Carbon Disclosure Project Nordic Report 2009

Transcription

1 Carbon Disclosure Project Nordic Report 2009 On behalf of 475 investors with assets of $55 trillion Report written by: Carbon Disclosure Project Nordic Region Amanda Haworth Wiklund +46 (0) Carbon Disclosure Project (CDP) (0)

2 CDP Signatories 2009 Carbon Disclosure Project 2009 This report and all of the public responses from corporations are available to download free of charge from CDP Members 2009 ABRAPP - Associação Brasileira das Entidades Fechadas de Previdência Complementar Brazil Aegon N.V. Netherlands AIG Investments US APG Investments Netherlands ASN Bank Netherlands ATP Group Denmark Aviva Investors UK AXA Group France Bank of America Corporation US BBVA Spain BlackRock US BP Investment Management Limited UK Caisse de dépôt et placement du Québec Canada California Public Employees Retirement System US California State Teachers Retirement System US Calvert Group US Catholic Super Australia CCLA Investment Management Ltd UK CIBC Canada Daiwa Asset Management Co. Ltd Japan Essex Investment Management, LLC US Ethos Foundation Switzerland Folksam Sweden Fortis Investments Belgium Generation Investment Management UK Grupo Santander Brasil Brazil ING Netherlands KLP Insurance Norway Legg Mason, Inc. US Libra Fund, L.P. US London Pensions Fund Authority UK Mistra, Foundation for Strategic Environmental Research Sweden Mitsubishi UFJ Financial Group (MUFG) Japan Morgan Stanley Investment Management US National Australia Bank Limited Australia Neuberger Berman US Newton Investment Management Limited UK Northwest and Ethical Investments LP Canada Pictet Asset Management SA Switzerland Rabobank Netherlands Robeco Netherlands Russell Investments UK Schroders UK Second Swedish National Pension Fund (AP2) Sweden Sompo Japan Insurance Inc. Japan Standard Chartered PLC UK Sun Life Financial Inc. Canada Swiss Reinsurance Company Switzerland The RBS Group UK The Wellcome Trust UK Zurich Cantonal Bank Switzerland CDP Signatories institutional investors with assets of over US$55 trillion were signatories to the CDP 2009 information request dated 1st February 2009, including: Aachener Grundvermögen Kapitalanlagegesellschaft mbh Germany Aberdeen Asset Managers UK Acuity Funds Canada Addenda Capital Inc. Canada Advanced Investment Partners US Advantage Asset Managers (Pty) Ltd South Africa Aegon N.V. Netherlands Aeneas Capital Advisors US AGF Management Limited Canada AIG Investments US Alberta Investment Management Corporation (AIMCo) Canada Alberta Teachers Retirement Fund Canada Alcyone Finance France Allianz Group Germany Altshuler Shacham LTD Israel AMP Capital Investors Australia AmpegaGerling Investment GmbH Germany APG Investments Netherlands ARIA (Australian Reward Investment Alliance) Australia Arkitekternes Pensionskasse Denmark Artus Direct Invest AG Germany ASB Community Trust New Zealand ASN Bank Netherlands ATP Group Denmark Australia and New Zealand Banking Group Limited Australia Australian Ethical Investment Limited Australia AustralianSuper Australia Aviva Investors UK Aviva plc UK AXA Group France Baillie Gifford & Co. UK Bakers Investment Group Australia Banco Sweden Banco Bradesco S.A Brazil Banco de Galicia y Buenos Aires S.A. Argentina Banco do Brazil Brazil Banco Santander, S.A. Spain Banesprev Fundo Banespa de Seguridade Social Brazil Bank of America Corporation US Bank Sarasin & Co, Ltd Switzerland Bank Vontobel Switzerland BANKINTER S.A. Spain Barclays Group UK BayernInvest Kapitalanlagegesellschaft mbh Germany BBC Pension Trust Ltd UK BBVA Spain Bedfordshire Pension Fund UK Beutel Goodman and Co. Ltd Canada BlackRock US Blue Marble Capital Management Limited Canada BMO Financial Group Canada BNP Paribas Investment Partners France Boston Common Asset Management, LLC US BP Investment Management Limited UK Brasilprev Seguros e Previdência S/A. Brazil British Columbia Investment Management Corporation (bcimc) Canada BT Financial Group Australia BT Investment Management Australia Busan Bank South Korea CAAT Pension Plan Canada Caisse de dépôt et placement du Québec Canada Caisse des Dépôts France Caixa de Previdência dos Funcionários do Banco do Nordeste do Brasil (CAPEF) Brazil Caixa Econômica Federal Brazil Caixa Geral de Depósitos Portugal California Public Employees Retirement System US California State Teachers Retirement System US California State Treasurer US Calvert Group US Canada Pension Plan Investment Board Canada Canadian Friends Service Committee (Quakers) Canada CAPESESP Brazil Capital Innovations, LLC US CARE Super Pty Ltd Australia Carlson Investment Management Sweden Carmignac Gestion France Catherine Donnelly Foundation Canada Catholic Super Australia Cbus Superannuation Fund Australia CCLA Investment Management Ltd UK Central Finance Board of the Methodist Church UK Ceres, Inc. US Cheyne Capital Management (UK) LLP UK CI Mutual Funds Signature Advisors Canada CIBC Canada Clean Yield Group, Inc. US ClearBridge Advisors, Socially Aware Investment US Close Brothers Group plc UK Colonial First State Global Asset Management Australia Comite syndical national de retraite Bâtirente Canada Commerzbank AG Germany CommInsure Australia Companhia de Seguros Aliança do Brasil Brazil Compton Foundation, Inc. US Connecticut Retirement Plans and Trust Funds US Co-operative Financial Services (CFS) UK Corston-Smith Asset Management Sdn. Bhd. Malaysia Crédit Agricole Asset Management France Credit Suisse Switzerland Daegu Bank South Korea Daiwa Securities Group Inc. Japan DB Advisors Deutsche Asset Management Germany DEFO Deutsche Fonds für Immobilienvermögen GmbH Germany DEGI Deutsche Gesellschaft für Immobilienfonds mbh Germany Deka FundMaster Investmentgesellschaft mbh Germany Deka Investment GmbH Germany DekaBank Deutsche Girozentrale Germany Deutsche Bank Germany Deutsche Postbank Privat Investment Kapitalanlagegesellschaft mbh Germany Development Bank of Japan Japan Development Bank of the Philippines (DBP) Philippines Dexia Asset Management France DnB NOR ASA Norway Domini Social Investments LLC US DPG Deutsche Performancemessungs- Gesellschaft für Wertpapierportfolio mbh Germany East Sussex Pension Fund UK Economus Instituto de Seguridade Social Brazil ELETRA Fundação Celg de Seguros e Previdência Brazil Environment Agency Active Pension fund UK Epworth Investment Management UK Erste Group Bank AG Austria Essex Investment Management, LLC US Ethos Foundation Switzerland Eureko B.V. Netherlands Eurizon Capital SGR Italy Evangelical Lutheran Church in Canada Pension Plan for Clergy and Lay Workers Canada Evli Bank Plc Finland F&C Management Ltd UK Faelba Brazil FAELCE Fundação Coelce de Seguridade Social Brazil Fédéris Gestion d Actifs France First Affirmative Financial Network US First Swedish National Pension Fund (AP1) Sweden FirstRand Ltd. South Africa Fishman & Co. Israel Five Oceans Asset Management Pty Limited Australia Florida State Board of Administration (SBA) US Folksam Sweden Fondaction CSN Canada Fonds de Réserve pour les Retraites FRR France Fortis Bank Nederland Netherlands Fortis Investments Belgium Forward Management, LLC US Fourth Swedish National Pension Fund, (AP4) Sweden Frankfurter Service Kapitalanlagegesellschaft mbh Germany FRANKFURT-TRUST Investment Gesellschaft mbh Germany Franklin Templeton Investment Services Gmbh Germany Frater Asset Management South Africa Friends Provident UK Front Street Capital Canada 2 3

3 CDP Signatories 2009 Fukoku Capital Management Inc Japan Fundação AMPLA de Seguridade Social Brasiletros Brazil Fundação Atlântico de Seguridade Social Brazil Fundação Banrisul de Seguridade Social Brazil Fundação CEEE de Seguridade Social ELETROCEEE Brazil Fundação Codesc de Seguridade Social FUSESC Brazil Fundação de Assistência e Previdência Social do BNDES FAPES Brazil Fundação Forluminas de Seguridade Social FORLUZ Brazil Fundação Promon de Previdência Social Brazil Fundação São Francisco de Seguridade Social Brazil Fundação Vale do Rio Doce de Seguridade Social VALIA Brazil FUNDIÁGUA - Fundação de Previdência da Companhia de Saneamento e Ambiental do Distrito Federal Brazil Gartmore Investment Management Ltd UK Generation Investment Management UK Genus Capital Management Canada Gjensidige Forsikring Norway GLG Partners LP UK Goldman Sachs & Co. US Governance for Owners UK Government Employees Pension Fund ( GEPF ), Republic of South Africa South Africa Green Cay Asset Management Bahamas Green Century Funds US Groupe Investissement Responsable Inc. Canada GROUPE OFI AM France GrowthWorks Capital Ltd. Canada Grupo Banco Popular Spain Grupo Santander Brasil Brazil Gruppo Monte Paschi Italy Guardian Ethical Management Inc Canada Guardians of New Zealand Superannuation New Zealand Hang Seng Bank Hong Kong HANSAINVEST Hanseatische Investment GmbH Germany Harrington Investments US Hastings Funds Management Limited Australia Hazel Capital LLP UK Health Super Fund Australia Helaba Invest Kapitalanlagegesellschaft mbh Germany Henderson Global Investors UK Hermes Fund Managers UK HESTA Super Australia Hospitals of Ontario Pension Plan (HOOPP) Canada HSBC Holdings plc UK Hyundai Marine & Fire Insurance Co, Ltd South Korea IDBI Bank Limited India Ilmarinen Mutual Pension Insurance Company Finland Impax Group plc UK Industrial Bank China Industry Funds Management Australia Infrastructure Development Finance Company Ltd. (IDFC) India ING Netherlands Inhance Investment Management Inc Canada Insight Investment Management (Global) Ltd UK Instituto de Seguridade Social dos Correios e Telégrafos- Postalis Brazil Instituto Infraero de Seguridade Social INFRAPREV Brazil Insurance Australia Group Australia Internationale Kapitalanlagegesellschaft mbh Germany Investec Asset Management UK Itaú Unibanco Banco Múltiplo S.A. Brazil J.P. Morgan Asset Management US Janus Capital Group Inc. US Jarislowsky Fraser Limited Canada Jubitz Family Foundation US Jupiter Asset Management UK K&H Investment Fund Management/K&H Befektetési Alapkezelö Zrt Hungary KB Kookmin Bank South Korea KBC Asset Management NV Belgium KCPS and Company Israel KDB Asset Management Co., Ltd. South Korea Kennedy Associates Real Estate Counsel, LP US KfW Bankengruppe Germany Kibo Technology Fund South Korea KLP Insurance Norway Korea Investment Trust Management Co., Ltd. South Korea KPA Pension Sweden Kyobo Investment Trust Management Co., Ltd. South Korea La Banque Postale Asset Management France La Financiere Responsable France LBBW Landesbank Baden-Württemberg Germany LBBW Asset Management GmbH Germany LD Lønmodtagernes Dyrtidsfond Denmark Legal & General Group plc UK Legg Mason, Inc. US Lend Lease Investment Management Australia Libra Fund, L.P. US Light Green Advisors, LLC US Living Planet Fund Management Company S.A. Switzerland Local Authority Pension Fund Forum UK Local Government Superannuation Scheme Australia Local Super SA-NT Australia Lombard Odier Darier Hentsch & Cie Switzerland London Pensions Fund Authority UK Lothian Pension Fund UK Macif Gestion France Macquarie Group Limited Australia Magnolia Charitable Trust US Maine State Treasurer US Man Group plc UK Maple-Brown Abbott Limited Australia Marc J. Lane Investment Management, Inc. US Maryland State Treasurer US McLean Budden Canada MEAG Munich Ergo Asset Management GmbH Germany MEAG Munich Ergo Kapitalanlagegesellschaft mbh Germany Meeschaert Gestion Privée France Meiji Yasuda Life Insurance Company Japan Merck Family Fund US Mergence Africa Investments (Pty) Limited South Africa Meritas Mutual Funds Canada Metzler Investment Gmbh Germany Midas International Asset Management South Korea Miller/Howard Investments US Mirae Investment Asset Management South Korea Mistra, Foundation for Strategic Environmental Research Sweden Mitsubishi UFJ Financial Group (MUFG) Japan Mitsui Sumitomo Insurance Co.,Ltd. Japan Mizuho Financial Group, Inc. Japan Mn Services Netherlands Monega Kapitalanlagegesellschaft mbh Germany Morgan Stanley Investment Management US Motor Trades Association of Australia Superannuation Fund Pty Ltd Australia MP Pension Pensionskassen for Magistre og Psykologer Denmark Munich Re Group Germany Mutual Insurance Company Pension-Fennia Finland Natcan Investment Management Canada Nathan Cummings Foundation, The US National Australia Bank Limited Australia National Bank of Canada Canada National Bank of Kuwait Kuwait National Grid Electricity Group of the Electricity Supply Pension Scheme UK National Grid UK Pension Scheme UK National Pensions Reserve Fund of Ireland Ireland Natixis France Needmor Fund US Nest Sammelstiftung Switzerland Neuberger Berman US New Alternatives Fund Inc. US New Jersey Division of Investment US New Mexico State Treasurer US New York City Employees Retirement System US New York City Teachers Retirement System US New York State Common Retirement Fund (NYSCRF) US Newton Investment Management Limited UK NFU Mutual Insurance Society UK NH-CA Asset Management South Korea Nikko Asset Management Co., Ltd. Japan Nissay Asset Management Corporation Japan Nordea Investment Management Sweden Norfolk Pension Fund UK Norges Bank Investment Management (NBIM) Norway Norinchukin Zenkyouren Asset Management Co., Ltd Japan North Carolina State Treasurer US Northern Ireland Local Government Officers Superannuation Committee (NILGOSC) UK Northern Trust US Northwest and Ethical Investments LP Canada Oddo & Cie France Old Mutual plc UK OMERS Administration Corporation Canada Ontario Teachers Pension Plan Canada Opplysningsvesenets fond (The Norwegian Church Endowment) Norway Oregon State Treasurer US Orion Asset Management LLC US Pax World Funds US PBU Pension Fund of Early Childhood Teachers Denmark Pension Fund for Danish Lawyers and Economists Denmark Pension Protection Fund UK Pensionskassen for Jordbrugsakademikere og Dyrlæger Denmark PETROS The Fundação Petrobras de Seguridade Social Brazil PFA Pension Denmark PGGM Netherlands Phillips, Hager & North Investment Management Ltd. Canada PhiTrust Active Investors France Pictet Asset Management SA Switzerland Pioneer Alapkezelö Zrt. Hungary Pioneer Investments Kapitalanlagegesellschaft mbh Germany PKA Denmark Portfolio 21 Investments US Portfolio Partners Australia Porto Seguro S.A. Brazil PPM Premiepensionsmyndigheten Sweden PRECE Previdência Complementar Brazil PREVI Caixa de Previdência dos Funcionários do Banco do Brasil Brazil Principle Capital Partners Limited UK PSP Investments Canada QBE Insurance Group Limited Australia Q Capital Partners South Korea Railpen Investments UK Rathbones/Rathbone Greenbank Investments UK Real Grandeza Fundação de Previdência e Assistência Social Brazil Rei Super Australia Rhode Island General Treasurer US RLAM UK Robeco Netherlands Rose Foundation for Communities and the Environment US Royal Bank of Canada Canada RREEF Investment GmbH Germany Russell Investments UK SAM Group Switzerland Sanlam Investment Management South Africa Santa Fé Portfolios Ltda Brazil Sauren Finanzdienstleistungen Germany Savings & Loans Credit Union (S.A.) Limited. Australia Schroders UK Scotiabank Canada Scottish Widows Investment Partnership UK SEB Sweden SEB Asset Management AG Germany Second Swedish National Pension Fund (AP2) Sweden Seligson & Co Fund Management Plc Finland Sentinel Funds US SERPROS Fundo Multipatrocinado Brazil Service Employees International Union Benefit Funds US Seventh Swedish National Pension Fund (AP7) Sweden Shinhan Bank South Korea Shinhan BNP Paribas Investment Trust Management Co., Ltd South Korea Shinkin Asset Management Co., Ltd Japan Shinsei Bank Limited Japan Siemens Kapitalanlagegesellschaft mbh Germany Signet Capital Management Ltd Switzerland Skandia Nordic Division Sweden SMBC Friend Securities Co., LTD Japan Smith Pierce, LLC US SNS Asset Management Netherlands Social(k) US Société Générale France Sompo Japan Insurance Inc. Japan Souls Funds Management Limited Australia SPF Beheer bv Netherlands Sprucegrove Investment Management Ltd Canada Standard Chartered PLC UK Standard Life Investments UK State Street Corporation US Statewide Superannuation Trust Australia Storebrand ASA Norway Strathclyde Pension Fund UK Stratus Group Brazil Sumitomo Mitsui Banking Corporation Japan Sumitomo Mitsui Card Company, Limited Japan Sumitomo Mitsui Finance & Leasing Co., Ltd Japan Sumitomo Mitsui Financial Group Japan Sumitomo Trust & Banking Japan Sun Life Financial Inc. Canada Superfund Asset Management GmbH Germany Svenska Kyrkan, Church of Sweden Sweden Swedbank Sweden Swiss Reinsurance Company Switzerland Swisscanto Holding AG Switzerland Syntrus Achmea Asset Management Netherlands TD Asset Management Inc. and TDAM USA Inc. Canada Teachers Insurance and Annuity Association College Retirement Equities Fund (TIAA-CREF) US Tempis Capital Management South Korea Terra Forvaltning AS Norway TfL Pension Fund UK The Bullitt Foundation US The Central Church Fund of Finland Finland The Collins Foundation US The Co-operators Group Ltd Canada The Daly Foundation Canada The Dreyfus Corporation US The Japan Research Institute, Limited Japan The Joseph Rowntree Charitable Trust UK The Local Government Pensions Insitution (LGPI) (keva) Finland The Presbyterian Church in Canada Canada The RBS Group UK The Russell Family Foundation US The Shiga Bank, Ltd. Japan The Standard Bank of South Africa Limited South Africa The Sustainability Group at the Loring, Wolcott & Coolidge Office US The Travelers Companies, Inc. US The United Church of Canada General Council Canada The University of Edinburgh Endowment Fund UK The Wellcome Trust UK Third Swedish National Pension Fund (AP3) Sweden Threadneedle Asset Management UK Tokio Marine & Nichido Fire Insurance Co., Ltd. Japan Toronto Atmospheric Fund Canada Trillium Asset Management Corporation US Triodos Bank Netherlands TrygVesta Denmark UBS AG Switzerland Unibanco Asset Management Brazil UniCredit Group Italy Union Asset Management Holding AG Germany Union Investment Institutional GmbH Germany Union Investment Privatfonds GmbH Germany Union Investment Service Bank AG Germany Union PanAgora Asset Management GmbH Germany UniSuper Australia Unitarian Universalist Association US United Methodist Church General Board of Pension and Health Benefits US United Nations Foundation US Universal Investment Gesellschaft mbh Germany Universities Superannuation Scheme (USS) UK Vancity Group of Companies Canada VERITAS SG INVESTMENT TRUST GmbH Germany Vermont State Treasurer US VicSuper Pty Ltd Australia Victorian Funds Management Corporation Australia Visão Prev Sociedade de Previdencia Complementar Brazil Waikato Community Trust Inc New Zealand Walden Asset Management, a division of Boston Trust and Investment Management Company US Warburg-Henderson Kapitalanlagegesellschaft für Immobilien mbh Germany West Yorkshire Pension Fund UK WestLB Mellon Asset Management (WMAM) Germany Westpac Investment Management Australia Winslow Management Company US WOORI BANK South Korea YES BANK Limited India York University Pension Fund Canada Youville Provident Fund Inc. Canada Zurich Cantonal Bank Switzerland 4 5

