State Bank of India State Street Corporation StatewideSuper StoreBrand ASA Strathclyde Pension Fund Stratus Group Sumitomo Mitsui Financial Group Sumitomo Mitsui Trust Holdings, Inc. Sun Life Financial Inc. Superfund Asset Management GmbH SUSI Partners AG Sustainable Capital Sustainable Development Capital Svenska Kyrkan, Church of Sweden Swedbank AB Swift Foundation Swiss Re Swisscanto Asset Management AG Syntrus Achmea Asset Management T. Rowe Price T. SINAI KALKINMA BANKASI A.Ş. Tata Capital Limited TD Asset Management Inc. and TDAM USA Inc. Teachers Insurance and Annuity Association College Retirement Equities Fund Telluride Association Tempis Asset Management Co. Ltd Terra Forvaltning AS TerraVerde Capital Management LLC TfL Pension Fund The ASB Community Trust The Brainerd Foundation The Bullitt Foundation The Central Church Fund of Finland The Children s Investment Fund Management (UK) LLP The Collins Foundation The Co-operative Asset Management The Co-operators Group Ltd The Daly Foundation The Environmental Investment Partnership LLP The Hartford Financial Services Group, Inc. The Joseph Rowntree Charitable Trust The Korea Teachers Pension (KTP) The Pension Plan For Employees of the Public Service Alliance of Canada The Pinch Group The Presbyterian Church in Canada The Russell Family Foundation The Sandy River Charitable Foundation The Shiga Bank, Ltd. The Sisters of St. Ann The United Church of Canada - General Council The University of Edinburgh Endowment Fund The Wellcome Trust Third Swedish National Pension Fund (AP3) Threadneedle Asset Management TOBAM Tokio Marine Holdings, Inc Toronto Atmospheric Fund Trillium Asset Management Corporation Triodos Investment Management Tri-State Coalition for Responsible Investment Tryg UBS Unibail-Rodamco UniCredit SpA Union Asset Management Holding AG Union Investment Privatfonds GmbH Unione di Banche Italiane S.c.p.a. Unionen Unipension UNISON staff pension scheme UniSuper Unitarian Universalist Association United Methodist Church General Board of Pension and Health Benefits United Nations Foundation Unity Trust Bank Universities Superannuation Scheme (USS) Vancity Group of Companies VCH Vermögensverwaltung AG Ventas, Inc. Veris Wealth Partners Veritas Investment Trust GmbH Vermont State Treasurer Vexiom Capital, L.P. VicSuper Victorian Funds Management Corporation VietNam Holding Ltd. Voigt & Coll. GmbH VOLKSBANK INVESTMENTS Waikato Community Trust Inc Walden Asset Management, a division of Boston Trust & Investment Management Company WARBURG - HENDERSON Kapitalanlagegesellschaft für Immobilien mbh WARBURG INVEST KAPITALANLAGEGESELLSCHAFT MBH Water Asset Management, LLC Wells Fargo & Company West Yorkshire Pension Fund WestLB Mellon Asset Management (WMAM) Westpac Banking Corporation WHEB Asset Management White Owl Capital AG Winslow Management, A Brown Advisory Investment Group Woori Bank Woori Investment & Securities Co., Ltd. YES BANK Limited York University Pension Fund Youville Provident Fund Inc. Zegora Investment Management Zevin Asset Management Zurich Cantonal Bank 6

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8 Contents It is crystal clear: There is never a way back into the past whether it has proven a good or a bad time. We all have to adapt to the developments that have taken place so far and to those that lie ahead. This is just the application of the most successful strategy for the past billion years: evolution. Andreas Knörzer Bank Sarasin CDP CEo foreword 9 guest foreword 10 accenture foreword 11 Executive summary 12 key themes and highlights 14 Investor perspective Leaders 21 a dialogue with the Italian Environment Minister 24 key statistics 26 an insight into ghg emissions verification 30 Sector analysis 32 appendix 36 8

9 CDP CEo foreword CDP has pioneered the only global system that collects information about corporate behaviour on climate change and water scarcity, on behalf of market forces, including shareholders and purchasing corporations. The pressure is growing for companies to build long-term resilience in their business. The unprecedented debt crisis that has hit many parts of the world has sparked a growing understanding that short-termism can bring an established economic system to breaking point. As some national economies have been brought to their knees in recent months, we are reminded that nature s system is under threat through the depletion of the world s finite natural resources and the rise of greenhouse gas emissions. Business and economies globally have already been impacted by the increased frequency and severity of extreme weather events, which scientists are increasingly linking to climate change 1. Bad harvests due to unusual weather have this year rocked the agricultural industry, with the price of grain, corn and soya beans reaching an all-time high. Last year, flash floods that ravaged Italy s Cinque Terre and parts of Tuscany alone caused economic losses of about US$545 million. 