Ethical Investments Impact Corporate Performance

As a ramp up to the United Nations Climate Change Conference in Copenhagen later this year, EIRIS, an independent research provider into the social, environmental governance and ethical performance of companies, recently issued a report that examined the connection between performance management and low-carbon activities.

The report entitled, “Climate Change Compass: The Road to Copenhagen,” analyzed the 300 largest global companies listed on the FTSE All World Index against 2008 benchmarks. The findings point to some positive trends when it comes to putting climate change policies in place for investors.

Carlota Garcia-Manas, assistant head of research at EIRIS and the author of the report said that “the majority of companies in the group now have some kind of climate change policies, many of which contain emissions reduction targets."

Key findings include:

• 33% of companies have unmitigated climate change risk (34% in 2008)
  
• 55% have short-term targets on climate change (48% in 2008)
  
• Of those with “high or very high” impact, 91% disclose GHG emissions data (78% in 2008)
  

• 91% of high and very high impact companies disclose absolute CO2 or GHG emissions data (73% in 2008)

The report stated that climate change has the potential to seriously impact shareholder value, especially in the medium to long term. But it also warned that investors need to understand the risks to their investments and also the role they should play in the wider policy debate.

While it is clear that some leading companies are moving voluntarily, do you think companies will take heed and move more quickly to tackle carbon without a regulatory framework?

(Photo courtesy of San Diego Loves Green)