CARBON
REPORTING
PERFORMANCE
OF THE FTSE 100
September 2015
2015 IS A PIVOTAL YEAR
FOR THE PLANET AND FOR
MANAGING THE DANGERS OF
ANTHROPOGENIC CLIMATE
CHANGE
2
CONTENTS
CARBON
REPORTING
PERFORMANCE
OF THE FTSE 100
Preface
4
Introduction
5
Methodology
6
Summary results
7
Top 20 performers with % score
8
Key findings
9
Path to best practice
10
Sector analysis
12
Five year comparison
16
Conclusion
18
Appendix - methodology detail
19
3
PREFACE
We have heard many times in the past 12 months,
from many different platforms and commentators,
that 2015 is a pivotal year for the planet and for
managing the dangers of anthropogenic climate
change. The United Nations 21st Conference of the
Parties negotiations in Paris in December aim to
establish an international agreement to mitigate rising
levels of greenhouse gases and limit the average
global temperature increase to 2 degrees Celsius
above pre-industrial levels. The negotiations will not
be easy – political agendas and vested interest will be
a major influencing factor on the cuts and reductions
that individual countries are willing to commit themselves.
What is clear is that an agreement must be reached.
There is also an appetite outside the political sphere
for change. During the past 12 months the Financial
Times, a media outlet focused on business, finance
and commerce has run a number of editorials on the
need to work towards a low carbon economy
coupled with front page features on the big
businesses, such as Ikea, helping to deliver this
transformation. This is a step change in attitudes and
thinking: climate change and the realities of the risks
it presents are rising up the agenda and usurping
traditional views and opinions.
The general public also recognise the risks that
climate change presents. The Spring 2015 Global
Attitudes survey by the Pew Research Centre
reported that international public perception on global
threats rates climate change as very concerning, with
46% of people on average naming it as the top
threat. This summer, in the world’s first climate
change liability suit, a Dutch court ordered the state
to reduce emissions by 25% within five years to
protect its citizens from climate change. Through the
Catholic Church’s Encyclical on Climate Change and
the Islamic Declaration on Climate Change, two of
the world’s major religions have stated their positions
and aim to spread awareness and understanding
among their followers.
4
Equally, businesses are making their own demands
for a strong approach to tackling climate change.
There have been a number of collaborative demands
by British businesses calling for policies to ensure the
UK economy is energy efficient and low carbon,
requesting the government set ambitious carbon
targets for the UK.
Change is happening in terms of attitudes and
approaches to manmade climate change. But the
risk remains high and it will be imperative that
governments, businesses and individuals all play a
role in ensuring that these risks are mitigated.
The fundamental aim of this research report is to
acknowledge and highlight those businesses walking
the talk and committing themselves to ambitious
carbon management strategies and targets,
identifying and managing the risks of climate change
and being best practice leaders in their sectors and
beyond. We hope it inspires others to follow on a
path to making their business model more
sustainable and lower carbon.
Mark Chadwick,
Chief Executive, Carbon Clear
CHANGE IS
HAPPENING IN TERMS
OF ATTITUDES AND
APPROACHES TO
MANMADE CLIMATE
CHANGE
INTRODUCTION
At Carbon Clear, we work with companies across many different
sectors to manage their full environmental impacts from carbon to
water to biodiversity. Our core expertise lies in helping businesses
to identify the risks and impacts of climate change on their business
and to maximise any opportunities. We encourage companies to
take a longer term view, to put in place robust and challenging
carbon reduction targets and a clearly defined strategy.
We believe that our ten years of experience in the carbon management sector means we are well placed to assess
the carbon reporting performance of the one hundred largest publicly listed companies in the UK.
As with the past four years of research, the findings are polarised. There are a handful of true game changers,
companies that go above and beyond in terms of carbon management and see the value, not only to their own
business but in a broader world view of the actions they are taking to manage their emissions.
Following the leaders is a large swathe of companies that report on carbon performance in various different ways
and have some kind of strategy to do this, make some greenhouse gas (GHG) reductions and engage with
stakeholders on carbon issues. It is encouraging that these companies are working on their carbon performance.