2 It is vital that we internalise the costs of future environmental damage into today s decisions by putting an effective price on carbon. Whilst regulation is slow, a growing number of jurisdictions have introduced carbon pricing with carbon taxes or cap-and-trade schemes. The most established remains the EU Emissions Trading Scheme but moves have also been made in Australia, California, China and South Korea among others. Enabling better decisions by providing investors, companies and governments with high quality information on how companies are managing their response to climate change and mitigating the risks from natural resource constraints has never been more important. CDP has pioneered the only global system that collects information about corporate behaviour on climate change and water scarcity, on behalf of market forces, including shareholders and purchasing corporations. CDP works to accelerate action on climate change through disclosure and more recently through its Carbon Action program. In 2012, on behalf of its Carbon Action signatory investors CDP engaged 205 companies in the Global 500 to request they set an emissions reduction target; 61 of these companies have now done so. CDP continues to evolve and respond to market needs. This year we announced that the Global Canopy Programme s Forest Footprint Disclosure Project will merge with CDP over the next two years. Bringing forests, which are critically linked to both climate and water security, into the CDP system will enable companies and investors to rely on one source of primary data for this set of interrelated issues. Accounting for and valuing the world s natural capital is fundamental to building economic stability and prosperity. Companies that work to decouple greenhouse gas emissions from financial returns have the potential for both short and long-term cost savings, sustainable revenue generation and a more resilient future. Paul Simpson CEO Carbon Disclosure Project 1. The State of the Climate in 2011 report, led by the National Oceanographic and Atmospheric Administration (NOAA) in the US and published as part of the Bulletin of the American Meteorological Society (BAMS) 2. The international disaster database referring to the fl ash fl oods in Cinque Terre, Liguria and Tuscany on 26 October

10 guest foreword We need to promote competitiveness, prosperity and quality of life within the limits of our planet Copyright EU As the world struggles to exit from the financial and economic turmoil, we must look ahead and focus not only on jobs and growth, but also on the type of growth we want. We can no longer continue to ignore the severity of debt in our natural capital. Environmental degradation is becoming more and more evident everywhere. The state of our oceans, soils, forests and biodiversity, and the impacts of climate change are just some of the signs that we are beginning to see. This will have severe consequences not only on health and the environment but also on the economy. If we do not want resource scarcities and pressures to be a major constraint on growth in the near future, we need to promote competitiveness, prosperity and quality of life within the limits of our planet. This is why the European Commission places resource efficiency at the centre of its agenda for economic transformation. The objective is to achieve environmentally compatible growth, decoupling resource use from economic growth and reducing greenhouse gas emissions. Our most important resource is our natural capital and the benefits that we draw from nature year after year. If we erode that capital for short-term gains, we are simply gambling with our future. There will be no growth in the future if it is not sustainable, if it is not resource efficient. This is already necessary for our generation, but indispensable for the next. Dr. Janez Potočnik European Commissioner for the Environment 10 The important impact of better resource efficiency on climate change is too often underestimated. This is why I welcome CDP s vision to widen its scope to include natural capital and resources. It reflects an important change in the approach of corporations. Companies need stronger, more long-term price signals to produce returns on investment, and it is for public authorities to provide the right signals, incentives, direction and most importantly leadership. We need to move from a short-term to a more long-term vision that will help us see that there is a clear link between resource efficiency and increased profitability, and improve on both.

11 accenture foreword The Earth overshoot Day in 2012 was reached on august 22nd. Ten years ago it was on october 3rd and 20 years ago on october 21st. The index, gives the approximate date on which the planet s ability to replenish resource consumption for the respective year has been surpassed. given current trends in consumption, one thing is clear: Earth overshoot Day arrives earlier each year. It means that every year we start consuming the Earth s natural reserves sooner. The Earth Overshoot Day in 2012 was reached on August 22 nd. Ten years ago it was on October 3 rd and 20 years ago on October 21 st. The index, developed by The Global Footprint Network, gives the approximate date on which the planet s ability to replenish resource consumption for the respective year has been surpassed. Given current trends in consumption, one thing is clear: Earth Overshoot Day arrives earlier each year. It means that every year we start consuming the Earth s natural reserves sooner. A few months ago, on the occasion of the 40th anniversary of the publication of The Limits to Growth commissioned by The Club of Rome, one of the authors, Jorgen Randers, made an attempt to forecast how things will change until The results, that consider expected increase in efficiency utilization of resources, are quite impressive: population growth peaking at 8.1 billion, food supply insufficient to entirely avoid starvation, CO 2 concentrations growing close to passing the danger threshold of +2 C by 2050, the United States and the other OECD countries experiencing stagnation. This model might prove, of course, to be wrong in its estimations, but we pointed it out as a tribute to the Club of Rome, which in a certain way represents the cradle of the sustainability think tank. Looking beyond that single model, many scientists and international organisations agree on similar estimations. The inevitable resulting reflection is that changes faced by our overall economic and industrial system are structurally deep and complex and cannot be overcome merely with a tip-of-the-iceberg solution. So, what if we started considering