4 Contents CDP Signatories Executive summary 8 2 Foreword 10 Connie Hedegaard Danish Minister for Climate and Energy 3 CDP Nordic Region Report 11 Amanda Haworth Wiklund Director CDP Nordic region 4 Carbon Disclosure Leadership Index 12 5 Nordic Company Responses 15 6 Risks, Opportunities and Emissions 24 by Industry Group Will setting a price on CO 2 emissions 36 solve the long-term climate problem? Martin Gavelius, Director Energy & Utilities - Climate Change Services Öhrlings PricewaterhouseCoopers AB 7 Overview of CDP 38 8 Appendix 1: 41 CDLI Scores and Emissions 9 Appendix 2: 46 CDP 2009 Questionnaire Jens Olsen's clock on the Copenhagen Town Hall shows Can COP 15 determine last-minute measures to prevent irreversible, disastrous global climate change? Cover Photo: Thomas Lekdorf 6 7

5 1 Executive Summary 1 Executive Summary Response rates For the third year in a row the number of Nordic companies responding to the CDP information request increased, from 110 in 2008 to 128 in With 196 companies in the Nordic sample the overall response rate increased by 6% to 65% for CDP The higher response rate can to some extent be attributed to the fact that 19 companies declined to participate last year but completed responses for CDP this year. A consideration of responses from a geographic perspective shows that Sweden has the highest response rate of 85% followed by Denmark and Finland (68%), and Norway (35%). The Norwegian response rate is surprisingly low and efforts will be made to break the downward trend. Response rates also vary from sector to sector. The Health Care sector performed very well, with all 13 companies responding to CDP Other high responding sectors are from Materials, Consumer Discretionary, and Telecommunications & IT with response rates of 87%, 80% and 75% respectively. Lower response rates came from the Energy & Utilities (50%) and Financials (56%) sectors. Transparency Responding companies can choose to make their responses public or nonpublic when submitting their responses to CDP. 70% of all Nordic companies submitted public responses. This figure has been stable throughout the last three years. For 2009 transparency rates were similar across all four Nordic countries. There are cross-industry discrepancies on public disclosure. Interestingly, the Energy & Utilities sector had the lowest response rate but the highest public disclosure rate. Other sectors with high rates of public responses are Materials (85%) and Industrial (75%), both carbon intensive sectors. It is both interesting and reassuring to find the top three CO 2 emitting sectors 8 coming out best in class in terms of public disclosure. Risks and Opportunities In the Materials sector, which includes paper & forest and metals & mining firms, the entire sector identifies increasing greenhouse gas (GHG) regulation as a risk, as it could potentially lead to higher energy costs. On the other hand, companies in this sector see climate change-related opportunities in bio-fuels and energy efficiency solutions. Companies in the Energy & Utilities sector identify regulatory risks as potentially leading to increased energy costs once the new EU climate agreement starts in This sector identifies climate change-related opportunities in renewable energy. The Industrials sector is the largest, with 44 responding companies. Companies in this sector see climate change risks throughout their value chain. Responses indicate that companies are preparing for climate change by putting energy reduction plans in place. Emissions accounting Companies report both direct and indirect emissions to CDP (Scopes 1, 2, and 3). 51% of overall Scope 1 emissions come from the Industrials sector, where the transportation industry accounts for 43% of these. The other carbon-intensive sectors, Energy & Utilities and Materials, emit 28% and 20% of Scope 1 emissions respectively. The remaining industry sectors contribute marginally to Scope 1 emissions. Not surprisingly, companies in the Energy & Utilities sector have the highest average Scope 1 emissions. The sector consists of relatively few large companies, and the average Scope 1 emissions figure for the sector is almost metric tonnes CO 2. The EU Emissions Trading Scheme (EU ETS) is identified as both a risk and an The overall response rate increased by 6% to 65% for CDP % of all reported Scope 1 emissions came from the Industrials sector. opportunity by responding companies. 86% of the companies in the Energy & Utilities sector either operate or have ownership of facilities covered by the EU ETS. The Materials sector comes next with 85%. In total 24% of the surveyed sample is covered by this scheme. A new CDP question for 2009 asked corporations how, through the use of their products and services, other companies can avoid or reduce emissions. Companies in the Industrials sector, and within the Commercial services & supplies industry, are investing in renewable energy solutions and IT-services for energy efficiency to take steps toward achieving this goal. Emissions Reduction Plans One important CDP question asks what companies are doing to mitigate GHG emissions. 80% of the responding companies answered that they have a GHG emissions and/or energy reduction plan in place. Although 20% of responding companies do not currently have reductions plans in place, 72% of these companies are currently engaged in the process of defining them. Governance 77% of all responding companies say that either a board committee or other executive body has overall management responsibility for handling climate change. About one third indicate that they have incentive systems in place for individuals with climate change responsibilities. 59% of responding companies report engagement with policymakers on climate change related issues. Report findings show variation in levels of engagement across sectors, with the carbon intensive sectors reporting the highest levels of policymaker engagement (Materials 92% and Energy & Utilities 86%). Carbon Disclosure Leaders The Carbon Disclosure Leadership Index (CDLI) has been developed to highlight the companies that provide the most comprehensive responses to the CDP information request. The CDLI 2009 includes the top 10% or 21 leading Nordic companies who have provided inclusive responses. The main objective of the CDLI is to identify leaders and to inspire other Nordic companies to participate and commit to full carbon disclosure. It is important to realise that the index is based on self-reported and in many cases non-verified company responses, and the company score is not a guarantee for actual company performance. Companies representing industry sectors Energy & Utilities, Health Care, and Materials are well positioned in this year s CDLI. 80% of the responding companies answered that they have a GHG emission and/or energy reduction plan in place. 9

6 2 Foreword by Connie Hedegaard Danish Minister for Climate and Energy 3 CDP Nordic region report Amanda Haworth Wiklund, Director CDP Nordic region The structure of this year s Nordic Report has shifted from giving national comparisons to making sector comparisons. We trust that this will prove of greater benefit to investors. * For the third year a number of the largest listed companies in the Nordic region were approached on behalf of the signatory investors. The selection was increased from 190 for CDP 2008 to 200 for CDP All Icelandic corporations were removed due to the collapse of the country s economy. Some companies have been excluded from the stock exchange due to closures and mergers. There were 22 newcomers selected from Denmark, Norway and Sweden that received the information request for the first time. The CDP process is now a familiar figure on the Nordic corporate landscape. It is gradually becoming recognised as a valuable tool for assessing how to survive in the gathering climate awareness of governments and society. For the first time workshops were offered in each capital city in early March to offer assistance in completing the information request. They were all well attended with an average of 85 participants including presenters from industry, accountancy and consultancy. Some companies not in the CDP investor selection attended because they realised a businessto-business customer might contact them via the Supply Chain Programme. Many corporations say they recognise how the process of completing the questionnaire provides an important guide to re-structuring their activities towards a low carbon economy. Perhaps due to the intense focus of COP15, the Danish response rate rose significantly to 68% from 52% last year, while the Swedes did extremely well at 85% (80%). Finland had a good increase at 68% (59%), but Norway dropped for the second year and reached a surprisingly low 35% (38%). Quantity in no way reflects quality. Yet we do notice impressive efforts by some companies to improve the quality of their reporting as to content and details. Nordic Partners ATP, Denmark, Folksam, Sweden KLP, Norway Nordic signatories Denmark: Arkitekternes Pensionskasse, ATP Group, Lønemottagerned dyrtidsfond, MP Pension, PBU- Pension Fund for Early Childhood Teachers, Pension fund for Danish lawyers and Economics, Pensionskassen for Jordbrugsakademikere og Dyrlæger, PFA Pension, PKA, TrygVesta Finland: Evli Bank Plc, Illmarinen Mutual Pension Insurance, Mutual Insurance Company Pension Fennia, Seligson&Co Fund Mangement, The Central Church Fund of Finland, The Local Government Pension Institution Norway: DnBNor ASA, Gjensidige Forsikring, KLP Insurance, Norges Bank Investment Managagement (NBIM), Opplysningsvesenets fond, Storebrand ASA, Terra forvaltning AS Sweden: AP1, AP2, AP3, AP4, AP7, Banco, Carlson Investment Management, Folksam, KPA Pension, Mistra Foundation, Nordea Investment Management, PPM Premiepensionsmyndigheten, SEB, Skandia Nordic Division, Svenska kyrkan, Swedbank 10 * We remind investors that this report offers a statistical overview and conclusions drawn by the reporting team from the answers provided by all companies that have allowed their responses to be public (90). To read those responses not publicly available (38) it is necessary to be a signatory institutional investor to the CDP process. For other methods of access a fee is required. For details please contact our London office. 11

7 4 CDLI Leadership Index 4 CDLI Leadership Index Table 1: Top CDLI Scores and Ranking Company Country Parent sector CDLI Score CDLI Ranking Norske Skogindustrier Norway Materials 84 1 This year s top achievers were Norske Skogindustrier (Materials) 84 points, Hakon Invest AB (Consumer Discretionary) 83 points, and Gunnebo (Industrials) 81 points. These three companies had already featured on CDLI in CDP 2008 or CDP The Carbon Disclosure Leadership Index (CDLI) has been developed to highlight the companies that provided the most comprehensive response to the CDP information request. The CDLI includes 21 leading Nordic companies that all provide detailed answers. In 2009 the CDLI will be presented as one listing of companies from all industry sectors. In previous years companies were grouped in carbon-intensive and low-carbon sectors. The CDLI indicates the best disclosure performers for the CDP 2009 Nordic report. These leading companies from all sectors give valuable insights to investors on how to integrate climate change risks and opportunities in business practice. The list is made up of the leading ten percent of companies that have agreed to make their answers available to the public. Company answers are scored according to a thorough methodology (available at and weighted to a 100 point scale. It is important for investors and other readers to realize that the index is based on self-reported and in many cases non-verified company responses. The company score is not a guarantee for actual company performance. CDLI scoring does not take into account or judge different levels of emissions, target setting, and reduction achievements. The main objective of CDLI is to identify leaders and at the same time invite other Nordic 200 companies to commit to full carbon disclosure. A full listing of CDLI scores and the levels of disclosure of the respondents can be viewed in Appendix I. Some companies are classified as NP, not public which means that they have responded to the information request but they have asked to not have their answers publically disclosed. Appendix II gives a summary of the CDP questionnaire. The reason for not dividing the CDLI into carbon-intensive and low-carbon companies is that such a distinction does not feel necessary any more. The impact from climate change is now a reality in all industry sectors and is not exclusive to the carbonintensive. The CDP methodology has consequently been developed so that all types of sector can be represented in one index. In this year s CDLI the carbon intensive sectors (Energy & Utilities, Health Care, Industrials, and Materials) are represented by 16 out of 21 companies (76%). There is an over representation in CDLI for carbonintensive sectors since 60% of all 128 responding companies fall into these sectors. The average score for the 21 companies in the CDLI is 76 points, compared to 55 points which represent the average score for all respondents from the Nordic sample. In table 1 showing the CDLI by country, we can see that the distribution broadly follows the representation of respondents by country. Companies from Sweden and Norway are slightly under-represented and consequently companies from Denmark and Finland slightly overrepresented. In table 2 showing CDLI per sector we see that Financials are clearly under-represented which has also been the case historically. Consequently, Energy & Utilities, Health Care, and Materials are three sectors that are over represented in CDLI and indicate a higher degree of disclosure rates from these sectors. Hakon Invest AB Sweden Consumer Discretionary 83 2 Gunnebo Sweden Industrials 81 3 Fortum Finland Utilities 79 4 Vestas Wind Systems A/S Denmark Industrials 78 5= Nokia Group Finland Telecommunications 78 5= Q-Med AB Sweden Health Care 77 7 M-real Corporation Finland Materials 76 8= Lundbeck A/S Denmark Health Care 76 8= Lundin Petroleum Sweden Energy 76 8= Electrolux Sweden Consumer Staples 76 8= Scania Sweden Industrials 76 8= SAAB Sweden Industrials 75 13= Danisco A/S Denmark Consumer Staples 74 14= Outotec Oyj Finland Industrials 74 14= TORM AS Denmark Industrials 73 16= Novo Nordisk Denmark Health Care 73 16= Sandvik AB Sweden Industrials 73 16= Storebrand ASA Norway Financials 72 19= UPM-Kymmene Corporation Finland Materials 72 19= 12 13

8 The main objective of CDLI is to identify leaders and at the same time invite other Nordic 200 companies to commit to full carbon disclosure. This year s top achievers were Norske Skogindustrier (Materials) 84 points, Hakon Invest AB (Consumer Discretionary) 83 points, and Gunnebo (Industrials) 81 points. These three companies had already featured in CDLI in CDP 2008 or CDP These scores reflect a high ambition of climate change disclosure addressing all sections of the questionnaire. From their responses, it appears climate change risks and opportunities are identified and are an integrated part of their business strategy. These companies show determination and leadership in the transition to a lowcarbon economy. Table 2: CDLI company numbers by country Top-20 by country % of Top-20 by country CDLI by country % of CDLI by country Sweden 8 40% 57 45% Norway 2 10% 18 14% Denmark 5 25% 27 21% Finland 5 25% 26 20% % % Table 3: CDLI company numbers by sector Top-20 by sector % of top-20 by sector Companies in CDLI % of companies in CDLI Consumer Discretionary 1 5% 12 9% Consumer staples 2 10% 10 8% Energy & Utlilities 2 10% 7 5% Financials 1 5% 20 16% Health Care 3 15% 13 10% Industrials 7 35% 44 34% Materials 3 15% 13 10% Telecommunications & IT 1 5% 9 7% % % 5 Response rates The questionnaire was sent to the 196 largest listed companies in the Nordic region, made up of Denmark, Finland, Norway and Sweden, and including 11 companies from the FTSE Global Equities Index Series (the Global 500 ). Appendix I shows the complete response status for all companies. Overall, 128 companies (65%) responded to the questionnaire. This represents an increase both in the number of responding companies and in the response rate from 2008 (110 companies and a response rate of 58%). Figure 1: Nordic responses in 2007, 2008 and 2009 Answered Questionnaire Provided Information Declined to Participate No Response Nordic Company Responses Twenty companies (10%) declined to participate in this year s survey compared with forty comapanies (20%) in 2008, and 46 companies (23%) failed to provide a response. Two companies (1% of all companies approached) provided other forms of information. Of the companies that answered the questionnaire in 2008, four declined to participate or provided no response to this year s survey. Nineteen companies that declined to participate or gave no reply in 2008 provided responses in See table 1 for a list of these firms. 128 Table 1 Companies that answered the questionnaire in 2008 but declined to participate or failed to respond in 2009 Aker ASA Melker Schörling AB REC Group Sponda Plc Companies that declined to participate in 2008 but answered the questionnaire for 2009 A.P. Moller Maersk Atrium Ljungberg AB DSV A/S Elekta GN Store Nord A/S Hafslund ASA Kone Oyj Konecranes Modern Times Group MTG AB Nokian Tyres Group Outotec Oyj Peab Pronova BioPharma ASA Rockwool International A/S TietoEnator Topdanmark Transatlantic William Demant Holdings Number of companies CDP 2009 CDP 2008 CDP * We remind investors that this report offers a statistical overview and conclusions drawn by the reporting team from the answers provided by all companies that have allowed their responses to be public (90). To read those responses not publicly available (38) it is necessary to be a signatory institutional investor to the CDP process. For other methods of access a fee is required. For details please contact our London office. 15