But what’s certain is that more needs to be done and sooner rather than later.
Finally, the research finds a number of companies that place no importance on publicly reporting their carbon
emissions and barely go beyond the minimum requirements placed on them by legislative policy. This is extremely
disappointing. Companies that are part of the FTSE 100 are large in terms of revenue, operations and employees,
and have an enormous power to influence. If FTSE 100 companies can’t lead the way in their carbon management
performance, how can we hope to meet the carbon targets we already have, and the ones that are to come? We
do not name and shame poor performers as part of this research, but we will inform the directors of the bottom
scoring fifty companies of their ranking and offer some suggestions for improvements. We believe some of the
biggest commercial gains of a carbon management strategy are realised at the beginning of the process, and that
there are many opportunities for these companies to add benefits to both their bottom line and the environment.
Business must play its role in limiting the dangers of climate change and we hope that this research report will
provide inspiration to those embarking on their carbon management journey.
5
METHODOLOGY
This is the fifth year that we have carried out research
into the carbon reporting performance of the FTSE
100. Each year, we aim to refine and rethink the
scoring criteria to reflect best practice in carbon
reporting and to incorporate findings from the previous
year. The criteria get continually tougher as we
recognise those companies that are truly pushing the
boundaries and remove ‘easy win’ points for activities
we believe all companies should be carrying out.
Our research was based solely upon publicly available
information readily accessible to an interested third
party. This is because we believe that in order for
companies to be transparent in managing their
carbon emissions it is important that any member of
the general public has access to this information and
that it is provided in an understandable format.
Companies were scored against criteria across four
broad subject areas, based upon information available
in 2014/15 corporate sustainability reports, annual
reports and any additional links from company
websites, including sustainability micro-sites. CDP1
disclosures were only considered if a company
directly linked to their CDP response documentation
on their website, meaning it is readily and easily
accessible to any person browsing the company’s
sustainability material. We made this decision because
we believe that a non-expert interested party would
not necessarily know about the existence of CDP or
indeed how best to access the required information.
There are three broad areas where we have stretched
the scoring this year:
1
Material Risks
For 2015 we have placed greater scrutiny on how
companies assess the material risks of climate change
to their business and supply chain, what strategies
they have in place for adapting to these risks and
their ability to identify any opportunities. This rewards
those companies that are actually acting on the risks
and opportunities they’ve identified and generating
tangible value through the process.
2
Scope 3 / Value Chain
The criteria for reporting Scope 3 emissions has
tightened, with particular focus on GHG Protocol
Category 3 2(fuel and energy related emissions) as we
believe this is a category that all companies should
be calculating and reporting to be completely
transparent in their disclosure of carbon emissions.
3
Year on Year Reductions
Last year, we found that companies with more
attainable or shorter-term targets were picking up
points easily, slightly skewing the data in their favour.
This year, therefore, the criteria was changed such that
year-on-year emissions reductions were taken into
account, as well as reductions in line with a target.
This stricter scoring criteria may explain why average
scores by sector are lower in all areas except for
measurement, reporting and verification (MRV) this
year than last year. The full methodological
breakdown can be found in the Appendix.