the economic downturn as an opportunity? The opportunity for innovating companies and rethinking technologies, the opportunity of developing new skills and building modern infrastructures.an interesting theory of a Russian economist, Nikolaj Kondrat ev, who lived in the first half of the XX century, describes the economic cycles as sinusoidal waves alternating ascending and descending phases, with long-run waves of innovation that can be observed since the industrial revolution. One of the notable things about these waves of innovation is that they created wealth and social progress in the places where they started. According to several economists, the current period would be preliminary to the 6 th wave and this time the driver of innovation would be sustainability leading to investments in renewable energies, smart grids, green chemistry and green nanotechnology, among others. We sincerely wish to see this wave taking shape and approaching us very soon. For the reasons above, but also because companies need to understand, measure and monitor their carbon footprint to address their strategies, we think that this CDP report is an additional help for Italian listed companies to understand that GHG emissions and climate change mitigation actions are not just CSR topics but are part of the competitive arena where they can play a new role for growth and profitability. That s why we hope that Italian Authorities, as recently done by UK ones (where reporting will be mandatory from April 2013), will mandate all listed companies to disclose their carbon emissions. Danilo Troncarelli Sustainability Lead Italy, Central & Eastern Europe, Russia, Middle East 11

12 Executive summary The Carbon Disclosure Project (CDP) is an independent not-for-profit organization working to drive greenhouse gas emissions reduction and sustainable water use by business and cities. CDP requests climate change data on behalf of 655 institutional investors to be used by financial decision makers in their investment, lending and insurance analysis. This year we experienced a significant 30% increase in the number of respondents in Italy, receiving 46 responses compared to last year s 35. (Fig. 1) Out of these, 43 were unique responses whereas Banca Generali, Credito Artigiano and Enel Green Power referred to their parent company s response. These three responses are included to provide full picture of response rate, while the remaining analysis in this report is based on the lower total of 43 which excludes these 3 companies. The respondents belong to nine different sectors: Consumer Discretionary (Arnoldo Mondadori Editore, Brembo, Fiat, Gruppo Editoriale L Espresso, Geox, Landi Renzo, Lottomatica, Marr, Pirelli, YOOX); Energy (Eni, Saipem); Financials (Assicurazioni Generali, Banca Monte dei Paschi di Siena, Banco Popolare Società Cooperativa, Credito Valtellinese, Exor, Immobiliare Grande Distribuzione, Intesa Sanpaolo, Mediobanca, UBI Banca, UniCredit, Unipol); Health Care (Diasorin); Industrials (Ansaldo STS, Astaldi, Atlantia, Danieli & C Officine Meccaniche, Fiat Industrial, Finmeccanica); Information Technology (ST Microelectronics), Materials (Buzzi Unicem, Cementir, Italcementi); Telecommunication Services (Telecom), Utilities (a2a, Acea, Edison, Enel, Hera, Iren, Snam Rete Gas, Terna). There is a visible increase, compared to last year, in the level of importance given by companies to climate change, as can be seen in the increase of board or other senior management accountable for climate change (95% compared to 61% in 2011). Additionally, 70% (30) of responding companies declare that climate change has been integrated into their overall business strategy and a large number of companies (72%, equal to 31 of respondents) have begun communicating their focus on these aspects in voluntary reports, showing their interest in public disclosure of their activities. Companies engagement in carbon management is high and growing, the Italian panel of responding companies has increased and reported emissions 3 have changed accordingly; from 2009 to 2011 Scope 1 emissions increased from almost to 249 to 269 million metric tons CO 2 e, reported Scope 2 emissions rose from about 9 to 20 million metric tons CO 2 e. In 2011, 22 companies identified Scope 3 emissions, while in 2012 the number grew to 30 companies. Looking only at companies that also reported their emissions last year, total Scope 1 emissions decreased from 258 million metric tons CO 2 e to about 244 million metric tons CO 2 e; the change represents a 5% reduction on a year-to-year basis. It must be said, anyway, that of the 13.6 million metric tons CO 2 e reduction, only half of it can be related to emission reduction activities whilst the remaining is, as declared by companies, due to reduced production. With regards to emission data provided, the numbers show how organizations are starting to understand the 1 Number of responding companies Top disclosure and performance scorers Disclosure scoring Average disclosure score in 2011 Delta improvement for 2011 panel Average disclosure score in 2012 for 2011 panel Delta drop by new companies Average disclosure score for 2012 panel Company name Sector CDLI CPLI a2a Utilities Buzzi Unicem Materials ENEL Utilities Eni Energy Fiat Consumer Discretionary Fiat Industrial Industrials Intesa Sanpaolo Financials Italcementi Materials Pirelli Consumer Discretionary ST Microelectronics Information Technology 12