9 5 CDP Nordic Region Report In addition to the companies approached by the investors, a few companies have volunteered responses. These companies will not be scored according to the CDLI methodology, and are not mentioned in the analysis, but their responses are available online. The companies in question are: Skandia Insurance Company Ltd., Sweden, SOL Pesulapalvelut Oy, Finland, Wihlborgs Fastigheter AB, Sweden. Figure 2 analyses responses and response rates per country in the Nordic region. The corresponding response rate for Global 500 companies 2009 is 81%. As with earlier CDP studies, the largest number of companies came from Sweden, which also had the highest response rate (85%). Finland and Denmark provide a 68% response rate for Norwegian companies stand out with a lower response rate than other Nordic countries. Their 35% response rate for 2009 is even lower than their 38% response rate in The downward trend among Norwegian companies response rate is worrying. As we are grateful for those who have made an effort to respond, CDP will increase its efforts in welcoming additional Norwegian carbon disclosure respondents. We find no reason why these figures should vary significantly between countries in this region. Figures 3a and 3b analyses responses and response rates per sector and nationality. There are significant differences in the number of responses and response rates across sectors. The Industrials sector has the highest number of responses (44). It is also the sector with one of the lowest response rates overall (59%), with only Energy & Utilities and Financials being lower (50% and 56% respectively). The highest response rates come from Health Care with an impressive 100%, followed by Materials (87%) and Consumer Discretionary (80%). Figure 2: Response rate per country over time 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% CDP 2007 CDP 2008 CDP 2009 Sweden Finland Norway Denmark Figure 3a: Response rate per sector over time 100% 90% 80% 70% 60% 50% 40% 30% 20% Figure 3b: Number of responses by industry sector and country Telecom & IT Materials 1 Industrials Health Care Financials Energy & Utilities Consumer Staples Consumer Discretionary Demark Finland Norway Sweden Number of companies Figure 4: Response rates over time in the Industrials sector Capital Goods Commercial Services and Supplies Transportation Industrials Total 18 As with earlier CDP studies, the largest number of companies came from Sweden, which also had the highest response rate. A change from earlier CDP studies is a reduction in the number of sectors from ten to eight, in order to reduce the risk of exaggerating randomly generated results. The Utilities sector (with one company) was merged with the Energy sector (13 companies) and the Information Technology sector (3 companies) was merged with the Telecommunications sector (9 companies). However, the number of companies in many sectors is still too small to permit any far-reaching conclusions, especially when breaking down the sample by both country and sector. In Figure 4 the response rates in the Industrials sector are analysed in more depth. The industrials sector is broken down into three subsectors: Capital Goods, Commercial Services and Supplies, and Transportation. In previous questionnaires the Transportation subsector has been the least frequent respondent with a disappointing 33% response rate. It is therefore positive to see an increase in this years response rate to 59%. The transportation sector is important, as they are large carbon dioxide emitters. 10% 0% CDP 2007 CDP 2008 CDP 2009 Consumer Discretionary Consumer Staples Energy & Utilities Financials Health Care Industrials Materials Telecom & IT Total Response rate 16 17

10 5 CDP Nordic Region Report Transparency Companies were asked whether their responses to the questionnaire could be made publicly available on the CDP website and in the report. Transparency of respondents climate change strategies could be an important contribution to the investor community, an inspiration for other companies, and create a useful benchmark for the future. 70% of all companies that answered the questionnaire responded positively to this. Table 2 analyses disclosure rates over time and by country. Only companies that answered the questionnaire are included. We can observe an increasing trend line for Denmark and Finland over time. Norwegian responding companies show a stable interest in public disclosure. Sweden s public disclosure rate dropped in 2008 and 2009 compared to 2007, and despite the fact that they have the highest response rate, their public disclosure rate is lower than their neighbouring countries. The general conclusion is that disclosure rates have been quite stable over time and across countries. Table 2: Public disclosure rates by country over time Public Not public Total Disclosure rate 2007 Denmark % Finland % Norway % Sweden % 2007 Total % 2008 Denmark % Finland % Iceland % Norway % Sweden % 2008 Total % 2009 Denmark % Finland % Norway % Sweden % 2009 Total % Figure 5: Public disclosure rates by sector and over time % 88% Figure 6: External verification/ assurance of reported emission figures 37% Yes, in whole or in part No answer 20% No external verification 44% Figure 7: Total share of scope 1 emissions by Industry group 20% 28% 2% 51% An analysis of disclosure rates over time and by sector (figure 5) also shows quite stable numbers, maybe with the exception of the Financials sector that has consistently had the lowest willingness to disclose responses publicly (falling from 64% in 2007 to 55% this year). This is an interesting observation as it is investors from the Financials sector that are asking the companies to respond to the CDP questionnaire. Energy & Utilities has had a steady growth in transparency rate (from 75% to 86% this year) and, along with the Materials sector (80% on average and 85% this year), is the sector that has shown the highest disclosure rates over the years. The Industrials sector is also worth mentioning as it has had the most solid improvement over time, from almost the least transparent sector in 2007 (58%) to above average (75%) this year. External Verification/ Assurance Responding companies are divided in terms of having emission figures externally verified or assured (figure 6). However, 44% of companies answered that they had used external assurance in whole or in part, while 37% said they had not. On a general note, the level of external verification and assurance of non-financial sustainability data has increased over the years alongside the growing recognition of climate change issues in society overall. The general conclusion is that disclosure rates have been quite stable over time and across countries. Total share of Scope 1 emissions on industry and sector level In the questionnaire companies report their Scope 1, 2 and 3 emissions*. Figure 7 shows that 51% of total Scope 1 emissions are reported from companies in the Industrials sector, where the Transportation industry stands as the largest contributor with 43% of total emissions. However it is important to note that the Industrials sector is also the sector with the highest number of companies (44 of 128, or 34% of total number of companies). The Transportation sector sample consists of 10 companies (8% of the total sample). It is also evident from the figure that it is the Industrials, Energy & Utilities and Materials sectors that are the dominant contributors of Scope 1 emissions, with all other sectors contributing only marginally. These figures are taken from the entire CDP reporting universe, but reflect trends amongst all high-emitting companies in the Nordic region Industrials Energy & Utilities Materials Other Consumer Discretionary Consumer Staples Energy & Utilities Financials Health Care Industrials Materials Telecommunications & IT Average * See Risks, Opportunities and Emissions per Industry Sector, page 24 for further descriptions of the different Scopes

11 5 CDP Nordic Region Report Average company scope emissions per industry sector Figure 8 illustrates average company Scope 1, 2 and 3 emissions by industry sector. This is important as it gives an idea about large CO 2 emitters on company and industry levels. This shows the Energy & Utilities sector, with 8 responding companies, has the highest average company Scope 1 emissions among all sectors. This sector is followed by carbon-intensive sectors such as Materials and Industrials. The average figure for company Scope 1 emissions across all sectors is close to tonnes CO 2, based on responses from the 108 companies that provided Scope 1 emissions figures. The Materials sector is the sector that reports the highest average Scope 2 emissions. European Union Emissions Trading Scheme (EU ETS) The EU ETS is the largest multinational emissions trading scheme in the world, and plays an important role in EU Climate Policy. In their answers to the Risks and Opportunities section of the questionnaire, many companies mention that the EU ETS may affect them directly or indirectly in the future. Not surprisingly, many companies in energy intensive sectors like Energy & Utilities and Materials (Paper & Forest products and Metals & Mining) disclose that they are covered by the EU ETS (86% and 85% respectively) (figure 9). In total about one in every four companies reports that they operate or have ownership of facilities covered by the EU ETS. Respondents that are involved in the scheme also report uncertainties about amendments in the scheme for the third trading period starting in Figure 8: Average company scope emission (in metric tonnes) per sector Consumer Discreationary Consumer Staples Energy & Utilities Scope 1 Scope 2 Scope 3 Figure 9: EU ETS per sector Financials Health Care Does your company operate or have ownership of facilities covered by the EU Emissions Trading Scheme (EU ETS)? Energy & Utilities Materials Consumer Staples All sectors Industrials Health Care 16% 15% 30% Telecommunications & Information Technology 11% Financials 24% Industrials Materials 86% 85% Telecom & IT Total 88% Figure 10: Carbon credits per sector Have you purchased any project-based carbon credits? Energy & Utilities Materials Financials All sectors Industrials 11% 20% Consumer Discretionary 8% Health Care 8% 31% Telecommunications & Information Technology 0 Consumer Staples 0 15% Frequency of YES 57% 0% 10% 20% 30% 40% 50% 60% Figure11: Reduction plans & goals Yes No 20% 80% 88% Figure 12: Why not? In process of being defined 72% No answer 24% 4% Not considered necessary 72% Carbon Credits Carbon credits involve a systematic approach to mitigating the growth in concentration of greenhouse gases (GHGs) both nationally and internationally. Company GHGs are identified and capped and emissions are traded in regulated markets. GHG mitigation projects generate credits that may become a commodity for companies to purchase. Company reasons for purchasing carbon credits can be, for example, to offset a deficit or to lower their carbon footprint on a voluntary basis. The Energy & Utilities sector has the highest number of respondents purchasing carbon credits (57%), followed by Materials at 31% (figure 10). None of the companies in Telecommunications & IT or Consumer Staples purchased any carbon credits. It is interesting to note that 20% of responding Financials companies purchase carbon credits even though the industry is non carbon-intensive. These companies most likely purchase carbon credits on a voluntary basis. On average 15% (19 of 128 companies) have purchased project-based carbon credits. It is recommended not to draw sector related conclusions based on the low sample size in most sectors. Reduction Plans In response to mitigating GHGs companies are asked whether they have a GHG emissions and/or energy reduction plan in place. A large majority (80%) of companies answer that they do have such a plan in place (figure 11). Of the 20% that do not have reduction plans in place, 72% of these explained that they are in the process of defining them (figure 12). More detailed information on reduction plans and targets is found in Risks, Opportunities and Emissions. 5% Consumer Discretionary 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Frequency of YES 20 21

12 5 CDP Nordic region report Governance In the final section of the questionnaire companies report on corporate goverance issues. One interesting aspect is identifying which part of the organisation has reponsibility for climate change issues. 77% of all respondents acknowledge that there is either a Board committee or other executive body with overall responsibility for climate change matters (figure 13). About one third of companies say that they have incentive systems in place for individual staff members that 88% are responsible for climate change issues (figure 14). In some cases these incentives can be linked to attainment of GHG emissions reduction. 76% of all respondents publish information about the climate changerelated risks and opportunities, emissions figures, and reduction plans (figure 15). This confirms that key company stakeholders (investors, customers, suppliers, employees etc.) expect this information to be public in annual reports, sustainability reports, the web or other relevant communication channels. A slightly lower number of companies (59%) report engagement with policymakers on climate changerelated issues (figure 16). The Nordic figure is lower than the corresponding Global 500 figure of 74%. This could be due to the size of Global 500 companies and the resources they are able to allocate to climate change issues. In figure 17, we see that the 88% sectors with the highest emissions are also the sectors that have the highest interaction with policymakers, with the exception of the low-emitting Telecommunications & IT sector (see average scope emission). For example 92% of all companies in the Materials sector engage with policymakers, compared with the sample average of 59%. Figure 13: Does a Board Committee or other executive body have overall responsibility for climate change matters? Yes No answer No 5% 18% 77% Figure 14: Do you provide incentives for individual management of climate change issues including attainment of GHG? Yes No answer No 66% 30% 5% 88% Figure 15: Do you publish information about risks and opportunities Yes No response No Figure 17: Frequency of companies that engage with policymakers on possible responses to climate change Materials Energy & Utilities Telecom & IT Industrials Consumer Staples All sectors Health Care Financials 12% 12% 76% 88% 46% 45% 61% 60% 59% Figure 16: Do you engage with policymakers on possible responses to climate change including taxation, regulation and carbon trading? Yes No response No 67% 36% 5% 86% 92% 59% Consumer Discretionary 33% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Frequency of engagement 22 23

13 6 Political initiatives and restrictive regulations on use of biomass for energy will impact the price for and use of raw materials and have the potential to adversely impact the cost of wood, our most important raw material. Stora Enso The impact of climate change on a company is dependent on the nature of its business activities, its geographic locations, the regulatory environment to which it is subject and the degree to which it responds proactively to mitigate climate change effects. Climate change can have different impacts on financial performance and long-term investment value in environmentally leading and lagging companies. The following section will show how climate change exposures, risks and opportunities vary between industry sectors. The individual companies are analysed by parent industry sector, to identify key carbon disclosures and related performance drivers that could be integrated into investment analysis in the financial markets. References are made only to companies that have agreed to public disclosure. Companies granting full transparency are listed at the beginning of each industry section. Carbon intensive sectors such as Energy and Utilities, Industrials and Materials account for higher direct CO 2 emissions than industry sectors like Financials, Telecommunications and Consumer Discretionary and 24 Risks, Opportunities and Emissions by Industry group Consumer Staples. It is not possible to identify a single industry that stands out as a leader in climate change mitigation. Rather, it is often the case that each industry has two to three companies that play sustainable leadership roles in their sector, and that demonstrate high levels of ambition in their responses. One potential reason is that climate change is often discussed among consumers, and all companies feel pressured to contribute in a sustainable way. It also appears that the market rewards companies for integrating sustainable business strategies. Three different Scopes (Scope 1, Scope 2, Scope 3) are defined for GHG (greenhouse gas) accounting and reporting purposes, and to avoid double-counting. Scope 1 refers to direct GHG emissions. These emissions come from sources that are owned and controlled by the company, for example, emissions from combustion in the company s own or controlled boilers, furnaces, vehicles etc. Scope 2 accounts for GHG indirect emissions from the generation of purchased electricity used by the company. Scope 2 emissions occur physically at the facility where electricity is generated. Scope 3 indirect emissions are the consequences of business activities generated by a company, but come from sources that are not owned or controlled by the company. For many industry sectors Scope 3 emissions can be very challenging to report as they involve, for example, extraction and production of purchased materials, transportation of purchased fuels, the use of products and services sold, and employee business travel. Figure 1 gives an overview of how the Scopes interplay, and which activities generate direct and indirect emissions. Increased efficiency and cost savings can result from measuring and managing GHG emissions along the value chain. For more information on Scopes 1, 2, and 3 kindly refer to The Greenhouse Gas Protocol, Figure 1: Overviews of Scope and emissions across a value chain. Adopted from NZBCSD, 2002 in The GHG Protocol s Corporate Accounting and Reporting Standard, Revised Edition (2004) Materials (10) Ahlstrom Corporation (Paper & Forest Products) Holmen (Paper and Forest Products) Kemira Corporation (Diversified Chemicals) M-real Corporation (Paper and Forest Products) Norske skogindustrier (Paper and Forest Products) Norsk Hydro (Metals & Mining) Outokumpu Oyj (Metals & Mining) SCA (Paper and Forest Products) Stora Enso (Paper and Forest Products) UPM-Kymmene Corporation (Paper and Forest Products) Key Findings: This entire sector is exposed to risks related to GHG regulations which respondents fear will result in increased energy costs. Responding companies identify potential opportunities in biofuels and energy efficiency solutions. Risks and Opportunities: This sector is highly exposed to climate change and regulation, which translates into interesting business opportunities for some companies. The majority of the companies in this sector, especially paper and forest companies, see regulatory risks from climate change as a strong driver for increased costs. Emerging regulations such as EU climate and energy policy, Emissions Trading Scheme (EU ETS) and Integrated Pollution and Prevention and Control (IPPC) Directive could potentially increase costs of electricity, raw materials and logistics. Paperboard and paper producer M-real believes that regulatory risk may impact the competitiveness of the European paper industry, and may consequently result in increased CO 2 emissions outside the European Union, a process referred to as carbon leakage. Climate change has caused an increased demand for non-fossil fuels such as biomass. UPM-Kymmene identifies the increasingly competitive use of biomass for energy, which may reduce the supply of wood raw material and increase cost pressure. The exposure to regulatory climate change risks has made the Kemira group divest in several energy intensive businesses and operations in recent years. In the aluminium industry, Norsk Hydro identifies the environmental footprint advantages of aluminium. The company stresses that aluminium can be used to make lighter vehicles that consume less fuel and for the construction of energy efficient buildings, and is completely recyclable at the end of its use. Reported physical risks are mostly related to changes in weather conditions. Paper and forest company Holmen sees greater risk of storm and sea level rise as potential threats to mill sites. Other physical risks acknowledged are plant diseases and the spread of forest pests. M-real foresees mild winter seasons as negatively impacting wood procurement. Stora Enso points out emerging reputational risks for paper and forest products companies, arising from customer expectations for actions to define and reduce carbon footprint. The forest industry sees business opportunities coming from changing 6 Risks, Opportunities and Emissions by Industry group regulations for wood based fibres as a renewable natural resource. Respondents state that wood used as construction material is energy efficient during the production and use phase. Growing forests also help absorb CO 2, as pointed out by some forest industry respondents. Most companies in the paper and forest sector are producing and selling bio-fuels and green electricity made from wood fibre. The high cost of electricity has resulted in wind power investment opportunities to balance energy needs. Members of this industry group see opportunities to mitigate effects of climate change through greater use of renewable raw materials, efficient use of energy in operations, and cleaner and more efficient production processes. Other opportunities are production of bio-fuels for transportation, and collection and recycling of paper. Norsk Hydro believes that aluminium products will be a part of the solution in a carbon-constrained world, and use it in energy efficient building and solar solutions. Kemira anticipates technology and recycling services in water business, bio-fuel opportunities in pulp and paper, and solutions for advanced technology for oil and gas operations. GHG Emissions: Disclosure of Scope 1 and Scope 2 emissions are of special interest in carbon-intensive sectors. All companies in this sector disclose Scope 1 information on their CO 2 emissions. Scope 2 information is not provided by Kemira due to the extreme complexity of collecting information globally. Under Scope 3 emissions, most paper companies report emissions from employee business travel, external distribution and logistics, and the company supply chain. The paper companies do not quantify emissions on use of products, as data is not available. M-real states that use of paper as such does not cause emissions. UPM reports that paper products in general are recyclable and reusable, and thus reduce potential GHG emissions. In addition, Outokumpu maintains that use of stainless steel does not cause CO 2 emissions, as it is fully recyclable, and every end of product lifetime contributes to climate change solutions. 25