6
1www.cdp.net
2www.ghgprotocol.org
SUMMARY RESULTS
Summary Results of average score by section
MRV
WE AIM TO RECOGNISE
COMPANIES THAT ARE
TRULY PUSHING THE
BOUNDARIES AND
REMOVE ‘EASY WIN’
POINTS
100%
80%
60%
40%
20%
Engagement
0%
Carbon
Strategy
Carbon
Reduction
2014
2015
7
TOP 20 PERFORMERS
WITH % SCORE
2015
Ranking
Score
1
BT Group
94%
2
Marks & Spencer Group
93%
3
Sky
84%
=4
Kingfisher
82%
=4
Unilever
82%
=6
Aviva
79%
=6
Centrica
79%
8
Coca-Cola HBC
77%
9
TUI AG
76%
Reed Elsevier
73%
=11
Mondi
72%
=11
National Grid
72%
=13
British Land Company
69%
=13
Taylor Wimpey
69%
=15
Hammerson
66%
=15
Tesco
66%
=17
GlaxoSmithKline
65%
=17
Sainsbury
65%
=19
Johnson Matthey
63%
=19
Royal Mail
63%
=19
WPP
63%
10
8
Company
WE ARE COMMITTED TO
IDENTIFYING AND HIGHLIGHTING
BEST PRACTICE, SO THE SCORING
CRITERIA WILL CONTINUE TO BE
INCREASINGLY RIGOROUS AND
TESTING EACH YEAR WE CARRY
OUT THE RESEARCH
KEY FINDINGS
99 companies reported on carbon this year, the same number as 2014
56 companies have reported some form of Scope 3 data, 40 of
which provide Scope 3 beyond business travel
9 companies reported more than 5 Scope 3 categories according to
the GHG Protocol
74 companies set carbon reduction targets
1 company sets science based targets
55 companies have some form of materiality assessment or
assessment of future climate change risks to business
40 mention business resilience/adaptations to risk from climate change
38 purchased green electricity
74 of the 100 companies were listed on some form of sustainability
index, most frequently the FTSE4Good with the second most
common being the Dow Jones Sustainability Index (DJSI).
9
PATH TO BEST PRACTICE
Best practice leaders not only have an extensive carbon management plan in place, but they also work hard to keep this under review. We have found that these
companies continue to strategize and make plans beyond their stated targets. This in particular is what sets BT and Marks and Spencer Group apart from other leading
companies. Here we take a look at some of the areas where companies are pushing the boundaries of best practice.
Game changers for the second year in a row
BT has yet again demonstrated game changing
leadership credentials through a rigorous and far
reaching carbon management strategy that is
communicated both internally and externally. For this
reason the company has ranked first for the second
year in a row.
In terms of strategy, BT gained the top score in this
year’s research for their all-encompassing climate
change risk assessment. BT’s science based approach
to target setting helps them to determine the level of
GHG emission reduction necessary within the business’s
scope to combat climate change. The Climate
Stabilisation Intensity (CSI) methodology was developed
in house by BT and is used as a guideline for ambitious
carbon reduction targets. BT determined that emissions
must be reduced to 80% below their 1996/97 baseline,
a target that was met in 2014, ahead of their 2020
deadline. BT look like they are set to continue with a
robust emissions reduction plan. In addition, currently
BT is the only company in the FTSE 100 that has
disclosed that they have science based targets.
BT’s carbon management strategy, The Net Good
Programme, is extensive and detailed. The company
aims to help customers reduce carbon emissions by
at least three times the end to end carbon impact of
their business. BT have stated that they will do this
by helping customers reduce CO2 emissions through
products and services, from systems that manage
the energy use in buildings to video conferencing that
10
BT GAINED THE TOP
SCORE IN THIS YEAR’S
RESEARCH FOR THEIR
ALL-ENCOMPASSING CLIMATE
CHANGE RISK ASSESSMENT
helps reduce the need for air travel. For BT,
communication technology can be used to reduce
the pressure on resources and cut carbon emissions.
At the same time BT have stated they will continue to
reduce their own end to end carbon impact, managing
emissions from day to day business operations and
“all of the carbon emissions from our supply chain – our
suppliers , their suppliers , their suppliers’ suppliers…”3
BT’s numerous technological innovations and
behavioural changes really made an impact in this
year’s research. The Designing Our Tomorrow initiative
sees product life cycle assessments carried out at
the design stage to ensure energy and emissions
impacts are considered at the beginning of the project.
BT have once again proven themselves to be
committed to managing their carbon impacts and
reporting these transparently and rigorously. A
well-deserved top place for a best practice leader.
3http://www.btplc.com/Betterfuture/NetGood/OurNetGoodgoal/NetGoodInfographic/BT-NetGood-Infographic.pdf
4 http://planareport.marksandspencer.com/M&S_PlanAReport2015.pdf p.12
Making sustainability reporting concepts a reality
At Carbon Clear we often find that those organisations
that perform well in all areas of environmental impact
also have a strong commitment to their carbon
performance. This is because a robust and broad
materiality exercise has been undertaken with carbon
part of an overall, joined-up and efficient strategy.
