Investment in climate change to rise in 70% of firms

Online, May 28, 2010 (Newswire.com) - A new survey from Ernst & Young on C-suite attitudes towards climate change shows that leading companies are taking their cues from the market by investing in climate change initiatives, reporting on their performance and leaning on their supply chains to reduce carbon emissions, rather than waiting for regulatory conditions to solidify.

The report, "Action amid Uncertainty: The business response to climate change", includes opinions from 300 global executives from corporations with annual revenue of $1bn or more on how they are responding to climate change challenges.

Ernst & Young conducted the survey to know about executives views on climate change and learn about the overall climate change frameworks in place at their companies. The survey found that 70% of these executives from 16 countries and 18 different industry sectors intend to increase investment in climate change initiatives such as energy efficiency and product development over the next two years. For nearly half of those in the survey, the expenditure will equal between 0.5% to more than 5% of their revenue.

Richard Morley, Director at Envido said "Even with carbon legislation delayed globally, executives are still investing in climate change because they see them as initiatives that are going to help their bottom line and help them manage risks."
There are five factors, according to the survey, that drive climate change initiatives and are more important than regulation: energy reduction, changing consumer demands, the development of new products or services, competitive threats, and stakeholder expectations.

Investment on Climate change will help them to make money, save money and stay relevant to customers

Companies are viewing their supply chains are attractive opportunities to reduce carbon emissions and the energy costs that are built up in the entire supply chain. 36% of respondents said they were working directly with suppliers with the expectation that they would reduce their carbon footprint, while another 30% have started discussing climate change initiatives with their suppliers.

As an interesting fact, 43% of respondents believe that equity analysts are including climate change factors in their valuations; 30% anticipate climate change factors to find their way in these analyses in the next five years.

However, the report highlights the need for reporting and transparency among companies. While, 40% of those in the survey called themselves industry leaders for their climate change performance, only 28% admitted they benchmark their performance against their peers.

At the moment, nearly two-thirds of respondents communicate their carbon emissions data in an annual sustainability report. Of those, 62% have data verified by a third-party to meet increasing demands for transparency, and 30% of these companies have an individual managing their climate change initiatives full-time.

Other findings from the report include that just 1% of respondents said that they would slow down their climate change initiatives following the less-than-hoped-for result from the Copenhagen climate change conference, whereas, 66% said they would continue with their existing strategy, and 31% who said investment in climate change would increase.