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LONDON: A report by the Carbon Disclosure Project (CDP) says companies on the S&P 500 index that plan for climate change produce a 67 percent higher return on equity (ROE) than companies who don't.

For the past nine years the world's largest investors, now representing US$92 trillion in assets, have asked the CDP to administer their request for climate change disclosure from S&P 500 companies in the form of a Climate Disclosure Leadership Index (CDLI).

The bar for admission to the CDLI has risen from a minimum score of 61 in 2008 to 97 in 2014.

Analysis over the last three years reveals that those who lead on climate disclosure and performance have produced 18 percent higher ROE than their sector peers and a 50 percent lower volatility of earnings and are 21 percent more likely to increase shareholder dividends.

CSX 2CDP CEO Paul Simpson noted: "With this comprehensive analysis of S&P 500 companies, the market has new, compelling evidence of the link between industry leadership on climate change and corporate profitability. There is only upside for corporations acting in a prudent way to address the challenges of climate change – for which disclosure through CDP lays the foundation."

CSX, one of the few S&P transportation companies on the CDLI, says it raised its performance score to "an all-time high" of 98 this year after five years on the index.

"CSX is dedicated to investing in the safe, reliable, environmentally-friendly rail network of the future to continue to drive profitable growth and shareholder value creation," said Fredrik Eliasson, executive vice president and chief financial officer. "This commitment to sustainable growth includes aggressive measurement and transparency to benefit shareholders and employees alike."

According to Eliasson, 40 percent of CSX traffic is now intermodal. It's principal customers are APL, CMA CGM, Hapag Lloyd, Hyundai, JB Hunt, Maersk, Mediterranean Shipping, Pacer, Schneider National and UPS – which is also on the CDLI for the fourth consecutive year. With a score of 100 it is ranked in the top 10 percent of reporting companies and one of only 14 to receive such a score.

"This year, being among the first U.S. companies to adopt the Global Reporting Initiative's new comprehensive level of reporting further advanced UPS's commitment to integrating sustainability into its business decisions," said Rhonda Clark, UPS chief sustainability officer. "It's another way to hold our company to the highest standard of transparency and disclosure. This recognition by one of the world's most respected organizations evaluating environmental performance affirms the success of UPS's dedicated sustainability efforts."

CSAFE Global




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