13 importance of verifying their data: 63% of respondents obtained independent verification or assurance of their emissions in 2012, and 46% gained full points for verification of emissions (or a percentage of emissions) of at least one of the scopes. The number of Italian respondents providing verification statements approved by CDP almost doubled from 2011 to 2012 (from 12 in 2011 to 21 in 2012), with 100% of responding companies in the Utility and Materials sectors getting full scores on both disclosure and performance for at least one of the scopes. Although 81% of responding companies declare to be engaged in emission reduction initiatives, only 58% have actually set targets of, either or both, absolute or intensity nature. The majority of those which have set at least one target seem to be ahead of or in line with them. However, only 60% (15 out of 25) of the companies with reduction targets declare their emissions was exclusively due to the implementation of relevant activities. In addition, long-term planning of activities does not seem to be on the agenda of executives, since 90% of the reported targets have a timeline until 2015 and just a small minority of companies sets targets towards the year The global economic downturn has inevitably been a significant reason for the reduction of emissions by Italian companies, as many of them explain their emission reductions with a decrease in output. But this means that an increase in production is likely to result in an equivalent increase in GHG emissions. Looking closer at the absolute amount of emissions that companies plan to reduce, most of it is related to current or planned activities by one company only, namely Enel, and is related to avoided emissions due to the installation of renewable energy facilities. Climate change plays a significant role in both the risks and opportunities perceived by respondents. Companies have identified about 280 risks and 180 opportunities drivers. The Utility sector identifies more risks than opportunities (65 risks against 37 opportunities), whilst companies from the Financial sector are those with the highest balance (66 risks against 52 opportunities). 26% of the identified risks and 28% of the opportunities are expected to materialize within a year s time, however the assessment of the potential financial implications that risks and opportunities can have on business operations is proving not to be a common practice among responding companies. We have seen a slight decrease in the average disclosure score of Italian responding companies from 63 points in 2011 to 62 points this year. Though very small, this decrease is due to some of the new respondents that have recently started engaging in carbon management and have, therefore, still a limited quality of disclosure. (Fig. 2) On the other hand, the average score of companies this year included in the Carbon Disclosure Leadership Index (CDLI) is 90, showing that there has again been a great improvement from the previous year s average score of 84. This striking difference between the leaders and the whole sample is mainly due to different levels of maturity on the subject of carbon management not only among new respondents but also from companies that have been disclosing to CDP for some time now but that may not have yet achieved the quality on emissions disclosure required. Conversely, top ten companies making up this year s CDLI have improved their scores by 7% and now cover seven out of the nine responding sectors (Health Care and Telecom are not represented), two more than in Buzzi Unicem achieved the striking result of entering, in their first year of disclosure, into the CDLI. In addition, comparing the disclosure scores from those companies that responded to CDP in 2011 and did so again in 2012, we see an increase in their average score from 63 to 69. (Fig. 2) This is an important sign which makes us believe that climate change disclosure and performance will improve among all companies in the near future. With regards performance scores, three Italian companies (ENI, Fiat and Intesa Sanpaolo) were assigned the performance band A, becoming part of the CPLI; Intesa and Eni are included in the Global 500 CPLI as well. (Fig. 3) Although the importance Italian companies are giving to climate change is growing, it seems as if respondents are engaging in climate change management without yet a full understanding on the business case and innovation opportunities behind it. Indeed, we see that companies have targets but these are mostly short-term, investment reduction initiatives are in place but not identified on the basis of a sound financial analysis, companies extensively identify risks and opportunities but again do not assess the financial implications on their business operations. This leaves us questioning whether disclosers are really on track and have a viable approach towards successful climate change management. Despite the improvement in the response rate of the Italy 100 sample, companies still need to define an integrated approach to climate change necessary for the creation of a sustainable business model and the establishment of best practice standards towards an economic recovery under a low carbon scenario. Especially during these times of crisis, it is advisable to engage in activities with a satisfactory return on investment and that can generate long-term value for the company. Therefore our advice is to shift the corporate mind-set towards the three pillars of sustainable development (economic, social and environmental) and allocate resources more efficiently to prepare for longterm competitiveness. 3. Reported emissions are related to Italian companies operations worldwide 13