Marks and Spencer Group continue to demonstrate
this as consistent high performers in our carbon
rankings alongside their wider sustainability strategy
- Plan A. The company has ambitions to bring the
principles of a circular economy into their business
strategy. A review of opportunities across food,
construction and operations, and clothing is currently
underway. The focus is on identifying and delivering
competitive advantage that results from the adoption
of circular economy principles. Marks and Spencer
Group strongly advocate that this is the best way for
business to drive positive environmental change and
they work closely with other businesses and organisations
aiming to accelerate the move to a circular economy.
Marks and Spencer Group describe their commitment
to actively support projects on natural capital accounting
as being “firmly on the table”. They realise the importance
of developing consistent definitions and methodologies
for natural capital accounting before it can be utilised
within financial functions. In line with this, they are
currently piloting a Natural Capital Accounting Protocol4
which is led by the Natural Capital Coalition. The results
of this study are expected to be published in mid-2016.
Approaches to internal carbon pricing
A number of FTSE 100 companies this year reported to the CDP that they are using an internal price on carbon,
signalling that the idea is gaining traction and we will continue to see an increase in its implementation. Yet only a
handful of these companies are also publicly disclosing their use of an internal carbon price according to our
research. This is likely to change in the future as awareness and advocacy of carbon pricing increases, through
industry organisations and potential government legislation. Both BT Group and Unilever have already aligned
with the UN Global Compact’s “Business Leadership Criteria on Carbon Pricing”, meaning they are committed to
creating an internal carbon price that is high enough to effect investment decisions.
There are a number of ways a company can benefit from setting their own carbon price:
• Reduce GHG emissions in a cost effective way, by providing an incentive and framework to prioritise and drive
carbon reduction activities across the entire business.
• Assist risk identification and management, aiding future decision making around a company’s capital allocation.
Introducing a shadow price for carbon can help an organisation assess the potential profitability of its
operations under various £/tonne of carbon scenarios. Should regulation be imposed in the future this would
leave them well placed to make the necessary changes to their business model.
• Empower employees and business units as part of an organisation-wide program, by ensuring each different
part of the business takes responsibility for the emissions they directly create.
Sustainability as a Key Performance Indicator
Engagement as a behavioural game changer
Taylor Wimpey, a new entrant to the FTSE 100 for
2015, is facilitating internal behavioural change by
embedding sustainability matters into compensation
structures. Last year, 5% of their senior management
bonus payments related to sustainability data quality,
with a specific focus on carbon emissions5.
A financial incentive to deliver on sustainability issues
gives rise to potentially huge changes within a
company, as sustainability filters down to become a
priority at all levels.
Kingfisher have made extensive efforts to engage
with both customers and staff on carbon issues.
They are developing installation and advisory services
for their energy-saving products, including insulation,
draught-proofing and low energy lighting and
appliances. They are also helping customers to
access government subsidies where available.
5 Sustainability Report 2014, p.9
Kingfisher are also taking measures to make it easier
for employees and customers to travel to their stores
using lower carbon transport options. Notably, they
provide shuttle bus services and electric vehicle
charging points, as well as subsidising public
transport costs for employees.
11
SECTOR ANALYSIS
Average sector scores will mask the companies
within a sector who are performing very well or very
badly. For instance, Kingfisher ranks in joint 4th and
will therefore boost the average score of its sector,
Retailer and Wholesale Distribution, considerably.
Links between sector size and performance are
therefore not totally robust, yet the patterns found do
highlight the importance of industry collaboration.
Companies with robust plans can provide guidance
and assistance to other businesses in their industry
to improve standards. Unilever provides an excellent
example, having waived its specific exclusivity rights
on MuCell® Technology, which reduces the density of
plastic packaging allowing less to be used. While
companies may worry that sharing knowledge and
strategy will put them at a competitive disadvantage,
collaboration within sectors on climate change issues
can bring benefits to all parties.