14 6 Risks, Opportunities and Emissions by Industry group Table 1 Disclosures of paper and forest companies CO 2 emission targets and achievement: 26 Company Company defined emission reduction Reduction target Time frame Achieved reduction (2008) Ahlstrom Emissions per tonne product produced 20% % Holmen Fossil fuel used in Swedish facilities 90% % Norske Skogindustrier SCA Environmental legislation connected to climate change drives costs for emissions of carbon dioxide, energy, wood and transport. SCA Absolute emissions 25% % Scope 1 & Scope 2 emissions per production level Norsk Hydro argues that use of aluminium in transport (cars and airplanes) reduces CO 2 emissions significantly over time compared to steel. Substituting one kilogram of steel with aluminium eliminates 20 kg CO 2 over the life of an average vehicle. EU Emissions Trading Scheme (EU ETS): The vast majority of paper and forest companies disclose that the free CO 2 allowances under the EU ETS exceeds total reported C0 2 emissions, with the exception of newsprint and magazine paper producer Norske Skogindustrier and M-real who report a deficit. Steel company Outokumpu also reports a surplus. Aluminium will not be covered under the EU ETS until Emissions reduction targets and achievements: All paper and forest companies disclose reduction targets, but not all companies report quantifiable goals. Stora Enso refers to two targets related to energy reduction: an increased trend in power to heat ratio of internal energy production, and an increased number of energy efficiency reviews performed. No fixed reduction target is set on the group level for UPM-Kymmene, rather each mill sets its own target. M-real uses an annual rolling target for energy usage. For Ahlstrom, Holmen, Norske Skogindustrier and SCA, similar emission reduction targets and timeframes are disclosed (see table). Norsk Hydro discloses its target to reduce GHG emissions from 2.17 (2007) to 1.71 (2012) tonnes CO 2 per tonne of primary aluminium. Outokumpu has a target to reduce energy by 2% per tonne of steel processed, and 5% of electricity consumption in offices. Kemira has set a 9% improvement target in energy efficiency and has also acquired access to carbon free energy through minority shareholdings in nuclear, water, and biomass energy production. Energy and Utilities (6) Fortum (Electric Utilities) Hafslund ASA (Energy) Lundin Petroleum (Oil & Gas Exploration & Production) Neste Oil Oyj (Oil & Gas Refining & Marketing) StatoilHydro (Integrated Oil & Gas) Teekay Petrojarl ASA (Oil & Gas Exploration & Production) Risks and Opportunities: Political and regulatory developments have had a major impact on energy and utility companies. An active 20% ,6% Key Findings: Regulations are expected to increase power prices and costs, but not until the new climate agreement is in place in Energy efficiency in refineries is high on the agenda among industry respondents. Renewable energy is identified as an opportunity by Fortum, Hafslund, Lundin and StatoilHydro. dialogue with regulatory bodies is needed. Utility provider Fortum identifies uncertainty about the upcoming 2012 post-kyoto global climate agreement as the main regulatory risk for future investments in the energy industry. The price of CO 2 allowances is also a major financial risk for the companies. For hydro power producer Hafslund the ability to respond to the effects of climate change is dependent on sustainable regulations made by government. Lundin Petroleum and Neste Oil see the international framework that regulates GHG emissions as important, as oil is their core business. The regulatory regime coming into effect after 2012 is yet unknown. Like the Materials sector this sector also sees significant risks of carbon leakage as companies try to avoid emissions in countries that have strict climate policies. StatoilHydro is exposed to CO 2 -tax for all CO 2 emissions from its production on the Norwegian continental shelf. In 2007 this Norwegian oil company paid 40 Euro/tonne CO 2 -tax. In 2008 the petroleum industry was included in the EU ETS, but did not receive any free allowances for the period Compensation was given by cutting CO 2 taxes in half, as the cost of buying allowances would add to the general industry cost structure. Regulatory risk related to climate change is believed to affect StatoilHydro in all geographic regions where it is operating. Teekay Petrojarl ASA, offering integrated storage and transportation solutions in the energy industry, reports that stricter emission limits increases the cost of new investments in logistics in the oil business. Physical risks to hydro power operations are reported to be linked to changes in weather conditions. For instance, extreme weather conditions will determine maintenance of power distribution, and network operations are vulnerable to strong winds. Extreme flooding affects hydro power production plants, and both on- and offshore activities are affected by extreme weather conditions and changes in weather patterns. Fortum reports changes in consumer attitudes and behaviour favouring other energy sources as other risks. Hafslund says that the new government may impose restrictions in exports of wood pellets to the U.S. Lundin anticipates reputational risks from institutional investors and media to threaten non-financial valuation of the company, especially in European branches. Company failure to comply with societal norms and expectations Table 2: EU Emissions Trading Scheme (EU ETS) Fossil fuels remain the dominant source of energy for decades to come. Remaining hydrocarbon resources are scarcer to find and new energy-intensive and environmentally challenging areas of production are entered into. Such as heavy oil production from Venezuela, oil sand in Alberta and production of LNG, all lead to higher GHG emissions per unit of output. We have entered into these activities with the aim of providing leadership in finding solutions to the challenges involved. StatoilHydro The table below illustrates companies in this sector participating in the EU ETS and corresponding CO 2 emissions during Fortum Hafslund Lundin Neste Oil StatoilHydro Free allowances in metric tonnes CO ,900,000 57, ,166 3,226,316 2,916,853 Total allowances purchased through auction ,473,176 Total emissions in metric tonnes 17,600,000 29, ,843 3,398,489 12,390,029 of which in Russia 9,800,000 could result in negative stakeholder reactions. Financial risks stem from high compliance costs (increased energy efficiency) or high noncompliance costs (penalties and third party actions). StatoilHydro sees reputational risks arising from movement into new business areas: Opportunities increase as emissions reduction requirements become stricter. According to Fortum, regulation will increase Nordic power prices and profitability. The Norwegian government is supportive of local energy production based on e.g. wood pellets and biomass. This support will, according to Hafslund, increase the competitiveness of eco-friendly energy sources. Lundin sees GHG regulation as leading to opportunities for new energy efficient equipment, Neste Oil expects a rapid growth in the market for bio-fuels and the demand for high quality renewable traffic fuels, and StatoilHydro anticipates an increase in demand for clean energy and technology. Generally, stricter emissions requirements will provide a comparative advantage to the industry leaders in energy production. Fortum reports that other opportunities related to climate change can arise from increased demand for cooling due to higher temperatures, and increasing hydro generation volumes due to greater precipitation, since the marginal cost of additional hydro production is low in existing plants. Hafslund also expects that milder winters will make hydro-power generation more stable 27

15 6 Risks, Opportunities and Emissions by Industry group over the years. The demanding, harsh working conditions in oil production will increase the demands on Floating, Production, Storage, and Offloading (FPSOs) vessels for Teekay. Generally in this sector, climate change and regulation lead to both higher energy prices and encourage customers to switch to environmentally friendly energy, such as hydro-power. GHG Emissions: All companies in this sector report on Scope 1 and Scope 2 emissions. Scope 3 GHG emissions disclosures are in most cases restricted to employee business travel. GHG emissions data has been externally verified by all companies except Hafslund. Fortum, Hafslund and Lundin provide detailed information about energy and fuel requirements and costs. They report costs of purchased energy broken down by individual energy type, and costs for fuel purchased for mobile and stationary combustion broken down by individual fuel type. Also reported are input or consumption of purchased energy (MWh) and total consumption of fuels purchased for mobile and stationary combustion. Numbers are given for output or total energy (MWh) generated, renewable energy (excluding biomass), and energy export. Fortum also provides information on their purchase of project-based carbon credits for compliance purposes. Emissions reduction targets and achievements: The majority of the companies have GHG emissions and/or energy reduction plans in place or in the pipeline. The main aim in the sector is to reduce CO 2 emissions. Alternative fuels, promotion of renewable energy, and increased energy efficiency are important tools. Fortum s global CO 2 emissions balance shows a significant reduction in the system since At the moment, the global annual CO 2 savings are estimated at 1.25 million tonnes of CO 2. The total GHG emissions have, however, increased significantly due to the acquisition of the Russian energy company OAO Fortum which was included in the total figures for Fortum s total emissions were 70% higher than in The long-term vision of Fortum is, however, to be a CO 2 -free power and heat company. Targets for newly acquired Russian operations are expressed qualitatively at this stage. Telecom and IT (6) Ericsson (Communications Equipment) Millicom International Cellular SA (Wireless Communication Services) Nokia Group (Telecommunications) TDC A/S (Integrated Telecommunication Services) Tele 2 AB (Integrated Telecommunication Services) TeliaSonera (Telecommunication Services) Risks and Opportunities: Most of the companies in this sector do not report exposure to regulatory risks of climate change, but do identify opportunities in providing low-carbon products or services. Nokia has identified some climate change-related regulatory risks, such as stricter energy efficiency requirements on Information and Communication Technology (ICT) products, offices, factories, logistics and supply chain. There are also cost implications of possible emissions trading and changes in taxation. Manufacturing sites and supply chains are exposed to physical risks from extreme weather conditions. Higher temperatures can also increase energy costs, as reported by mobile telephone service provider Millicom. Nokia also discloses a detailed assessment of other risks related to resource scarcity and related price changes, changes in consumer attitudes and political risks. Ericsson sees the direct regulatory risks to their operations as minor, because they are not a major emitter of CO 2 and are already a market leader in energy efficiency in their sector. The regulatory risks for telecommunication services companies, such as TeliaSonera, are indirect and come through higher energy prices. Stricter regulations and policies offer opportunities for businesses in this sector to take proactive steps on climate change. Mobile solutions, including equipment, Key Findings: The Telecom and IT sector sees moderate risk exposure related to climate change, but sees an opportunity in offering products and services that reduce carbon usage for others. Business opportunities lie in providing customers with energy efficient solutions. Most companies set GHG and energy reduction plans and targets. telecommunications and services, can help lower GHG emissions by reducing the need for travel and transport. Ericsson sees great potential in using ICT to reduce energy consumption in society. The ICT sector represents only 2% consumption of energy itself, but offers potential for carbonlean solutions which can help others reduce their carbon emissions. Energy costs account for one half of mobile operators operating expenses. Ericsson provides solutions for operators to improve their energy efficiency, network design, and alternative energy solutions. GHG Emissions: All publicly available responses in this sector report Scope 1 and Scope 2 GHG emissions. Under Scope 3 emissions, all companies disclose emissions from employee business travel. Ericsson and Nokia disclose emissions on all dimensions of Scope 3; external distribution and logistics, use/disposal of the companies products and services, and the corporate supply chain. TeliaSonera has full Scope 3 disclosure, except information on the use/disposal of products and services. For TeliaSonera, Scope 1 emissions increased significantly due to the inclusion of figures from the Baltic and Norway, as well as Scope 3 emissions due to more precise reporting. The companies disclose measurements for financial and activity-related emissions intensity. Financial measures included are volume of CO 2 per monetary unit, such as net sales in and SEK, US$ turnover, and EBITDA in SEK. Companies report activityrelated intensity measures by mobile device volume, and by subscriptions of mobile and broadband services. Only Ericsson and Nokia report that the disclosed emissions information has been externally verified. Millicom, Nokia, communications solution provider TDC and telecommunication service provider Tele2 also report costs of purchased energy. EU Emissions Trading Scheme (EU ETS): Companies in this sector do not participate or anticipate participating in any trading schemes within the next two years, except for Nokia in the UK Carbon Reduction Commitment starting Emissions reduction targets and achievements: The majority of the companies report having GHG emissions and energy reduction plans in place or in the process of being defined. Ericsson set a target in 2008 to reduce its lifecycle carbon footprint by 40% over the next five years, starting with a 10% reduction in To achieve this, they will increase surface shipments by 60%, increase the use of virtual collaboration tools, and improve portfolio energy efficiency. Nokia aims to reduce CO 2 emissions by a minimum of 10% in 2009 and 18% in 2010 with 2006 as their baseline. Savings are achieved through energy efficiency improvements in facilities, by renewable energy purchases, reduced office space and mobile office concepts. TeliaSonera wants to reduce CO 2 emissions from Swedish operations by 4% per year, and increase energy efficiency by 5% per year, although the use of telecom services is at the same time expected to increase by 10% per year. This target will be reached by reduced travel, increased efficiency of maintenance, and investment in more energy efficient solutions. TDC plans to reduce CO 2 emissions by 5% mainly through energy savings. Millicom plans to reduce emissions by 50% per site by 2020 with increased energy efficiency and alternative energy sources. Emissions avoided through use of goods and services: Products in this sector can also help customers reduce their ecological footprints by replacing products with services. Customers can save energy by turning off standby mode or by unplugging their equipment when it is not in use. Nokia demonstrates the scale of the opportunity by estimating that if all customers unplugged their chargers when phones were fully charged, it would save enough energy in a year to power average sized European homes. ICT is said to make a major contribution to economic growth while at the same time reducing the use of energy. ICT can, according to Nokia, act as an enabler of sustainability in other industries through the intelligent use of telecommunications products or services. The following companies illustrate ways to avoid emissions: TeliaSonera has reduced the need to travel between Helsinki and Stockholm by using videoconferencing, which translates to an estimated saving of tonnes of CO 2 e. According to Ericsson s research, certain telemedicine applications could result in CO 2 emission reductions that are 20 times greater than those from the use of a mobile health service. Capital Goods (18) Industrial products & Services (7): Atlas Copco (Industrial Products & Services) Gunnebo (Industrial Products & Services) Outotec Oyj (Industrial Products & Services) Rockwool International A/S (Industrial Products & Services) SKF (Industrial Products & Services) Trelleborg AB (Industrial Products & Services) Wärtsilä Corporation (Industrial Products & Services) Construction & Building products (5): Assa Abloy (Building Products) JM AB (Construction & Engineering) Skanska AB (Construction & Engineering) Subsea 7 (Construction & Engineering) Key Findings: Companies in the Industrials sector identify climate change impacts throughout the value chain. Energy efficient and clean technology solutions are offered to customers. Energy reduction plans are in place. Veidekke ASA (Construction & Engineering) Diversified Industrials & Capital Goods (6): Alfa Laval Group (Industrial Machinery) Kone Oyj (Industrial Capital Goods) Metso (Industrial Machinery) NKT Holding A/S (Industrial Conglomerates) Orkla ASA (Diversified Industrial) Scania (Construction & Farm Machinery & Heavy Trucks) Risks and Opportunities: Industrial Products & Services companies (7) have an impact on the environment along the whole value chain. The impact comes from the production process through the use of energy, natural resources and the generation of emissions and waste; in the distribution of products; and in the use and disposal of products. Most of the companies recognise regulatory risks. Gunnebo, provider of security solutions, reports risks from possible emissions trading, taxation of energy and fuels, implementation of energy efficiency standards, and new regulations within the travel industry. The time span for the regulatory risks would be five years both in Europe and Asia. Wärtsilä, supplier of engines and power systems to the marine industry, sees potential business risks related to climate change in regulatory emissions restrictions and consumer attitudes to using combustion engines. SKF, supplier of ball bearings and other industrial products and services, sees risks as arising from higher energy costs for manufacturing operations and suppliers, the increasing expense of logistics due to carbon costs, and a reduction in demand from carbon 28 29