14 key themes and highlights beatrice Lamonica, accenture Sustainability Services Carbon Management: has measurement and reporting been translated into action? How are Italian companies moving in this context? Are emissions continuing to rise? Does climate change represent an opportunity for Italian companies? How are investments being addressed? We think these questions are the most relevant and we highly appreciate the opportunity of having insights from the most important Italian companies, thus allowing us to draw a picture. Companies engagement and attention to carbon management is high and growing: the percentage of Italian companies responding to CDP s investors request has increased again this year by 30% to 46 4 companies from 35 in Reported emissions from Italian companies globally have changed accordingly; from 2009 to 2011 Scope 1 emissions increased from almost to 249 to 269 million metric tons CO 2 e, while reported Scope 2 emission rose from about 9 to 20 million metric tons CO 2 e. The number of companies providing details on Scope 3 emissions has grown from 22 to 30 this year, reaching total of 332 million metric tons CO 2 e in reported Scope 3 emissions. (Fig. 4) With regards to Scope 1 emissions, the net increase of 11 million metric tons CO 2 e can be explained with the firsttime disclosure of emissions by Buzzi Unicem, with more than 21 million metric tons CO 2 e and Enel s increase of 7 million metric tons CO 2 e due to a an increase in electricity generation and a change in the fuel mix used. Scope 2 emissions have doubled, mainly due to an increasing We reaffirm that climate change is one of the greatest challenges of our time, and we express profound alarm that emissions of greenhouse gases continue to rise globally. The Future we want, United Nations (June 2012) number of companies disclosing their emissions. Having a glance at sectors, Utilities and Materials have the largest share of Scope 1 emissions, while Materials and Consumer Discretionary have the highest Scope 2 emissions. (Fig. 5) These results are not surprising considering that: the Utilities sector is made up of eight companies and that electricity is still mainly produced through a thermal production process, while companies representing the Materials sector are cement manufacturing companies whose production process 6 is characterized by high GHG emissions and that the Consumer Discretionary sector comprises 10 companies, 4 of which are industrials 7 and, therefore, have significant electricity consumption. Emissions reported by Italian companies also include their operations abroad, on the other hand, some foreign companies have operations and, therefore, emissions in Italy. The total quantity of Scope 1 emissions occurred in Italy (both by Italian and foreign companies) by respondents to CDP is equal to approximately 139 million metric tons CO 2 e; the total Italian emissions as reported by Ispra is 4 SCoPE 1, 2 and 3 EMISSIonS at a glance SCoPE 1 and 2 EMISSIonS by SECTor UTIL TCOM MAT FIN EGY IND CD IT million tco2e Scope 1 Scope 2 Scope 3 million tco2e Scope 1 1,6 9,8 1,3 3,8 1 0,90,9 0,9 Scope 2 154,2 59,3 52,4 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 14

15 equal to million metric tons CO 2 e, which implies that companies reporting through CDP (both in Italy and abroad) represent a significant 28% of the country s GHG emissions. (Fig. 6) Companies are engaged in carbon management, but how are emissions changing? Looking only at those companies (29) that reported their emissions last year too, total Scope 1 emissions decreased from 258 million metric tons CO 2 e to about 244 million metric tons CO 2 e; the change represents a 5% reduction on a year-to-year basis. Even if the percentage is relevant 9, it must be said that of the 13.6 million metric tons of CO 2 e reduction, only half of it can be related to emission reduction activities whilst the remaining is, as declared by companies, due to reduced production. As a consequence, under a future economic recovery scenario, the prospect of reducing companies emissions will become ever more difficult to achieve than it has been until now. It is therefore important that governments do not to step back on their declared intentions to fight climate change- as recently proved by the Italian Minister of Environment, Corrado Clini, who reiterated his objective to reduce Italy s GHG emissions by 25% by 2020 compared to Evidence so far has shown that companies are committed to measure and report, which is certainly a significant sign of the importance given to carbon management, however attention needs also to be given to how much of this effort is actually translating into the setting of targets by companies and their medium-long-term commitment to reduce their GHG emissions. 58% (25) of respondents declare to have an emission reduction target. They represent an increase of just 3 companies compared to last year s results despite having an increase of 30% (11) in the total number of disclosers. (Fig. 7) This indicates that new respondents are, on average, less mature from a carbon management perspective. This means that for the companies the potential for improvement is very high. Using this potential will ultimately be dependent on the company s ability to leverage on the opportunities that carbon management offers and which may add substantial business value. While the percentage of CDLI companies that set an emission reduction target is 100%, it reduces to 45% for non CDLI companies companies responded to CDP of which 3 referred to a parent or holding company s response. This percentage, as well as those provided in fi gure KS1, KS3 and KS4 incorporate these responses to provide full picture of response rate (with the fi nal fi gure taken on 30th June 2012), however, the remaining analysis in this report is based on the lower total of 43 which excludes these 3 companies 5. There has been a change in the way in which Scope 1 and 2 emissions reported under CCRF are calculated although this is not expected to cause a major change in reported emissions. In 2011 the Scope 1 and 2 fi gure was taken as Parent and subsidiaries under control of the parent, whereas in 2012 joint ventures are also included. Years refer to the reporting