12
6 As defined by FTSE sector listings
90
8
80
7
70
6
60
5
50
4
40
3
30
2
20
1
10
0
0
Number of companies in sector
Re
tai
ler
Average % score
The graph above shows all FTSE 100 sectors that
have over three companies and their average scores
(sorted by reducing average scores).
COMPANIES WITH ROBUST PLANS CAN PROVIDE
GUIDANCE AND ASSISTANCE TO OTHER BUSINESSES
IN THEIR INDUSTRY TO IMPROVE STANDARDS
Average % score
9
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The size of each sector can to an extent be linked to
its ability to influence policymakers, and indeed other
companies and industries. For example, if all companies
in the Retail and Wholesale Distribution sector only
operated out of low carbon and energy efficient
buildings, demand and competition would in turn
pressure the Construction and Property Development
and Investment sectors to improve their environmental
performance. Similarly, if all companies in the Hospitality
sector were championing responsible suppliers, it is
likely we would see an improvement in the average
score of the Food, Beverages and Tobacco sector.
Number of companies
We have chosen to focus on three sectors that have
clear trends for carbon reporting and highlight the
issues and themes to add to the debate around how
these industries should be contributing to climate
change issues through their carbon management
performance and reporting.
FTSE 100 sectors that have over three companies and their average scores (sorted by reducing average scores).
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Examining specific sectors6, their material issues, and
the trends that arise from our research is a new
undertaking for 2015.
SECTOR ANALYSIS: MINING AND MINERALS
Total Score Comparison - Mining and Minerals
100
HOW ARE
EXTRACTIVES
LOOKING AT
DEVELOPING THEIR
BUSINESS MODELS
TO MANAGE THE
RISKS OF CLIMATE
CHANGE?
90
80
70
60
50
40
30
20
10
0
Company 1
Company 2
Company 3
Company 4
2015 Score
The extractives industries are by their very nature
hugely carbon intensive: the process of mining is
energy intensive and the finished products are often
fossil fuels and other finite natural resource products
or by-products. What are extractives doing to
address these issues? How are they looking at
developing their business models to manage the
risks of climate change?
Analysis of FTSE 100 responses to CDP shows that
the targets set by the most carbon intensive sectors
(responsible for the majority of FTSE 100 emissions)
are not sufficiently ambitious to deliver the reductions
required by the UK Climate Change Act (80%
reduction in GHG emissions from 1990 levels by
2050). Based on analysis of 2009 CDP responses,
it was found that the Mining and Minerals sector
is expected to meet their own reduction targets
but the annual rate of decreasing emissions is far
lower than needed.
Company 5
Company 6
Company 7
Sector Average
Our research backed up these findings, with four out
of seven companies meeting or exceeding their
reduction targets by realising relatively small carbon
reductions. In one case the reduction target was
exceeded, yet there has been an increase in absolute
emissions since 2013, confirming that targets are not
being reassessed and reset appropriately to encourage
further emissions reductions. Rather, achieving a
target is viewed as a one-off tick-box exercise.
Whilst clear that it is not only this sector’s
responsibility to set and meet challenging reduction
targets, they do have an essential role to play. Going
beyond current ‘business as usual’ activity and
reporting is vital if we are to meet the challenge of
mitigating climate change.
13
SECTOR ANALYSIS: IT AND TELECOMMUNICATIONS SECTOR
IT and Telecoms are an essential and integral part of
our digital world. The sector contributes to reducing
carbon emissions for other companies through the
products and services it sells and innovation it offers
such as video conferencing and data sharing
platforms. But there are also significant areas of high
impact within the sector: energy intensive data
centres and their associated equipment cooling,
complex telecommunications networks, devices and
products. How is the sector addressing these issues?
In the 2015 research we found that the IT and
Telecoms sector included two companies among the
top ten and two in the bottom ten. If some
companies in the sector are making commitments,
delivering change, and remaining competitive it
seems that carbon management is a viable business
strategy and that other companies within the sector
should consider its merits.