16 6 Risks, Opportunities and Emissions by Industry group A shift in client's investment patterns towards a more sustainable management of assets would also have a positive influence on the Group's socially responsible investments (SRI). DnB NOR intensive sectors. Outotec, active in minerals processing solutions, sees potential physical risks ranging from floods to water scarcity and drought in different parts of the world. Other general risks involved are resource scarcity leading to price increases and changing consumer attitudes. Regulations also bring opportunities in that companies benefit financially as they strive for energy efficiency. The industrial tooling and equipment company Atlas Copco sees that regulation pushes the industry to develop more energy efficient products and solutions, which translates into launching more energy efficient compressors. Regulatory requirements in the auto and food industry also provide core business opportunities for Trelleborg, the engineering group that offers advanced polymer technology solutions. SKF s response to regulation is to focus on low carbon energy solutions, more energy efficient models, new market segments for low carbon or energy efficient products, and services that provide higher energy efficiency. Rockwool sees insulation as one of the most profitable CO 2 abatement technologies. Among physical opportunities, Outotec sees resource scarcity as a physical opportunity for new technologies, such as those that address water efficiency. According to Gunnebo, the use of renewable energy also creates goodwill which in its turn attracts better employees. The majority of companies in the Construction and Building Products industry (5) report risks and opportunities. JM, the housing developer, sees that energy declaration is a risk for higher costs in the building industry. Taxes can also increase energy and transport costs, which leads to higher costs for raw materials in this industry. Sub-sea engineering company Subsea 7 is exposed to emissions related taxation on vessels in Norway, and carbon taxes on operations in the UK. However, this industry also identifies clear business opportunities. Veidekke, the construction company, sees large scale business opportunities in climate change when safeguarding coastal areas and upgrading older houses and public buildings. Also, on-site waste production, sorting and recycling is an emerging business area. Construction company Skanska finds opportunities to export existing Nordic know-how in energy efficiency, renewable energy and district heating/cooling systems. In the Diversified Industrials & Capital Goods group (6), Orkla, the industrial conglomerate, reports regulatory risks in different business areas, such as branded consumer products, aluminium solutions, materials, renewable energy and the financial investment sector. Regulation can increase prices of raw materials, while emissions and energy efficiency standards impact on production and transport costs. Scania, the manufacturer of heavy trucks, is accustomed to stringent legislation and strong market demand for fuel-efficient vehicles. They state that risk comes from regulations that emphasise technology rather than functionality. Metso, an industrial machinery producer, reports indirect regulatory risks through customers, such as in mining, construction, metal re-cycling, pulp and paper and energy industries. Risks feed into opportunities in most of the industrial companies. Kone can provide energy efficient solutions to buildings by developing durable and eco-efficient elevators and escalators. Alfa Laval, manufacturer of equipment and systems for liquid and solid separation, regards energy saving and ecological protection as the main drivers of technology in their products. Scania sees opportunities in a tighter regulatory framework, and competition in fuel efficiency. Scarcity in water resources as a result of climate change will create business opportunities for cleaning equipment that makes efficient use of water among NKT Holding companies. GHG Emissions: All the Industrial Products & Services companies included for analysis in this sector report Scope 1 and Scope 2 emissions. In many cases Scope 1 information is also broken down by country or region. For Scope 3 indirect emissions, not all companies give estimates of emissions from employee business travel. Nevertheless, through their travel agencies Outotec is able to get flight emissions reports containing accurate information on km travelled and CO 2 emitted worldwide for Only a few companies disclose CO 2 emissions from the use or disposal of their products or services. Rockwool provides an estimate that insulation produced and installed in 2008 will save 200 million tonnes of CO 2 in its lifetime. The Construction and Building Products industry also reports Scope 1 and 2 emissions. Most of the companies disclose emissions for employee business travel in Scope 3, while in many cases the other dimensions are missing. Skanska estimates that 80-90% of its GHG emissions are Scope 3 and result from the use or disposal of the company s products or services. Steel and concrete materials count for the majority of these and Skanska hopes to report CO 2 emissions from use of steel and concrete for JM discloses that the main source of emissions from the use of its products is energy used for heating and hot water production in the houses they build. Energy efficiency is therefore a key issue for reducing emissions. Even in the Diversified Industrials & Capital Goods group, Scope 1 and 2 emissions are reported. For highly diversified companies such as Orkla, estimates for Scope 3 are difficult to provide, but companies are gradually improving data collection and are planning to report Scope 3 in the future. Emissions estimates from travel are usually included in Scope 3 reports. Scania is aware of the climate impact throughout the life cycle of trucks, but does not plan to collect detailed Scope 3 emissions accounting for the categories in the questionnaire. Table 3: EU Emissions Trading Scheme (EU ETS) The table below illustrates the companies in the Industrials sector that participate in the EU ETS and their corresponding CO 2 emissions during Rockwool Orkla SKF Metso Wärtsilä Scania Free allowances in metric tonnes CO , ,837 9,885 18,771 11, Total allowances purchased through auction 99,880 16, Total emissions in metric tonnes 783, ,465 2,934 22,730 9, In the industrials group many companies provide rich descriptions of how they enable third parties to avoid emissions. Companies disclose measurements for financial emission intensity. Emissions are related to net sales and turnover in SEK or US$, and EBITDA. Because of the complexities in diversified businesses very few companies relate emissions to activity measures. Scania relates emissions to the number of vehicles produced. The majority of industrial companies have not externally verified emissions data. Rockwool has also purchased carbon credits for compliance purposes. In Metso only one of the operating units was a part of the EU ETS. Skanska is not part of the EU ETS, but has bought carbon credits on a voluntary basis to offset its own emissions. Emissions reduction targets and achievements: All of the companies report having GHG emissions and energy reduction plans and activities in place or at least in the process of being defined. Commercial Services & Supplies (6) Alm. Brand (Financial Services) Atea ASA (IT Consulting & Services) G4S (Commercial Services & Supplies) Prosafe SE (Energy Equipment & Services) TietoEnator (IT Consulting & Services) Vestas Wind Systems A/S (Energy Equipment & Services) Key Finding: Climate change risks become opportunities for companies who offer renewable energy solutions and energy efficient ITservices. Risks and Opportunities: Companies working with Energy and IT Services see risks and opportunities in climate change. Wind turbine manufacturer Vestas Wind Systems sees climate change regulation and new targets for renewable energy as impacting technology development and renewable energy production. Consulting firm Atea observes that regulation will increase the demand for energy efficiency and Green IT solutions in the whole IT life cycle, starting with IT policies, products, consultancies, logistics, technical solutions and recycling of IT equipment. IT consultant TietoEnator sees IT as an enabler for companies to monitor environmental and social performance, and ultimately as a driver for improvement. Emissions: Vestas provides a detailed description of Scope 1, 2 and 3 emissions, breaking them down by country, business division and facility. Wind turbines generate renewable energy that is estimated to have saved the world from 7 million tonnes CO 2 in According to Vestas, wind turbines generate 35 times the energy used during their entire life cycle. G4S, the security solution provider, is the largest CO 2 Scope 1 emitter in this industry group with tonnes GHG emissions, with the majority of emissions estimated to come from their heavier cash transportation fleet of vehicles. Emissions avoided through use of goods and services: Emissions and energy use can also be reduced directly by Atea customers by replacing old computer equipment and cutting energy use in server rooms, and indirectly through teleconference systems. Vestas explains that the products they manufacture generate renewable energy that in effect allows third parties to avoid GHG emissions. Emissions or energy reduction targets: Atea has a target to cut CO 2 emissions by 13% for The final target is to become CO 2 neutral in 2010 through a combination of emissions reduction initiatives and carbon credit purchases. G4S s reduction intensity target (based on tco 2 e per m revenue) is set to 4.5% per annum and comprises fuel usage, buildings and air-travel and awaits Board approval. Vestas climate target focuses on the utilisation of resources. They report a target for purchased renewable energy to be 50% and renewable energy used in their own activities to be >90% for To reach the target of 50% renewable energy they state that they need to focus on energy reductions

17 6 Risks, Opportunities and Emissions by Industry group The physical risk from climate change is linked to the risk that natural disasters/cyclone storms and other severe weather conditions will affect our clients houses, cars or other physical belongings. Storebrand Transportation (9) A.P Moller Maersk (Transportation) Copenhagen Airport A/S (Airports) Dampskibsselskabet NORDEN A/S (Surface Transport) DSV A/S (Surface Transport) Finnair (Airlines) SAAB (Aerospace & Defense) SAS (Airlines) Torm A/S (Surface Transport) Transatlantic AB (Surface Transport) Key Findings: The aviation industry is to be included in the EU ETS starting in Transportation companies anticipate increasing fuel prices resulting from regulatory risk. Shipping companies see a link between a lower carbon footprint and increased competitive advantage. Risks and Opportunities: Companies in the aircraft segment of Transportation are highly exposed to regulatory risks. The Maersk group is a conglomerate with activities in the transport, energy and industry sectors, all of which are exposed to climate change and regulation. The Nordic aviation companies Finnair and SAS will be included in the EU ETS starting in 2012, which will bring additional costs to operations. A global solution to regulation is expected. Aviation regulation will also indirectly affect airport operators. According to SAAB, dramatically increased fuel prices or taxes on GHG emissions could result in a major reduction in air transport, and could decrease aircraft production. There is currently no specific international CO 2 regulation for shipping, but there are internationally set targets to reduce harmful air pollutant emissions from ships. Maersk and other shipping companies see opportunities in ocean shipping, because it is a transport method with one of the lowest carbon footprints per tonnes shipped. Finnair anticipates modern fleets will lead to opportunities such as lower compliance costs and customer driven emission reductions. SAAB anticipates a greater demand for low-emission solutions for land, sea and air transport. GHG Emissions, Fuel and Energy: Maersk and SAAB report Scope 1 and 2 emissions, as well as Scope 3 emissions resulting from employee travel and logistics. Emission targets and reductions are disclosed in detail. The aviation companies provide information on Scope 1 and 2 emissions. Along with reporting costs for energy and fuel, Finnair reports zero Scope 2 emissions and use of carbon free electricity. None of the shipping companies provide information about emissions or energy reduction activities. Emissions reduction targets: The shipping company Torm A/S has established a long-term target to reduce CO 2 emissions by 20% by 2020 using 2008 as a baseline year. They have responded actively to climate change by increasing fuel efficiency through the acquisition of vessels driven by more efficient electronic engines. Maersk Line is the main CO 2 contributor in the group with a target to reduce relative fleet CO 2 emissions by 20% between 2007 and SAS discloses a GHG reduction target of 50% per unit produced by 2020 and plans to shift to bio-fuel as this becomes commercially available. SAAB s target is to reduce GHG emissions by 20% by 2020 in comparison to 2007, normalised to annual turnover. Financials (11) Atrium Ljungberg AB (Property) Castellum (Real Estate Management & Development) DnB NOR (Banks Europe) Fabege (Real Estate Management & Development) Industrivärden (Diversified Financials Europe) Investment AB Kinnevik (Diversified Financial Europe) SEB (Banks Europe) Storebrand ASA (Insurance Europe) Swedbank (Banks Europe) TopDanmark (Insurance Europe) TrygVesta A/S (Insurance Europe) Key Findings: Financial Services companies are indirectly exposed to regulatory and physical risk on behalf of their customers. Energy costs for heating and cooling buildings are predicted to increase as a result of climate change. Lending and financing opportunities are arising as climate change moves up in customer priority. Risks and Opportunities: The Financials sector is comprised of respondents representing banks, insurance and real estate companies. These companies consider themselves to be in a low-emitting sector. Companies offering insurance products identify exposure to direct physical risk through their insurance customers. Insurance companies state that financial implications on future operations are linked to physical risks, as insurance premiums may not keep up with the increase in natural damages resulting from climate change. Not all members of this group consider themselves to be exposed to regulatory risk. Some banks acknowledge indirect regulatory risk since regulatory changes mainly affect their clients. Examples of regulatory risks disclosed are CO 2 taxes directed primarily at energy intensive sectors, and carbon allowances targeting companies that participate in the EU ETS. Real Estate owners express concern over risks related to climate change that may increase heating and cooling expenses in building stock. Other concerns are regulations for building standards, hazardous substances in buildings and waste handling. The Financials sector shows confidence that risks can be turned into opportunities for sector members with climate change preparedness. Storebrand and DnB NOR are examples of financial service providers that mention opportunities in developing special financial products such as equity funds targeting environmentally oriented companies, and lending and financing opportunities in renewable energy production such as wind and solar power. Similar opportunities are identified by real estate respondent Castellum, who observes a customer pull from tenants who place higher demands on real estate owners for environment and quality issues. Insurance company TrygVesta foresees wider opportunities for climate changerelated insurance use in the Nordic region. TrygVesta believes climate change will increase their business, as people will need to insure more due to climate change risk. They draw a parallel to health insurance, which has been an opportunity for them. In some countries, people have sought to offset the deterioration of social security by purchasing private health insurance. Energy reduction plans and targets: The vast majority of public companies in the financial sector state that they have energy reduction plans in place. Of the four Nordic banks that have agreed to publicly disclose CDP information, three answer that they have reduction plans and targets in place. SEB has a target to reduce 45% of absolute CO 2 emissions between 2008 and 2015, a goal they declare will primarily be achieved by utilising renewable electricity and by reducing energy use by the target year. Storebrand has a target to reduce CO 2 emissions by 20% between 2008 and The goal for energy use is related to heating headquarters and is expressed in terms of kwh/m 2 for the time span of Swedbank refers to annual CO 2 emissions reductions in their answers and gives reductions in employee business travel as an example. The CO 2 reduction target for 2009 is 5%. Health Care (9) Coloplast A/S (Health Care Equipment & Supplies) Lundbeck A/S (Pharmaceuticals) Meda AB (Pharmaceuticals) Novo Nordisk (Pharmaceuticals) Novozymes A/S (Biotechnology) Orion Group (Pharmaceuticals) Pronova BioPharma ASA (Pharmaceuticals) Q-Med AB (Biotechnology) William Demant Holding A/S (Health Care Equipment & Supplies Key Findings: The low-emitting health care industry sees the biggest regulatory risk coming from increased CO 2 taxation, which will primarily affect their energy costs. Health Care companies main focus for climate change mitigation is energy savings in buildings and plants. Risks and Opportunities: Companies in the health care industry express divided opinions regarding their exposure to risks and opportunities related to climate change. The industry claims to be a moderate emitter of CO 2 emissions. A large share of CO 2 emissions comes from energy usage in buildings and facilities. Biotech manufacturer Novozymes A/S sees regulatory risk associated with energy prices. Employee business travel is another significant source of CO 2 emissions for this sector. Regulatory risks are linked to increasing energy costs. There is continued focus on energy efficiency in buildings and facilities among pharmaceutical companies Lundbeck A/S and Novo Nordisk. With their long-term focus and commitment these companies identify energy management as a business opportunity related to climate change. Coloplast A/S, provider of intimate health care supplies, has operations in both the United States and China, We expect that our business, not being energy extensive and focused on future climate change challenges, will be attractive from the major international investors especially pension funds and others with strong environmental portfolios. Coloplast A/S We continue to believe that regulations within the auto industry will create opportunities for telecommunications. It will enhance the usage of distant working and other services that are location-free solutions for our customers. TeliaSonera and sees physical risks such as tornadoes and heavy thunderstorms as a business threat. Best in class respondents in this sector feel that their commitment to sustainability issues is an opportunity valued by both customers and investors as increased environmental focus has been observed. Emissions: Most companies report Scope 1 and 2 emissions figures. Only two companies, diabetes care companies Novo Nordisk and Novozymes A/S, qualify for the EU ETS. About 75% of health care companies have an energy reduction plan in place, which corresponds fairly well with the average figure of 78% of all industry sectors. A common theme for targets is to decouple GHG emissions growth from economic growth