year, not to the year in which emissions occurred. Scope 3 data has only been included for 2012 due to changes in Scope 3 occurring between the 2011 and 2012 reporting cycles as a result of the publication of the Greenhouse Gas Protocol Scope 3 Standard 6. Emissions due to fuel combustion and to clinker production (limestone decarbonation: CaCO 3 becoming CaO and CO 2 ) 7. Brembo, Fiat, Landi Renzo, Pirelli 8. Ispra National Inventory Report 2012, includes Industrial and Energy; Agriculture and Waste are not included 9. For industrialized countries the IPCC stated that to prevent dangerous climate countries need to reduce emissions by 20% compared to 1990; the resulting percentage of reduction needs to be around 4% per annum on a compound basis between now and Companies may report multiple emission reductions targets; companies are only counted once in the statistics presented above and on fi gure 5,with exceptions of the statistics on absolute and intensity targets where companies that have both types of targets will be counted once in each type 6 ExTra boundary SCoPE 1 reported EMISSIon of ITaLIan and foreign CoMPanIES 7 number of respondents WITh an EMISSIon reduction TargET 10 NO YES MtCo 2 e 163 MtCo 2 e ~60% of reported scope I emissions

16 Most targets (40%) are set both as absolute and intensity terms; the most challenging are those set by Eni (80% emissions reduction from flaring, accounting for 56% of Scope 1 emissions, from 2007 to 2015) and Hera (20% Scope 1 and 40% Scope 2 reduction from 2009 to 2014). Corporate reduction targets disclosed to CDP are not nearly this radical: only five companies (Atlantia, Edison, Enel, UniCredit and STMicroelectronics) in fact, set a longterm target towards In addition 90% of reported targets will be achieved by 2015, of which 40% already by the end of Whilst the large majority of targets set by Italian companies only consider the next three years, the European Union is looking at 2050, hypothesizing a CO 2 reduction target of 80% compared to 1990 levels 11. Companies short term vision and the EU s long-term vision will eventually have to be aligned to really drive an impact on emissions. Utilities are the most proactive in setting emission reduction targets, with 7 companies out of the total 8 responding; only Iren in fact has not set targets while the other 7 companies set targets on Scope 1 emissions (Acea, Edison, Enel, Hera, Terna and Snam), Scope 2 (Acea and Hera) and Scope 3 (a2a). Most companies in the Industrial sector (4 out of 6: Ansaldo STS, Atlantia, Fiat Industrials and Finmeccanica) have also set targets. Overall, the majority of these companies declared to be in line with or ahead of meeting the target. (Fig. 8) The number of companies that provide incentives for the management of climate change issues continues to increase on a yearly basis. In 2012, the companies that declared to provide incentives for the attainment of climate change related targets is 23 out of 43 (compared to only 16 in 2011). Setting incentives is a strategy that has currently been put into practice by companies mainly in the Utility, Consumer Discretionary and Industrial sectors. In most cases companies that set incentives are the same that set reduction targets. There are two main trends that can be clearly identified from the analysis of the information reported. The first is that setting targets is becoming common practice: 58% of responding companies have a reduction target. Secondly, Italian companies are being very conservative in setting targets as shown by their short-termism (90% of reported targets will be achieved by 2015) and by the fact that many companies will have already met their objective even before reaching the target year. Although cautious about long-term commitments, Italian companies are very active in identifying and implementing emissions reduction initiatives: a great majority (81%) of companies declares to have active emission reduction initiatives and 77% (33 companies) have reported more than 180 emissions reduction initiatives, from which energy efficiency measures and low carbon energy together contribute more than 60% to the total number of initiatives. (Fig. 9) Nevertheless, as in last year s report, once again we see that the number of responding companies with reported emission reduction initiatives in place is higher than the number of companies with an emission reduction target. It thus seems that Italian responding companies, before committing formally to tangible targets, prefer to 8 TargET and InCEnTIvE by SECTor 12 9 reduction InITIaTIvES Responding companies Companies with target Ahead of or met target Companies that provide incentives % 9 9% % number of companies FIN CD EGY HC IND IT MAT TCOM % Energy efficiency 38 21% Low carbon 13% Transportation Process emission reduction Behavioral change Other 100% Total UTIL

17 implement emission reduction activities without setting a reduction goal beforehand. Energy efficiency initiatives are certainly considered as the most interesting ones, in particular by those companies that have a dedicated budget for these initiatives. Disposing of a dedicated budget is also the most common method to drive investments into carbon reductions, followed by compliance with regulation. (Fig. 10) It is quite surprising to observe that companies do not commonly use the lower return on investment analysis or marginal abatement cost (MAC) curve to select initiatives to be realized. This is interesting because these two methods would ensure that economic analysis of the investment is integrated into decision making processes; the MAC method in particular is based on the analysis of the marginal abatement cost of reducing one ton of CO 2 and, therefore, is very useful to compare different initiatives. The two most common methods used, dedicated budget for energy efficiency and compliance with regulation, suggest that companies are not commonly using comparative financial methods to drive investments. Actually, even after having implemented the reduction activities companies are not keen to analyse them on a quantitative basis as proved by percentages of initiatives for which financial analysis information is provided. (Fig.11) For those companies that provided information on their reduction activities, which are the expected results from the overall initiatives reported by Italian companies? A stunning estimate of 72 million metric tons CO 2 e savings, an annual monetary saving of approx. 