Total Score Comparison - IT and Telecoms
100
90
80
70
60
50
40
30
20
10
0
Company 1
Company 2
Company 3
Company 4
2015 Score
The majority of companies in this sector set reduction
targets. If we focus on the role that IT and Telecoms
plays in reducing the emissions of others, it’s not
surprising that two companies have targets to reduce
their customers’ emissions with an aim of making a
much larger impact than if they focussed solely on
their own emissions.
By 2020 BT aim to ensure that for every one tonne of
carbon they emit, their customers will have saved
three tonnes of carbon emissions. Vodafone wants to
enable customer carbon emissions reduction of twice
the amount of carbon the business generates
through its own activities, through better, more
efficient technology.
Four IT and Telecoms companies reported Scope 3
emissions with two reporting more than five categories
of Scope 3 to the GHG Protocol Corporate Value
Chain guidelines, something which was only undertaken
by nine other companies in the FTSE 100.
14
Of the seven companies in this sector, Sky is the only
one that is carbon neutral. An impressive feat which
is done by offsetting total gross CO2e from Scope 1,
2 and selected Scope 3 categories. Although BT does
not carbon offset, they have committed themselves
to being carbon positive by reducing their customer
emissions at a 3:1 ratio though BT’s Net Good initiative.
Company 5
Company 6
Company 7
Sector Average
THE MAJORITY OF
COMPANIES IN THE IT AND
TELECOMMUNICATIONS
SECTOR SET CARBON
REDUCTION TARGETS
SECTOR ANALYSIS: FINANCIAL INSTITUTIONS
The insurance sector by its very nature has a
business model focussed heavily on the management
of risk. It is surprising therefore that only 50% of
companies in the sector are communicating their
climate change risk assessments publically. Aviva can
be commended for their extensive assessment of the
risks and opportunities of climate change. The
importance they place on climate change risk should
encourage other businesses to take carbon
management seriously, as they see insurers preparing
for severe financial risks related to climate change.
Financial Institutions are under increased scrutiny
from stakeholders. As a driver and enabler of
economic development and growth, the sector is not
only being held accountable for its own direct
impacts but also the impacts of those they finance.
Financial Institutions currently invest vast amounts of
capital in fossil fuels, which they are being increasingly
asked to address by the media, NGOs, activists and
in some cases by investors. For example, the
100
90
80
70
60
50
40
30
20
10
Insurance
Asset management
Banking
Co
.2
0
Co
.1
9
Co
.1
8
Co
.1
7
Co
.1
6
Co
.1
5
Co
.1
4
Co
.1
3
Co
.1
2
Co
.1
1
Co
.1
0
Co
.9
Co
.8
Co
.7
Co
.6
Co
.5
Co
.4
Co
.3
Co
.2
0
Co
.1
Only two financial institutions have assessed the
future opportunities of climate change to their business.
These two companies can clearly see the benefits of
this analysis: they are coupling carbon reductions
with business growth. For example, HSBC defines
“Climate Business” as long-term commercial
opportunities that are arising from the transition to a
low carbon economy, such as issuing green bonds.
Their Climate Business continues to grow and they
are realising the benefits of assessing climate change
opportunities, in turn assisting the transition to a low
carbon economy.
Total Scores Comparison - Financial Institutions
Av
iva
Financial Institutions make up 21% of the FTSE 100
by number and include banks, asset managers,
insurance companies and financial services.
However, the overall performance of financial
institutions was disappointing. Only 60% of the
financial institutions are setting carbon reduction
targets with 30% acknowledging the risk of future
climate change to their business.
Financial services
Rockefeller Brothers Fund, controlled by descendants
of John D Rockefeller – the founder of what eventually
became ExxonMobil, has pledged to divest its fossil
fuel investments. This sends the message that the
Fund believes the future is not in fossil fuels and
wants to protect its investments. Our research shows
that only two financial institutions are considering the
environmental implications of their investment
decisions, and even in these cases the “consideration”
has yet to turn into any robust commitments. We
hope to see more FTSE 100 companies assessing
the carbon footprint of their investments.