18 6 Risks, Opportunities and Emissions by Industry group Changes in production prerequisites due to climate changes may make it more difficult to balance product supply and demand. Hakon Invest AB Consumer Discretionary (8) Alma Media Corporation (Publishing) Axfood (Multiline Retail) Clas Ohlson AB (Multiline Retail) H&M Hennes & Mauritz AB (Textiles, Apparel & Luxury Goods) Hakon Invest AB (Multiline Retail) Sanoma (Publishing) Stockmann Group (Multiline Retail) Tomra Systems A/S (Environmental Services) 34 Key Findings: Retail companies with large retail space believe that energy prices may rise because of climate changerelated regulatory risk. Proactive retailers with existing energy savings programmes see this as a business advantage. Retail companies in this sector believe that reputational risk related to climate change may expose non-responding companies. Risks and Opportunities: This sector consists of companies in the retail business in the areas of food, apparel, trading and publishing, to mention a few. Hakon Invest AB has responded on behalf of its 40% ownership in food retail company ICA AB who, together with clothing company H&M Hennes & Mauritz AB (H&M), represents the largest retail companies in this sector. Both companies report similar regulatory risks. The EU ETS is mentioned as a programme that may increase the price of fossil fuels, since this sector is dependent upon goods transportation, especially road transport. H&M reports that there is also a risk that the EU ETS may increase the cost of electricity and construction materials such as concrete and steel, and may increase business overheads. ICA AB, whose energy usage is strongly tied to refrigeration and freezing in its retail facilities, discloses risks and costs related to climate change. H&M states that they might be affected by emissions trading programmes in the UK (electricity and gas) and USA (lighting), which will demand reduction commitments in the retail sector. Companies in the retail sector recognise that possible physical risks could affect business through the supply chain. Companies state that changes in temperature, precipitation and droughts may be more extreme in countries where the goods are sourced. Stockmann Group, involved in retail trade, points out that extreme weather conditions could cause extra direct or indirect costs to business in terms of energy, transportation and logistics. But even buildings in urban areas could be at risk, as H&M reports. Responses in this sector also refer to risks arising from changes in consumer behaviour. As it is essential for the retail sector to meet customer needs, there is a risk of slow response to new customer patterns due to climate change. Some retailers state that failing to respond may also cause reputational risk. Retailers that recognise risk factors due to climate change are also among those companies in this sector that demonstrate preparedness to meet these changes, and to turn risks into opportunities. Among opportunities mentioned is the ability to cater to new customer needs, for example through the introduction of a more climate-considerate goods assortment in stores. Energy efficiency activities that can lower energy consumption in stores and warehouses are examples of opportunities that can reduce CO 2 emissions, and at the same time improve financial performance. Respondents claim that supply chain risks are offset by having a choice of a number of suppliers in different geographical regions. Emissions: In the consumer discretionary sector H&M and ICA are the two largest retail chains that disclose publicly, and consequently have the highest volume of CO 2 emissions compared to other companies in this sector. Most emissions are reported under Scope 2, as many retailers do not have production facilities of their own. Emissions avoided through use of goods and services: Goods or services that allow GHG emissions to be avoided by third parties, is a new question category for this year s CDP information request. Tomra Systems ASA is an environmental services company that fits quite well into this description. They offer systems that enable the recovery and recycling of materials. They estimate that their products have reduced CO 2 emissions by 9 million tonnes in collecting and recycling, as opposed to landfill and the use of virgin materials. Emissions targets: Clear emissions and energy reduction targets have been reported by three companies in this sector. Retail outlet chain, Clas Ohlson AB has an overall target of reducing fossil carbon emissions by 30% per tonne/ km between 2007 and Sources apply to the transportation of goods, and activities are related to increasing use of biodiesel in trucks and a larger share of transportation via railroad. H&M has a target set to reduce CO 2 emissions between 2005 and 2009 by 10% relative to sales. Other commitments entail reduction of energy use by 20% per square metre, and at least 20% of energy use in stores coming from renewable energy sources. Both targets set for 2020 using 2007 as baseline year. Finally, Hakon Invest reports that ICA AB has a goal of reducing GHG emissions (CO 2 equivalents) 30% by 2020 compared to Consumer Staples (6) Carlsberg A/S (Beverages & Tobacco) Danisco A/S (Food Products) Swedish Match (Beverages & Tobacco) Electrolux (Household Durables) Nobia (Household Durables) Oriflame Cosmetics AB (Household & Personal) Key Findings: Respondents fear regulations will drive up costs for utilities, raw materials and transportation. Stricter energy efficiency standards are expected for household appliances. Improved brand profiling opportunities are identified for companies that tackle climate change issues. Risks and Opportunities: Half of the Consumer Staples sector consists of producers of beverages, tobacco and food. All of these companies disclose regulatory risks related to climate change. Danisco A/S, producer of food ingredients, sees the EU ETS and other political decisions as having a likely impact on costs of utilities, raw materials and potentially on operations. Additionally, as Danisco reports, US regulations for revised renewable fuel standards may impact the bio-fuel industry and potentially increase demand for energy crops, which could cause impacts on land use in other countries. Brewing company Carlsberg A/S anticipates that demand for further investments in emissions reductions on production sites will increase as a consequence of climate change regulation. For tobacco company Swedish Match, regulatory risks could arise from transport of goods, as a limitation in fuel supply may lead to increasing costs. Danisco A/S's manufacturing facilities may be exposed to physical risks related to rising sea levels, extreme weather events and resource shortage caused by changes in the climate. Carlsberg A/S does not consider physical risks as a threat to their production facilities, however they anticipate that changes in weather conditions may impact purchase and sourcing patterns. Household durables manufacturer Electrolux is exposed to risks through new legislation that is geared toward lower consumer-generated CO 2 in homes, and that requires stricter energy efficiency standards. For Europe, Minimum Energy Performance Standards (MEPS) for all major appliances need to be in place by All publicly disclosing companies state that current or anticipated regulatory requirements can at the same time offer opportunities, and could give them a competitive advantage over less prepared companies. Energy reductions may offer opportunities for more efficient use of resources. Danisco A/S sees potential opportunities arising from the development of integrated biorefineries to produce chemicals and transportation fuels. Electrolux sees opportunities in Europe for more energy efficient home appliances, as they state that one in every three appliances currently in operation is over ten years old. Oriflame Cosmetics AB anticipates that eco-friendly products using raw materials from nature will be an important way of branding the companies. Emissions: The three largest CO 2 emitters among disclosing companies in the Consumer Staples sector are, in descending order, Carlsberg A/S, Danisco A/S and Electrolux in terms of combined Scope 1 and 2 emissions. The former two companies also qualify for the EU ETS. Emissions reduction and energy targets: The largest emitters in this industry sector are also the companies with the most ambitious emissions reduction and energy targets. Electrolux has a group target to reduce energy use between 2005 and 2009 by 15%. The company reports that the target was almost achieved at the end of 2008 and the same target was renewed for the period 2008 through Danisco A/S reports an energy target of 10% per kilo product produced over three years, with 2007 as baseline. Carlsberg A/S applies both energy Increased precipitation entails that buildings used by H&M are at risk of being flooded, which could destroy merchandise, affect sales and damage buildings. H&M Hennes & Mauritz AB A possible opportunity associated with climate change could be an increasing demand amongst customers for environmentally sound products leading to increased sale of an environmentally friendly product range. Stockmann Group reduction and emissions targets in absolute figures over a period of four years. Finally, Swedish Match reports an average annual CO 2 reduction target of 2%, and states that several individual reduction projects have been initiated, such as steering employee business travel towards rail instead of air, use of video equipment to reduce travelling for business meetings, and optimisation of production and goods transport. 35

19 6 Risks, Opportunities and Emissions by Industry group " If no agreement is reached, the basis for a global carbon market will not be established and, consequently, there will be no global price on carbon dioxide emissions." Will setting a price on CO 2 emissions solve the long-term climate problem? Martin Gavelius, Director Energy & Utilities Climate Change Services Öhrlings PricewaterhouseCoopers AB Functioning global carbon markets are fundamental to establish a price on carbon dioxide emissions and ensure that companies will react and contribute to decreasing emissions. At the same time, there are political groups claiming that taxes on carbon dioxide represent a solution, or at least play an important role in addressing the climate problem. There is an urgent need for an agreement to be reached by COP15 in order to determine binding goals and establish a framework enabling the creation of fully functioning and transparent carbon markets. Challenges facing COP15 The world s leaders are facing a number of major challenges, some more difficult than others, which need to be solved at the United Nation s climate conference in Copenhagen in December 2009, COP15. If no agreement is reached, the basis for a global carbon market will not be established and, consequently, there will be no global price on carbon dioxide emissions. Threats from a corporate perspective The pricing of carbon dioxide emissions presumes global solutions. There are three essential requirements that have to be in place in order to create a reliable and functioning carbon market. Only then can the system achieve reliability and gain support from the public as an efficient tool to address climate issues. The political decisions must have a long-term perspective, primarily as regards the formats for allocation of emission rights, market places and other legislation. Emission rights trading must be transparent. Emissions can be reported and verified in a simple and uniform manner. Allocation of emission rights The basic principle behind the EU trading system for emission rights (EU ETS) is a common cap for the entire EU, limiting the amount of carbon dioxide emissions. When the marginal price of the emission right exceeds the marginal cost of abatement, there is an incentive for companies to switch to new technology and processes to reduce emissions. The question now is how the issue of allocation will be managed within the EU ETS in the third period, from 2013 to The credibility of the system has to be strengthened so that it generates the right price for carbon dioxide emissions. The most important changes, compared to the second period, are listed below: As of 2013, there will be one single emissions cap for the EU, instead of the national allocation which has applied to date. A successive reduction of the emissions cap will take place up until 2020, equivalent to a decrease of 1.74% per year. The main allocation principle for the third phase is auctioning, although for the majority of sectors there will be a gradual transition from free allocation to full auctioning. The portion that is auctioned will gradually increase up to 2027 when all of the emission rights will be auctioned. With a few exceptions the power industry will have full auctioning of emission rights from This is due, primarily, to the fact that the power industry can pass on increased costs to its end customers. That is both to companies and consumers. It is undeniable that one needs to review the way emission rights are allocated. However, there is reason to look closer at the proposal for auctioning of emission rights and the manner in which it will impact European companies. Auctioning, as it is proposed, implies that we will approximate the same effect as produced by the tax on CO 2, as companies will be forced to purchase emission rights. Together with the indirect cost surcharges for energy there will be major cost increases for companies and, in the wider sense, also for consumers and society in general. A more advantageous solution, compared with auctioning, is the free allocation of emission rights which allows the companies the possibility of trading in their emission rights. In such a case, from a global perspective one can achieve a higher efficiency in the investments, both on behalf of the companies and on behalf of society. Carbon leakage Within the EU there is currently a debate as to which of the sectors shall be determined as exposed to carbon leakage. Carbon leakage takes place when industry is forced to close down or move production to countries with less stringent environmental demands, and without a carbon price. The result would be that relatively low emitting European industries would be forced out of business, or lose significant market share to producers in countries without similar restrictions on emissions. This, in turn, results in an increase in emissions at global level contrary to the intention of the trading system. Consequently, in order to address the issue of carbon leakage, a proposal has been made that the energy intensive industries, where the risk for carbon dioxide leakage is the greatest, should also receive free allocation of emission rights during the third trading period. Transparent trading The starting point for transparent trading and pricing of emission rights is the same for all commercial exchanges. Supply and demand determines prices and all players must have access to the same information. Furthermore, the regulations regarding trading should be long-term, clear and well defined. A well functioning global trading system and pricing of carbon emissions requires an agreement on both climate goals and on the allocation between countries. Uniform reporting CDP has created a platform for analysing and comparing CO 2 emissions that provides critical transparency and a clear indication of the extent and nature of the real measures taken by the companies in reducing emissions. Consequently, this platform fills a clear gap in today s regulatory reporting, which has not kept apace with the new requirements of investors and other stakeholders. Clear and uniform standards in the financial portion of the companies reporting are critical, but even more important is that the reporting be simple. The answer to the question posed in the title of this article is partly yes. To set a price on carbon emissions will not solve the whole long-term climate problem. There is more to it than pricing. A global trading system is cost efficient and provides the greatest reduction of carbon dioxide for money, but if the reduction goals are inappropriate the trading system as a tool cannot solve the problem. If the politicians do not succeed in establishing the framework, then neither will the tools function. It is necessary to have a means of measuring carbon dioxide emissions and of monitoring the scope and steps the companies implement in order to address emissions in a transparent manner. It is time to include the companies climate impact, emissions, investments, emission rights, etc. in their regular reporting. It is often said that business can only manage what it measures. " A more advantageous solution, compared with auctioning, is the free allocation of emission rights which allows the companies the possibility of trading in their emission rights." " CDP has created a platform for analysing and comparing CO 2 emissions that provides critical transparency and a clear indication of the extent and nature of the real measures taken by the companies in reducing emissions." 36 37

20 7 Overview of CDP 7 Overview of CDP Table 1: Key trends snapshot 3 This table outlines some of the key findings from CDP 2009 by geography and industry data-set. 4 The turmoil in the financial markets and the global economy over the last year has highlighted the importance of effective disclosure and high-quality risk management. The financial crisis of 2008 suggests we need to better understand systemic risks that can cause significant de-stabilizing impacts in the global economy. Climate change has the potential to cause disruption in the form of unforeseen, high-impact events (such as extreme weather) as well as a longer term re assignment of value across countries, industries and corporations. The Intergovernmental Panel on Climate Change (IPCC) predicts that future climate impacts show that the consequences could vary from disruptive to catastrophic 1. So it is vital that policymakers, companies and investors have a full understanding of the associated risks and opportunities. According to HSBC research 2, governments around the world have allocated US$430 billion in fiscal stimulus to key climate change themes. Those providing the low carbon solutions are very well positioned to benefit, while those who ignore the risks gamble on being left behind. By convening the collective power of the investment community, represented in 2009 by more than 475 investors, with US$55 trillion in assets under management, CDP motivates more than 1800 companies globally to report their climate change strategies and greenhouse gas emissions. This global system provides the market, investors, policymakers and procurement directors with a clear understanding of how companies are positioned as we move towards a low carbon economy and ensures corporations provide full transparency on climate change. 1 items/2905.php 2 HSBC Global Research: A Climate for Recovery The colour of stimulus goes green. This year has seen considerable growth in responses from emerging economies such as China, South Africa and Korea, and CDP expanded in Russia in 2009 where major companies such as Gazprom and Novatek reported. CDP s reach continues to grow with the launch of the first CDP Europe report, covering the largest 300 European listed companies, as well as expansion into countries within Central and Eastern Europe. We have also opened new offices in Germany and Brazil, both key economies in the fight against climate change. While the quantity and quality of data available has increased significantly, so has the use of the data, which is acting as a catalyst for changing business behavior. CDP data is increasingly being integrated into mainstream financial analysis, is available through Bloomberg Professional Services, and used to provide sector based analysis to CDP signatory members. A recent report produced by Mercer supports this view. Some CDP signatories, such as CalSTRS are going a step further, using shareholder resolutions to encourage companies to report through CDP and implement climate change management strategies. We are also working with the Principles of Responsible Investment (PRI) to drive awareness and improve climate change reporting. CDP has recently entered a new partnership with financial information services company Markit to build a suite of indices based on the Carbon Disclosure Leadership Index, which will be licensed to exchangetraded fund (ETF) and structured product providers. CDP now works with more than 55 organisations including Dell, Unilever, Wal-Mart Stores and departments of the British Government to measure and assess climate change risk and opportunity through the supply chain. More than 800 companies report their climate change strategies through the CDP system to their customers and as a result we have seen a significant increase in the use of CDP data in procurement operations. Now procurement professionals can understand how their supply chains may be impacted and as a result begin to future-proof their procurement systems against climate change. The process of measuring emissions is central to emissions management and reduction. As regulatory frameworks develop to mandate emission reductions, CDP s role will expand. We will continue to work with corporations, policymakers and information users to produce practical and robust results that complement the development of mandatory reporting rules. In order to continue to provide the global hub for carbon reporting, CDP is currently undergoing a significant systems upgrade, designed to improve data comparability, facilitate benchmarking services and ultimately deliver data that is appropriate for investment analysis and regulatory submissions. In countries like the US and UK, where mandatory carbon reporting is on the horizon, CDP s systems will help companies prepare for such requirements and will eventually integrate with existing national registries to enable corporations to disclose more detailed and standardized data. Climate change is a global problem, which requires a global solution and by bridging the gaps between national governments and international businesses across the globe, CDP will help to connect the national and international climate change ecosystem. Sample: geography/ number of companies % of sample answering CDP 2009 % of sample answering CDP6 (2008) 5 % of responders seeing regulatory risks % of responders seeing regulatory opportunities Asia-ex JICK [35] Australia Brazil [83] Canada Central & Eastern Europe China Europe France Germany Global Global Electric Utility Global Transport India Ireland Italy [46] Japan [72] Korea [32] Latin America [52] Netherlands New Zealand Nordic [58] Portugal Russia South Africa Spain [71] Switzerland UK FTSE UK FTSE US S&P The numbers in this table are based on the total respondents at 10th July They may therefore vary from numbers in the rest of the report which are based on the number of companies who responded on time (e.g. 30th June for Global 500). 4 In some cases, the number of responses analyzed is slightly less than the number answering CDP 2009 due to takeovers, mergers and acquisitions. 5 Percentages in square brackets reflect a different sized sample in 2008, e.g.: in 2008 we wrote to 75 companies in Brazil, not 80; and in Japan we wrote to 150 companies in 2008, not 500. A dash (-) shows that sample was not in CDP6 (2008). 6 Asia excluding Japan, India, China and Korea. % of responders with Board level responsibility for climate change % of responders seeing physical risk % of responders seeing physical opportunities % of responders disclosing Scope 1 emissions % of responders disclosing Scope 2 emissions % of responders externally verifying emissions disclosures % of responders engaged/considering participation in emissions trading % of responders with an emissions reduction/energy reduction plan % of responders engaging with policy makers on climate change 38 39