630 million for a total investment of 3,600 million. These numbers are very significant, considering that resulting emission reductions will be equivalent to a 17% decrease in emissions of the energy sector in Italy million metric tons CO 2 e out of the 72 million metric tons CO 2 e are related to Enel s initiatives and, in particular, to low carbon installations that allowed the company to generate about 83 billion kwh from renewable sources in 2011, avoiding over 57 million metric tons CO 2 e. Looking at the payback period of the initiatives (information available for 122 out of 180 reported), for half of them it is shorter than 3 years, corroborating the fact that emission reductions can provide cost reductions and significant financial returns also in the short-term. (Fig. 12) Though the current information on the payback periods does not allow us to identify those initiatives that prove to be the most efficient, we have studied those initiatives for which companies provided information also on avoided emissions, to understand which are the most cost-effective and with the highest potential in terms of emission savings. Energy efficiency-related initiatives indicate to have the highest average avoided emissions and lowest payback periods. In fact, out of the 79 initiatives for which a 11. A Roadmap for moving to a competitive low carbon economy in 2050, COM (2011) Key for sector abbreviations: FIN= Financials; CD= Consumer Discretionary; EGY= Energy; HC= Health Care; IND= Industrials; IT= Information Technology; MAT= Materials; TCOM= Telecommunications Services; UTIL= Utilities 13. Ispra: energy sector emissions in 2010 equal to 415,73 MtCO 2 10 METhoDS used To DrIvE InvESTMEnTS 11 InforMaTIon ProvIDED on reduction InITIaTIvES Partnering with governments on techn. development Marginal abatement cost curve Other Compliance with regulation Budget for energy efficiency Budget for low carbon product R&D Budget for other reduction activities Provided Not Provided % 44% 35% 33% Lower ROI specification Employee engagement % 56% 65% 67% Internal finance mechanisms Internal incentives Financial optimization Internal price of carbon 0 Annual Monetary Saving Investments Payback Period Estimated CO 2 Saving 17

18 complete analysis could be performed, 27 are energy efficiency-related, representing 88% of the avoided emissions; 12 out of 27 energy efficiency initiatives have a payback period of less than one year. (Fig. 13) It is relevant to note that, out of 180 reported initiatives, only seven are related to behavioural change such as awareness campaigns for employees and campaigns to reduce paper consumption. None of the reported initiatives are linked to consumers behaviour throughout the products lifecycle. From our point of view, this is a lost opportunity. Indeed, emissions could be easily avoided in this way and initiatives that go in this direction have a short payback period and no major structural modification would be necessary. These initiatives could be pursued by many companies in different B2C sectors (Consumer Discretionary, Energy, Telecommunication, Utilities). Some studies 14, for instance, estimate consumers awareness on electricity usage to have a potential of reducing consumptions by up to 10%. Drivers for action A 30% increase in the number of respondents, 5% GHG emissions reduction on a year-to-year basis, 62 targets set but with a cautious approach, 3,600 million reported investments for an estimated emission reduction of 72 million metric tons CO 2 e: these are some of the results, but what is the real reason behind Italian companies decision to engage in carbon management? Expected opportunities and risks seem to be an important motivation. In fact, 81% of respondents are able to identify opportunities in climate change and 84% identify risks. The percentage of companies that identify opportunities has slightly decreased compared to last year (82% in 2011), whilst the share of companies that identify risks has increased significantly (76% in 2011). Regulation is the most common driver for both risks and opportunities, being identified by 74% of companies with regards to opportunities and by 72% concerning risks. Nevertheless, it is important to highlight that despite the increase in the number of respondents this year, the percentage of Italian companies that identify risks that derive from regulatory changes has decreased compared to last year and to a level even lower than what has been declared by Global 500 companies this year (83%). (Fig. 14) 26% of the risks identified and 28% of the opportunities are expected to materialize in a year s time. However, even if companies declare to be facing risks and opportunities now, the assessment of the potential financial implications that risks and opportunities can have on business operations is not at all a common practice. Couldn t customers perception simply be another key driver for companies actions against climate change? This question emerges considering that 28 out of 43 responding companies (63%) claim to provide products and services that help third parties avoid GHG emissions. Most of these companies can be