21 Highlights in carbon regulation and outlook for Copenhagen 2009 has witnessed significant progress in the global approach to climate change. The Obama administration has introduced a new era in climate change policy in the US and, as a result, a global deal in Copenhagen this December appears more tangible. China, so integral to the success of Copenhagen, is set to meet ambitious renewable energy and energy efficiency targets and hosts some of the world s largest renewable energy companies. Brazil entered the new year with a new National Plan on Climate Change and national governments in industrialized countries including Japan and Australia are introducing new legislation to reduce emissions. Whilst the July G8 meeting agreed to prevent global temperatures rising beyond 2º Celsius (3º-4º Fahrenheit) against pre-industrial levels, and agreed on aims to cut greenhouse gas emissions by between 50 and 80% by mid-century they disappointed many by ducking the issue of medium term targets. Although the multilateral architecture still needs work, there is much to report on at a regional level. In Europe, the Energy and Climate Change package was approved in December 2008 which sets out the policy framework and accompanying measures to reduce emissions through the continuation (and expansion) of the EU Emissions Trading Scheme (EU ETS); targets for non-ets sectors and new targets for the promotion of renewable energy. In the US, the Obama administration moved early to set out its ambitions around climate change mitigation: We will harness the sun and the winds and the soil to fuel our cars and run our factories. 7 The Waxman-Markey bill was finally put before the House of Representatives in June and passed by a narrow margin. The proposed legislation would commit the US to reduce greenhouse gas emissions by 17% below 2005 levels by 2020 through a cap-and-trade 7 (Obama inauguration speech, January 21st, 2009) 40 system beginning in The bill will pass through various Senate Committees where amendments will be debated, before being put to a vote; most likely in October. In Australia, further work has progressed on the detail of the Carbon Pollution Reduction Scheme (CPRS) despite political challenges over possible competitive impacts in the face of the economic downturn. The Scheme, which would cover around 75% of total Australian emissions, is due to face a key vote later this year. Given the multinational nature of many companies, the evolution of these policies is likely to have significant implications on strategic direction and operations and many of the world s largest companies want to seize early mover advantage. Of course, the role of government is crucial in providing the regulatory frameworks. But investors and businesses will also play an essential role by driving capital flows towards the technologies which will allow economies to flourish and innovation to thrive as we transition to a low carbon economy. Already these same investors and businesses are being directly affected by climate change. Many companies report to CDP the material impacts of climate change on their operations, through increased flooding, water shortage, spread of disease and changing local weather patterns. Within the public sector, cities reporting through CDP also explain how they are planning to adapt to changes in weather patterns such as extreme heat and extreme precipitation. Investors, policymakers, procurement directors and other stakeholders need to build up the necessary comparable datasets in order to monitor and analyze changes; both in terms of the response to mitigation measures (such as carbon regulation) and adaptation policies and programmes. Integral to the success of the deal in Copenhagen will be the availability of this accurate reported data: if businesses don t measure current emissions now, it will be impossible for them to manage and reduce them in the future. This is where CDP s role is crucial. Progress on reporting standards While CDP has set the tone on matters of disclosure over the years and, for the first time this year, is now widening its approach to encompass performance, there are other valuable and complementary initiatives underway to address the clear requirement for the creation of a global carbon measurement and reporting system. While the financial accounting system has taken several hundred years to develop, carbon accounting is in its infancy. In order to achieve a coherent global system CDP is leading the work of the Climate Disclosure Standards Board (CDSB), working with Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers to develop robust accounting standards to enable carbon reporting through annual financial reports. CDP and CDSB will also work with the World Economic Forum to advise the G20 group of nations on climate change accounting in The CDP process demonstrates that corporations can lead the way in taking action that can be Measured, Reported & Verified (MRV). It also shows how international companies can reduce their emissions across the entirety of their operations on a global basis, even when subject to a range of different regulatory requirements. As more and more countries introduce climate change regulation, the CDP system supports companies by bridging the gap between international business and national reporting requirements and helps reduce the reporting burden on companies. The CDP Global Forum is part of the inaugural Climate Week NYC, when business leaders, heads of state and the world s major investors congregate in New York to prepare for negotiations at COP15. An agreement there will be a vital step towards success, but it is just as important to look beyond Copenhagen and to build the global systems required to combat dangerous climate change. CDP remains focused on and dedicated to this work and thanks all of the organisations that work with us to help realize this goal. 8 Appendix 1: CDLI Scores and Emissions Company Name Country CDLI Scope 1* Scope 2* Scope 2 Scope 3* CDP7 CDP6 Sector Score contractual* A.P. Moller - Maersk Denmark AQ * DP Transportation ABG Sundal Collier Norway NR X Financial services Acergy M.S. Limited Norway DP DP Oil & Gas Exploration & Production Ahlstrom Corporation Finland ,7 AQ * AQ * Paper & Forest Products Aker ASA Norway NR AQ * Industrial Conglomerates Aktiv Kapital ASA Norway NR X Financial services Alfa Laval Group Sweden AQ * AQ * Industrial Machinery Alm. Brand Denmark AQ * AQ * Financial services Alma Media Corporation Finland AQ * AQ * Publishing Amer Sports Finland DP DP Leisure Equipment & Products Assa Abloy Sweden AQ * AQ * Building Products Atea ASA Norway AQ * X IT Consulting & Services Atlas Copco Sweden AQ * AQ * Industrial Products & Services Atrium Ljungberg AB Sweden *** AQ * NR Property Auriga Industries Denmark AQ * X Chemicals Austevoll Seafood ASA Norway NR NR Food Products Axfood Sweden AQ * AQ * Multiline Retail Axis Communications AB Sweden DP NR Communications Equipment Bang & Olufsen a/s Denmark 48 (NP) AQ * AQ * Electronic Equipment & Instruments Boliden Group Sweden 44 (NP) AQ * AQ * Metals & Mining Bonheur ASA Norway NR NR Diversified Industrial BW Offshore AS Norway NR DP Oil & Gas Cargotec Corporation Finland 57 (NP) AQ * AQ * Industrial Products & Services Carlsberg A/S Denmark AQ * AQ * Beverages & Tobacco Castellum Sweden *** - AQ * AQ * Real Estate Management & Development Cermaq ASA Norway DP NR Food Products Citycon Oyj Finland DP NR Property Clas Ohlson AB Sweden AQ * AQ * Multiline Retail Coloplast A/S Denmark AQ * AQ * Health Care Equipment & Supplies Copenhagen Airports A/S Denmark AQ * AQ * Airports Dampskibsselskabet Denmark AQ * AQ * Surface Transport NORDEN A/S Danisco A/S Denmark AQ * AQ * Food Products Danske Bank A/S Denmark 63 (NP) AQ * AQ * Banks - Europe DFDS A/S Denmark 44 (NP) AQ * DP Surface Transport DLH Denmark NR X Paper & Forest Products DnB NOR Norway AQ * AQ * Banks - Europe DNO International ASA Norway 44 (NP) AQ * AQ * Oil & Gas Exploration & Production DSV A/S Denmark AQ * DP Surface Transport Ekornes ASA Norway NR NR Household Durables Electrolux Sweden AQ * AQ * Household Durables Electromagnetic Norway NR NR Oil & Gas Exploration & Geoservices ASA Production Elekta Sweden 61 (NP) AQ * DP Health Care Equipment & Supplies Elisa Corporation Finland DP NR Wireless Telecommunication Services 41

22 8 Appendix 1: CDLI Scores and Emissions Company Name Country CDLI Scope 1* Scope 2* Scope 2 Scope 3* CDP7 CDP6 Sector Score contractual* Eniro AB Sweden 45 (NP) AQ * AQ * Advertising Ericsson Sweden AQ * AQ * Communications Equipment Fabege Sweden AQ * AQ * Real Estate Management & Development Finnair Finland AQ * AQ * Airlines Fiskars Corporation Finland DP DP Industrial Products & Services FLSmidth & Co. A/S Denmark DP DP Industrial Products & Services Formuepleje A/S Denmark NR NR Diversified Financials Europe Fondsmæglerselskab Fortum Finland AQ * AQ * Electric Utilities International Fred. Olsen Energy ASA Norway NR NR Surface Transport Frontline ASA Norway NR NR Surface Transport G4S Plc (formerly United AQ * X Commercial Services & Group 4 Securicor) Kingdom Supplies Ganger Rolf ASA Norway NR NR Diversified Industrial Genmab A/S Denmark 30 (NP) AQ * AQ * Biotechnology Getinge Sweden 48 (NP) AQ * AQ * Health Care Equipment & Supplies GN Store Nord A/S Denmark 5 (NP) AQ * IN * Health Care Equipment & Supplies Golden Ocean Norway NR NR Surface Transport Management AS Gunnebo Sweden AQ * AQ * Industrial Products & Services H&M Hennes & Mauritz AB Sweden AQ * AQ * Textiles, Apparel & Luxury Goods Hafslund ASA Norway AQ * NR Energy Hakon Invest AB Sweden *** 3705** AQ * AQ * Multiline Retail Hexagon Sweden DP DP Industrial Conglomerates Holmen Sweden AQ * AQ * Paper & Forest Products Hufvudstaden Sweden 41 (NP) AQ * AQ * Real Estate Management & Development Huhtamäki Oyj Finland 42 (NP) AQ * AQ * Containers & Packaging Husqvarna AB Sweden 39 (NP) AQ * AQ * Household durables/electrical Equipment IC Companys A/S Denmark NR DP Household & Personal Products Industrivärden Sweden AQ * AQ * Diversified Financials Europe Intrum Justitia AB (publ) Sweden 22 (NP) AQ * AQ * Financial services Investment AB Kinnevik Sweden AQ * AQ * Diversified Financials Europe Investment AB Latour Sweden 22 (NP) AQ * X Diversified Financials Europe Investment AB Öresund Sweden NR NR Diversified Financials Europe Investor AB Sweden 64 (NP) AQ * AQ * Diversified Financials Europe JM AB Sweden *** 8745,5 AQ * AQ * Construction & Engineering Jyske Bank A/S Denmark DP DP Banks Europe Kemira Corporation Finland *** - AQ * AQ * Diversified Chemicals Kesko Corporation Finland 71 (NP) AQ * AQ * Multiline Retail Kone Oyj Finland AQ * DP Industrial Konecranes Finland 33 (NP) AQ * NR Industrial Products & Services Kongsberg Gruppen ASA Norway NR DP Industrial Products & Services Kungsleden Sweden 67 (NP) AQ * AQ * Real Estate Management & Development Lassila & Tikanoja Finland 54 (NP) AQ * AQ * Environmental Services Lemminkainen Group Finland DP DP Construction & Engineering Lennart Wallenstam Sweden NR IN * Property Byggnads AB Lerøy Seafood Group Norway NR X Food Products Lindab International AB Sweden 58 (NP) AQ * AQ * Building Products Lundbeck A/S Denmark *** - AQ * AQ * Pharmaceuticals Lundin Petroleum Sweden ,5 AQ * AQ * Oil & Gas Exploration & Production Marine Harvest Group Norway DP NR Food Products 42 Company Name Country CDLI Scope 1* Scope 2* Scope 2 Scope 3* CDP7 CDP6 Sector Score contractual* Meda AB Sweden AQ * AQ * Pharmaceuticals Melker Schörling AB Sweden DP AQ * Diversified Financials Metso Finland AQ * AQ * Industrial Machinery Millicom International Sweden AQ * AQ * Wireless Telecommunication Cellular SA Services Modern Times Group Sweden 43 (NP) AQ * DP Broadcasting & Cable TV MTG AB Monberg & Thorsen Denmark NR X Diversified Financials M-real Corporation Finland AQ * AQ * Paper & Forest Products NCC Sweden 66 (NP) AQ * AQ * Construction & Engineering Neste Oil Oyj Finland *** AQ * AQ * Oil & Gas Refining & Marketing NKT Holding A/S Denmark AQ * AQ * Industrial Conglomerates Nobia Sweden AQ * AQ * Household Durables Nokia Group Finland *** AQ * AQ * Telecommunications Nokian Tyres Group Finland 23 (NP) AQ * NR Industrial Products & Services Nordea Bank Sweden 58 (NP) AQ * AQ * Banks - Europe Norsk Hydro Norway AQ * AQ * Metals & Mining Norske skogindustrier Norway AQ * AQ * Paper & Forest Products Norwegian Property ASA Norway NR DP Property Novo Nordisk Denmark AQ * AQ * Pharmaceuticals Novozymes A/S Denmark AQ * AQ * Biotechnology Odfjell SE Norway IN X Surface Transport Olav Thon Norway NR DP Property Eiendomsselskap ASA Opera Software ASA Norway NR X IT Consulting & Services OP-Pohjola Bank Group Finland 24 (NP) AQ * AQ * Banks - Europe Oriflame Cosmetics AB Sweden AQ * AQ * Household & Personal Products Orion Group Finland AQ * AQ * Pharmaceuticals Orkla ASA Norway AQ * AQ * Diversified Industrial Outokumpu Oyj Finland AQ * AQ * Metals & Mining Outotec Oyj Finland AQ * NR Industrial Products & Services PA Resources AB Sweden DP X Oil & Gas Exploration & Production Peab AB Sweden 26 (NP) AQ * NR Construction & Engineering Per Aarsleff Denmark NR X Construction & Engineering Petroleum Geo-Services Norway 70 (NP) AQ * AQ * Energy Equipment & Services ASA Pronova BioPharma ASA Norway AQ * DP Pharmaceuticals Prosafe SE Cyprus AQ * AQ * Energy Equipment & Services Pöyry Plc Finland NR NR Energy Equipment & Services Q-Med AB Sweden AQ * AQ * Biotechnology Questerre Energy Cor Canada NR X Oil & Gas Exploration & Production Ramirent Finland NR NR Industrial Products & Services Ratos AB Sweden 12 (NP) AQ * AQ * Diversified Financials Europe Rautaruukki Oyj Finland 69 (NP) AQ * AQ * Industrial Products & Services REC Group Norway NR AQ * Energy Equipment & Services Rockwool International A/S Denmark AQ * NR Industrial Products & Services Royal Caribbean International Norway NR NR Surface Transport Royal Unibrew Denmark 34 (NP) AQ * X Beverages & Tobacco Ruukki Group Oyj Finland NR NR Construction Materials SAAB Sweden *** AQ * AQ * Aerospace & Defense Salmar ASA Norway 54 (NP) AQ * X Food Products Sampo plc Finland DP DP Insurance - Europe Sandvik AB Sweden 73 (NP) AQ * AQ * Industrial Products & Services Sanoma Finland AQ * AQ * Publishing SAS Sweden *** - AQ * AQ * Airlines SCA Sweden ** AQ * AQ * Paper & Forest Products 43

23 8 Appendix 1: CDLI Scores and Emissions Company Name Country CDLI Scope 1* Scope 2* Scope 2 Scope 3* CDP7 CDP6 Sector Score contractual* Scania & Heavy Trucks Sweden AQ * AQ * Construction & Farm Machinery Schibsted ASA Norway NR NR Publishing Schouw & Co Denmark NR X Diversified Industrial Seadrill Management AS Norway NR DP Energy Equipment & Services SEB Sweden AQ * AQ * Banks - Europe Seco Tools AB Sweden DP X Industrial Products & Services Securitas AB Sweden DP DP Commercial Services & Supplies Sevan Marine ASA Norway NR NR Oil & Gas Exploration & Production Sjælsø Gruppen Denmark NR X Property Skanska AB Sweden *** AQ * AQ * Construction & Engineering SKF Sweden AQ * AQ * Industrial Products & Services Solar Denmark NR X Construction Materials Spar Nord Bank A/S Denmark NR DP Banks Europe Sponda Plc Finland NR AQ * Property SSAB Sweden 72 (NP) AQ * AQ * Steel StatoilHydro Norway AQ * AQ * Integrated Oil & Gas Stockmann Group Finland AQ * AQ * Multiline Retail Stolt Nielsen SA United Kingdom NR NR Surface Transport Stora Enso Finland *** AQ * AQ * Paper & Forest Products Storebrand Norway AQ * AQ * Insurance Europe Subsea 7 Norway AQ * AQ * Construction & Engineering Swedbank Sweden AQ * AQ * Banks Europe Swedish Match Sweden *** AQ * AQ * Beverages & Tobacco Svenska Handelsbanken Sweden 11 (NP) AQ * AQ * Banks Europe Sydbank A/S Denmark DP DP Banks Europe Tandberg Norway NR DP Wireless Telecommunication Services TDC A/S Denmark AQ * AQ * Integrated Telecommunication Services Teekay Petrojarl ASA Norway AQ * AQ * Oil & Gas Exploration & Production Tele2 AB Sweden AQ * AQ * Integrated Telecommunication Services Telenor Group Norway 65 (NP) AQ * AQ * Integrated Telecommunication Services TeliaSonera Sweden AQ * AQ * Telecommunications TGS-NOPEC Geophysical Norway NR DP Energy Equipment & Services Company ASA The East Asiatic Company Denmark DP DP Diversified Consumer Ltd. A/S Services TietoEnator Sweden AQ * NR IT Consulting & Services Tomra Systems ASA Norway AQ * AQ * Environmental Services Topdanmark Denmark AQ * DP Insurance Europe TORM AS Denmark *** AQ * AQ * Surface Transport Transatlantic AB Sweden AQ * NR Surface Transport Trelleborg AB Sweden AQ * AQ * Industrial Products & Services TrygVesta A/S Denmark AQ * AQ * Insurance - Europe UPM-Kymmene Corp Finland AQ * AQ * Paper & Forest Products Uponor Corporation Finland NR NR Construction & Farm Machinery & Heavy Trucks Veidekke ASA Norway AQ * AQ * Construction & Engineering West Siberian Sweden NR X Oil & Gas Exploration & Resources Ltd Production Vestas Wind Systems A/S Denmark AQ * AQ * Energy Equipment & Services Wilh. Wilhelmsen ASA Norway IN NR Surface Transport William Demant Holding A/S Denmark AQ * NR Health Care Equipment & Supplies Vizrt Norway NR X IT Consulting & Services 44 Company Name Country CDLI Scope 1* Scope 2* Scope 2 Scope 3* CDP7 CDP6 Sector Score contractual* Volvo Sweden 60 (NP) AQ * AQ * Automobiles Vostok Nafta Sweden NR NR Diversified Financials Europe Wärtsilä Corporation Finland AQ * AQ * Industrial Products & Services Yara International ASA Norway NR IN Speciality Chemicals YIT Group Finland DP DP Real Estate Management & Development Key AQ: Answered questionnaire IN: Information provided DP: Declined to participate NR: No response NI: Removed from Nordic 190 (CDP6) and 200 (CDP7) sample X: Company not in sample that year L: Late response. Answered quitestionnaire but score is not available here NP: Response not made publicly available * Any reported emissions, where the response was made publicly available, in metric tons ** Company answered the question but where not able to provide full detail *** Company did provide detail in relation to its contractual Scope 2 emissions. Please refer to the company s response 45