found in the Utilities (8), Financials (5), Industrials (5) and Consumer Discretionary sectors (4). (Fig. 15) final considerations Looking at overall results, there is strong evidence that companies with very different focuses, businesses and clients are engaging in climate change management. If applied as a transversal approach involving different 12 reduction InITIaTIvES PaybaCk PErIoD 13 PoTEnTIaL of reduction InITIaTIvES % 122 Energy Efficiency Dimension: total avoided Low Carbon Tech emission Process Emission 27 22% <1 year 27% 1-2 years >3 years 100% Total average avoided per initiative (ktco 2 e) Payback period: < 1yrs #: 3 Tot MtCO2e: 1.1 Avg ktco2e: 371 Payback period: < 1yrs #: 12 Tot MtCO2e: 7.5 Avg ktco2e: 628 Payback period: 1-3 yrs #: 15 Tot MtCO2e: 5.3 Avg ktco2e: 357 Payback period: < 1yrs #: 2 Tot MtCO2e: 0.3 Avg ktco2e: 149 Payback period: > 3 yrs #: 6 Tot MtCO2e: 0.2 Avg ktco2e: 33 Payback period: > 3 yrs #: 12 Tot MtCO2e: 0.16 Avg ktco2e: 13 Payback period: > 3 yrs #: 25 Tot MtCO2e: Avg ktco2e: 3 Payback period: 1-3 yrs #: 4 Tot MtCO2e: Avg ktco2e: # initiatives 18

19 company processes such as strategy, organisation, investments, reporting, supply chain management and products offering, climate change management can create a huge potential for innovation and competitive advantage. Companies attention to climate change is very high, even during this period of economic downturn, investments in emission reductions initiatives have increased by 60%. The Italian Government, on its side, is working to further incentivize the shift towards a low carbon economy. Last July, for instance, an increase in the budget for incentives regarding renewables, for a total of 500 million per year, was approved. This comes on top of the 10 billion, over the next twenty years, that have already been allocated. Nevertheless, considering some of the main trends identified in this report (significant percentage of companies with targets, but mostly short-term; investments in emission reduction initiatives not identified on the basis of a financial analysis; extensive identification of risks and opportunities but without an assessment on the financial implications for the company) it seems as if responding companies engagement in climate change management is still missing a clear understanding of the business case and the innovation potential behind it. 15 companies indicating ThaT Their products and services help ThirD parties To avoid ghg emissions NO YES number of respondents Source: Defra, London s Climate change Action plan 14 PErCEnTagE of CoMPanIES reporting risks and opportunities 2012 respondents 2011 respondents Most common opportunity drivers 20% International agreement 74% opportunities risks Regulatory 72% Most common risk drivers 18% Fuel/Energy taxes 14% Products efficiency 79% 76% 12% Cap and trade schemes 15% Change in average temperature 44% Physical 63% 22% Change in precipitation extremes 9% Change in precipitation extremes 36% 61% 15% Change in temperature extremes 32% Reputation 63% Other climate-related development 60% 32% Reputation 29% Changing consumer behaviour 61% 58% 24% Changing consumer behaviour 19

20 Investor perspective The only constant in life is change. although this is commonplace it seems more important to remember today than ever. The world around is changing at a breath-taking speed: there will be more people living on this planet in 12 years time, with all the consequences for the planet s resources. The only constant in life is change. Although this is commonplace it seems more important to remember today than ever. The world around is changing at a breath-taking speed: there will be more people living on this planet in 12 years time, with all the consequences for the planet s resources. The internet is changing the way we communicate, dramatically. There are many more examples, some more obvious than others. Some of these developments are highly welcome but others (of course the more detrimental ones) are denied or ignored at best. This fits in perfectly with human psychology: how often are people yearning for the good old days? It is crystal clear: There is never a way back into the past whether it has proven a good or a bad time. We all have to adapt to the developments that have taken place so far and to those that lie ahead. This is just the application of the most successful strategy for the past billion years: evolution. solutions a quick-fix is at the top of the wish-list. It is also commonplace that there is no simple solution for a complex problem. This amongst others implies that the responsibility for such a solution is typically distributed across many shoulders. An excellent example for this is the issue of climate change, since everyone is part of the problem as well as part of the solution. This is especially true for companies and (institutional and private) asset owners. The asset management of Bank Sarasin therefore highly welcomes the efforts of the CDP to close the information gap. Having more and better information on how companies tackle climate change gives us valuable information about future risks and allows us to put responsibility into action. andreas knörzer Head Asset Management The latest example is the discovery of new oil sources (shale oil) and the impulse almost tangible relief of many of us that we can stick to our way of living after all. Cheap energy seems to be a remedy for many diseases as long as the side-effects are left out of the picture. It is worrying to see how especially in these turbulent and challenging times politics (and most of the public perception) has shifted its focus towards relaunching global economic growth. Due to the financial crisis many jobs are at risk no doubt. But instead of seizing the opportunity to look for integrated long-term 20