24 9 Appendix 2: CDP 2009 Questionnaire 9 Appendix 2: CDP 2009 Questionnaire Information about how to respond to this section may be found in The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition) developed by the World Resources Institute and the World Business Council for Sustainable Development ( the GHG Protocol ), see ISO is compatible with the GHG Protocol as are a number of regional/national programme protocols. For more information see and the CDP 2009 Reporting Guidance. Risks and Opportunities 1. Regulatory Risks: (CDP6 1(a)(i)) 1.1. Is your company exposed to regulatory risks related to climate change? 2. Physical Risks: (CDP6 1(a)(ii)) 2.1. Is your company exposed to physical risks from climate change? 3. Other Risks: (CDP6 1(a)(iii)) 3.1. Is your company exposed to other risks as a result of climate change? 4. Regulatory Opportunities: (CDP6 1(b)(i)) 4.1. Do regulatory requirements on climate change present opportunities for your company? 5. Physical Opportunities: (CDP6 1(b)(ii)) 5.1. Do physical changes resulting from climate change present opportunities for your company? 6. Other Opportunities: (CDP6 1(b)(iii)) 6.1. Does climate change present other opportunities for your company? Where the answer to any of the questions in the risks and opportunities section (see left hand column) is yes, please provide the following information if relevant: Describe the company s process for identifying risks/opportunities and assessing the degree to which they could affect the business, including the financial implications. Describe current and/or anticipated risks/opportunities. Explain the way in which the risks/opportunities could affect your business and your value chain, including the financial implications. What geographical areas are affected by the risks/opportunities you have identified. Outline the timescales over which the risks/opportunities are expected to materialise. Explain any actions the company has taken or plans to take to manage, adapt to and/or exploit the risks/opportunities that have been identified including the financial implications of those actions. Comment on whether your views on risks/opportunities have changed in the past twelve months. Where the answer to any of the questions is no, please: Explain why you do not consider your company to be exposed to risks/presented with opportunities. Explain the company process for identifying risks/opportunities and assessing the degree to which they could affect the business. Comment on whether your views have changed in the past twelve months. 7. Reporting Year: (CDP6 Q2(a)(ii)) Please also provide CDP with responses to questions 7, 8, 9, 10.1, 10.2, 11.1 and 11.2 for the three years prior to the current reporting year if you have not done so before or if this is the first time you have answered a CDP information request Please state the start date and end date of the year for which you are reporting GHG emissions. 8. Reporting Boundary: (CDP6 Q2(a)(i)) 8.1. Please indicate the category that describes the company, entities, or group for which Scope 1 and Scope 2 GHG emissions are reported. Companies over which financial control is exercised per consolidated audited financial statements; Companies over which operational control is exercised; Companies in which equity share is held; Other (please provide details) Please state whether any parts of your business or sources of GHG emissions are excluded from your reporting boundary. 9. Methodology: (CDP6 Q2(a)(iii)) 9.1. Please describe the process used by your company to calculate Scope 1 and Scope 2 GHG emissions including the name of the standard, protocol or methodology you have used to collect activity data and calculate Scope 1 and Scope 2 GHG emissions. Please also provide: 9.2. Details of any assumptions made The names of and links to any calculation tools used The global warming potentials you have applied and their origin The emission factors you have applied and their origin. Note about questions 10, 11 and 13 When providing answers to questions 10, 11 and 13, please do not deduct offset credits, Renewable Energy Certificates etc, or net off any estimated avoided emissions from the export of renewable energy, carbon sequestration (including enhanced oil recovery) or from the use of goods and services. Opportunities to provide details of activities that reduce or avoid emissions are provided elsewhere in the information request. Carbon dioxide emissions from biologically sequestered carbon e.g. carbon dioxide from burning biomass/biofuels should be reported separately from emissions Scopes 1, 2 and 3. If relevant, please report these emissions in question 15. However, please do include any nitrous oxide or methane emissions from biomass/biofuel combustion in your emissions under the three scopes. 10. Scope 1 Direct GHG Emissions: (CDP6 Q2(b)(i)) Electric utilities should report emissions by country/region using the table in question EU3. Please provide: 46 47

25 9 Appendix 2: CDP 2009 Questionnaire Total gross global Scope 1 GHG emissions in metric tonnes of CO2-e 48 Please break down your total gross global Scope 1 emissions by: Country or region Where it will facilitate a better understanding of your business, please also break down your total global Scope 1 emissions by: Business division and/or Facility Please break down your total global Scope 1 GHG emissions in metric tonnes of the gas and metric tonnes of CO2-e by GHG type If you have not provided any information about Scope 1 emissions in response to the questions above, please explain your reasons and describe any plans you have for collecting Scope 1 GHG emissions information in future. 11. Scope 2 Indirect GHG Emissions: (CDP6 Q2(b)(i)) Important note about emission factors where zero or low carbon electricity is purchased: The emissions factor you should use for calculating Scope 2 emissions depends upon whether the electricity you purchase is counted in calculating the grid average emissions factor or not see below. You can find this out from your supplier. Electricity that IS counted in calculating the grid average emissions factor: Where electricity is sourced from the grid and that electricity has been counted in calculating the grid average emissions factor, Scope 2 emissions must be calculated using the grid average emissions factor, even if your company purchases electricity under a zero or low carbon electricity tariff. Electricity that is NOT counted in calculating the grid average emissions factor: Where zero or low carbon electricity is sourced from the grid or otherwise transmitted to the company and that electricity is not counted in calculating the grid average, the emissions factor specific to that method of generation can be used, provided that any certificates quantifying GHG-related environmental benefits claimed for the electricity are not sold or passed on separately from the electricity purchased. Please provide: Total gross global Scope 2 GHG emissions in metric tonnes of CO2-e Please break down your total gross global Scope 2 emissions by: Country or region Where it will facilitate a better understanding of your business, please also break down your total global Scope 2 emissions by: Business division and/or Facility If you have not provided any information about Scope 2 emissions in response to the questions above, please explain your reasons and describe any plans you have for collecting Scope 2 GHG emissions information in future. 12. Contractual Arrangements Supporting Particular Types of Electricity Generation: (CDP6 Q2(b)(i) Guidance) If you consider that the grid average factor used to report Scope 2 emissions in question 11 above does not reflect the contractual arrangements you have with electricity suppliers, (for example, because you purchase electricity using a zero or low carbon electricity tariff), you may calculate and report a contractual Scope 2 figure in response to this question, showing the origin of the alternative emission factors and information about the tariff If you retire any certificates (eg: Renewable Energy Certificates) associated with zero or low carbon electricity, please provide details. 13. Scope 3 Other Indirect GHG Emissions: (CDP6 Q2(c)) For each of the following categories, please: Describe the main sources of emissions, Report emissions in metric tonnes of CO2-e, State the methodology, assumptions, calculation tools, databases, emission factors (including sources) and global warming potentials (including sources) you have used for calculating emissions Employee business travel External distribution/logistics Use/disposal of company s products and services For auto manufacture and auto component companies please refer to the additional questions for these sectors before completing question Company supply chain Other If you have not provided information about one or more of the categories of Scope 3 GHG emissions in response to the questions above, please explain your reasons and describe any plans you have for collecting Scope 3 indirect emissions information in future. 14. Emissions Avoided Through use of Goods and Services: (New for CDP 2009) If your goods and/or services enable GHG emissions to be avoided by a third party, please provide details including the estimated avoided emissions, the anticipated timescale over which the emissions are avoided and the methodology, assumptions, emission factors (including sources), and global warming potentials (including sources) used for your estimations. 15. Carbon Dioxide Emissions from Biologically Sequestered Carbon: (New for CDP 2009) An example would be carbon dioxide from burning biomass/biofuels Please provide the total global carbon dioxide emissions in metric tonnes CO2 from biologically sequestered carbon. 16. Emissions Intensity: (CDP6 Q3(b)) Please supply a financial emissions intensity measurement for the reporting year for your combined Scope 1 and 2 emissions, including a description of the measurement, The units, and The resulting figure Please supply an activity related intensity measurement for the reporting year for your combined Scope 1 and 2 emissions, including a description of the measurement, The units, and 49

26 9 Appendix 2: CDP 2009 Questionnaire The resulting figure. 17. Emissions History: (CDP6 Q2(f)) Do emissions for the reporting year vary significantly compared to previous years? 50 If so, please explain why, and: Estimate the percentage by which emissions vary compared with the previous reporting year. 18. External Verification/Assurance: (CDP6 Q2(d)) Has any of the information reported in response to questions been externally verified/assured in whole or in part? If so, please: State the scope/boundary of emissions included within the verification/assurance exercise State what level of assurance, (eg: reasonable or limited) has been given Provide a copy of the verification/assurance statement Specify the standard against which the information has been verified/assured If not, please state whether you have plans for GHG emissions accounting information to be externally verified/assured in future. 19. Data Accuracy: (CDP6 Q2(e) New wording for CDP 2009) What are the main sources of uncertainty in your data gathering, handling and calculations e.g.: data gaps, assumptions, extrapolation, metering/measurement inaccuracies etc? How do these uncertainties affect the accuracy of the reported data in percentage terms or an estimated standard deviation? Does your company report GHG emissions under any mandatory or voluntary scheme (other than CDP) that requires an accuracy assessment? If so, please provide: The name of the scheme The accuracy assessment for GHG emissions reported under that scheme for the last report delivered. 20. Energy and Fuel Requirements and Costs: (New for CDP 2009) Please provide the following information for the reporting year: Cost of purchased energy The total cost of electricity, heat, steam and cooling purchased by your company Please break down the costs by individual energy type. Cost of purchased fuel The total cost of fuel purchased by your company for mobile and stationary combustion Please break down the costs by individual fuel type. Energy and fuel inputs The following questions are designed to establish your company s requirements for energy and fuel (inputs). Please note that MWh is our preferred unit for answers as this helps with comparability and analysis. Although it is usually associated with electricity, it can equally be used to represent the energy content of fuels (see CDP 2009 Reporting Guidance for further information on conversions to MWh). Purchased energy input Your company s total consumption of purchased energy in MWh. Purchased and self produced fuel input Your company s total consumption in MWh of fuels for stationary combustion only. This includes purchased fuels, as well as biomass and self-produced fuels where relevant Please break down the total consumption of fuels reported in answer to question 20.4 by individual fuel type in MWh. Energy output In this question we ask for information about the energy in MWh generated by your company from the fuel that it uses. Comparing the energy contained in the fuel before combustion (question 20.4) with the energy available for use after combustion will give an indication of the efficiency of your combustion processes, taking your industry sector into account What is the total amount of energy generated in MWh from the fuels reported in question 20.4? What is the total amount in MWh of renewable energy, excluding biomass, that is self-generated by your company? Energy exports This question is for companies that export energy that is surplus to their requirements. For example, a company may use electricity from a combined heat and power plant but export the heat to another organisation What percentage of the energy reported in response to question 20.5 is exported/sold by your company to the grid or to third parties? What percentage of the renewable energy reported in response to question 20.6 is exported/sold by your company to the grid or to third parties? 21. EU Emissions Trading Scheme: (CDP6 Q2(g)(i) New wording for CDP 2009) Electric utilities should report allowances and emissions using the table in question EU Does your company operate or have ownership of facilities covered by the EU Emissions Trading Scheme (EU ETS)? If not, please proceed to question 22. If yes, please give details of: The allowances allocated for free for each year of Phase II for facilities which you operate or own. (Even if you do not wholly own facilities, please give the full number of allowances.) The total allowances purchased through national auctioning processes for the period 1 January 2008 to 31 December 2008 for facilities that you operate or own. (Even if you do not wholly own facilities, please give the total allowances purchased through auctions by the facilities for this period.) The total CO2 emissions for 1 January 2008 to 31 December 2008 for facilities which you operate or own. (Even if you do not wholly own facilities, please give the total emissions for this period.) 22. Emissions Trading: (CDP6 Q2(g)(ii) New wording for CDP 2009) 51

27 Electric utilities should read EU6 before answering these questions Please provide details of any emissions trading schemes, other than the EU ETS, in which your company already participates or is likely to participate within the next two years What is your overall strategy for complying with any schemes in which you are required or have elected to participate, including the EU ETS? Have you purchased any project-based carbon credits? If so, please indicate whether the credits are to meet one or more of the following commitments: Primarily for compliance purposes, Primarily for voluntary offsetting of your own emissions, Other (please describe). Please also: Provide details including the type of unit, volume and vintage purchased and the standard/scheme against which the credits have been verified, issued and retired (where applicable) Have you been involved in the origination of project-based carbon credits? If so: Please provide details including: Your role in the project(s), The locations and technologies involved, The standard/scheme under which the projects are being/have been developed, Whether emissions reductions have been validated or verified, The annual volumes of generated/projected carbon credits, Retirement method if used for own compliance or offsetting Are you involved in the trading of allowances under the EU ETS and/or project-based carbon credits as a separate business activity, or in direct support of a business activity such as investment fund management or the provision of offsetting services? If so: Please provide details of the role performed. 23. Reduction Plans: (CDP6 Q3(a)) Does your company have a GHG emissions and/or energy reduction plan in place? If not: Please explain why and answer question 23.8 if possible. Goal setting If your company does have a plan, please provide the following information: Do you have an emissions and/or energy reduction target(s)? What is the baseline year for the target(s)? What is the emissions and/or energy reduction target(s)? What are the sources or activities to which the target(s) applies? Over what period/timescale does the target(s) extend? GHG emissions and energy reduction activities What activities are you undertaking or planning to undertake to reduce your emissions/energy use? Goal evaluation What benchmarks or key performance indicators do you use to assess progress against the emissions/energy reduction goals you have set? Goal achievement What emissions reductions, energy savings and associated cost savings have been achieved to date as a result of the plan and/or the activities described above? Please state the methodology and data sources you have used for calculating these reductions and savings What investment has been required to achieve the emissions reductions and energy savings targets or to carry out the activities listed in response to question 23.8 above and over what period was that investment made? Goal planning and investment Electric utilities should read the table in question EU3 for giving details of forecasted emissions What investment will be required to achieve the future targets set out in your reduction plan or to carry out the activities listed in response to question 23.8 above and over what period do you expect payback of that investment? Please estimate your company s future Scope 1 and Scope 2 emissions for the next five years for each of the main territories or regions in which you operate or provide a qualitative explanation for expected changes that could impact future GHG emissions Please estimate your company s future energy use for the next five years for each of the main territories or regions in which you operate or provide a qualitative explanation for expected changes that could impact future GHG emissions Please explain the methodology used for your estimations and any assumptions made. 24. Planning: (CDP6 Q3(c)) How do you factor the cost of future emissions into capital expenditures and what impact have those estimated costs had on your investment decisions? 25. Responsibility: (CDP6 Q4(a)) Does a Board Committee or other executive body have overall responsibility for climate change? If not: Please state how overall responsibility for climate change is managed and indicate the highest level within your company with responsibility for climate change. If so, please provide the following information: Which Board Committee or executive body has overall responsibility for climate change? 52 53

28 Partners What is the mechanism by which the Board or other executive body reviews the company s progress and status regarding climate change? Report partners: 26. Individual Performance: (CDP6 Q4(b)) Do you provide incentives for individual management of climate change issues including attainment of GHG targets? If so: Are those incentives linked to monetary rewards? Report sponsors: Who is entitled to benefit from those incentives? 27. Communications: (CDP6 Q4(c)) Do you publish information about the risks and opportunities presented to your company by climate change, details of your emissions and plans to reduce emissions? If so, please indicate which of the following apply and provide details and/or a link to the documents or a copy of the relevant excerpt: The company s Annual Report or other mainstream filings Voluntary communications (other than to CDP) such as Corporate Social Responsibility reporting. 28. Public Policy: (CDP6 Q4(d)) Do you engage with policymakers on possible responses to climate change including taxation, regulation and carbon trading? If so, please provide details. Launch sponsors Our sincere thanks are extended to the following: British Embassy Stockholm, Confederation of Danish Industry, Copenhagen Climate Council, Danish Commerce and Companies Agency, Danish Ministry of Climate and Energy, Finnair, Finnish Ministry of the Environment, Global Reporting Initiative, Innovation Norway, Ilmarinen, Norwegian Ministry of the Environment, Norwegian Ministry of Finance, Principles for Responsible Investing, Stockholm University Department of Physical Geography and Quaternary Geology, Swedish Ministry of Enterprise, Energy and Communications, United Nations Global Compact, World Resources Institute. Design implementation and production by Lavish. Lavish is a leading Creative Services agency based in London. We specialise in the creation and management of brand assets and communication materials for clients in the corporate and not-for-profit sectors. For more information on Lavish visit

29 CDP Contact Information for Back Cover of Nordic CDP 2009 Report Amanda Haworth Wiklund Director Nordic Region Paul Dickinson Chief Executive Officer Paul Simpson Chief Operating Officer Sue Howells Head of Global Partnerships Daniel Turner Head of Disclosure Zoe Riddell Head of CDP Institutional Investors Carbon Disclosure Project Nordic office Box Stockholm Tel: +46 (0) Head office 40 Bowling Green Lane London EC1R 0NE United Kingdom Tel: + 44 (0) / 5667 Fax: + 44 (0) [email protected] Report Partner Sustainable Investment Research Platform/ Umeå School of Business Ian Hamilton, Researcher Sustainable Investments Lars Hassel, Program Director Sustainable Investments Anders Isaksson, Researcher Sustainable Investments Rickard Lundgren, Research Assistant SE Umeå Sweden +46(0) ( CDP Board of Trustees Chair: Robert Napier The Met Office Alan Brown Schroders Jeremy Smith Berkeley Energy Christoph Schroeder TVM Capital Takejiro Sueyoshi James Cameron Climate Change Capital Tessa Tennant Report manager: Cornelia Moseid Layout: Mambojambo AB Printer: Strands Grafiska AB This report is printed on Munken Lynx paper, which is TCF (Total chlorin free) and FSC certified, from Munkedals paper mill. The production of the report has been carbon offset through ZeroMission Important Notice The contents of this report may be used by anyone providing acknowledgement is given to Carbon Disclosure Project. This does not represent a license to repackage or resell any of the data reported to CDP and presented in this report. If you intend to do this, you need to obtain express permission from CDP before doing so. SIRP and CDP prepared the data and analysis in this report based on responses to the CDP 2009 information request. SIRP and CDP do not guarantee the accuracy or completeness of this information. SIRP and CDP make no representation or warranty, express or implied, and accept no liability concerning the fairness, accuracy, or completeness of the information and opinions contained herein. All opinions expressed herein by CDP and/or SIRP are based on their judgment at the time of this report and are subject to change without notice due to economic, political, industry and firm-specific factors. Guest commentaries where included in this report reflect the views of their respective authors. Carbon Disclosure Project and CDP refers to Carbon Disclosure Project, a United Kingdom company limited by guarantee, registered as a United Kingdom charity number Carbon Disclosure Project.