Whilst financial institutions are making some efforts to
reduce their carbon emissions and act in a more
sustainable manner, the future of their business models
lie in planning for a low carbon future. Allocation of capital
toward lower carbon investments is ultimately where
they can have the most impact, and should therefore
be a central consideration to any Financial Institution.
15
FIVE YEAR COMPARISON
Number of companies meeting scoring criteria 2011 vs 2015
Assesment criteria
External Audit of carbon data
2015 is the fifth year that Carbon Clear has
undertaken the research into the carbon reporting
performance of the FTSE 100. In five years, we have
seen some interesting themes and trends in both the
companies that score highly and the work they are
undertaking to manage their emissions.
Reporting Scope 3
Reduction targets
0 1020304050607080
2015
2011
Number of companies meeting criteria
Number of companies meeting scoring criteria 2012 vs 2015
Assesment criteria
Purchase of green electricity
Assessment of Climate Change risks
Scope 3 beyond business travel
The top five scoring companies 2011 – 2015
evidence a consistent prioritisation of climate change
issues and repeated demonstration of best practice
in carbon reporting.
The cumulative performance scores across all five
years of the FTSE 100 research give the following
rankings:
1
Marks & Spencer Group
2
BT Group
3
Sky
4
Aviva
5
Kingfisher
0 1020304050607080
Number of companies meeting criteria
2015
16
2012
The top 20 places have been held by 36 different
companies over the 5-year period. Marks & Spencer
Group, BT Group, Sky, Aviva, Kingfisher, Sainsbury’s
and Reed Elsevier have held places in the top 20
every year. Marks & Spencer Group, Sky and Aviva
have consistently been ranked in the top 10, leading
the FTSE 100 in carbon reporting performance since
2011. All of these companies now have established
carbon reporting action plans focussed on social,
environmental and commercial benefits.
As the pressure for companies to take responsibility
for their impact on climate change increases, each
year our scoring criteria is amended to reflect what
we consider to be best practice. As a result, the
average performance scores of companies ranked in
the top 10 is 6% lower in 2015 compared to 2011.
In contrast, the average scores of companies ranked
in the bottom 10 is the same in 2015 and 2011,
showing that even the lowest scoring companies are
making some improvement. This is relative as there
are a number of ‘easy wins’ allowing low scoring
companies at the beginning of their carbon
management journey to improve their score.
Nevertheless, the ability of the bottom 10 performers
to retain their average score against tougher criteria
shows the positive impact legislation can have –
companies who were in 2011 taking little or no action
have had to comply with mandatory GHG reporting
in their annual report and accounts.
The general changes that are evident between 2011
and 2015 are both positive and encouraging. 56
companies now report Scope 3 emission data, a
30% increase since 2011. Of these 56 companies,
40 are providing Scope 3 data beyond business
travel, compared to only 27 in 2012. Yet only nine
companies are providing more than five GHG
Protocol categories of Scope 3 data. This is an area
where companies could improve. It is likely that more
companies use the GHG Protocol categories for
Scope 3 emissions, but that they are not making this
apparent in their reporting. And our question would
therefore be; why not? In order to gain a holistic and
robust picture of a company’s true footprint it is
necessary to consider as many categories of Scope
3 as are feasible.
69 companies now have their carbon data externally
audited, a 33% increase since 2011. An external
audit of carbon emissions ensures transparency and
confirms that targets are being set on robust and
reliable sets of data. Reduction targets are now being
set by 73 companies, an improvement from 64
companies in 2012. It is hoped that this figure will
continue to increase, and it will be interesting to note
any changes resulting from the increased traction of
science-based targets. Currently BT Group is the
only FTSE 100 company to disclose that it has set
science-based targets.
55 companies have assessed the risks of future
climate change to their business, a 20% increase
since 2012. Again, this is a figure which is hoped to
increase as understanding of climate science and the
potentially significant impacts of climate change
becomes more widespread. Since 2011 FTSE 100
companies have continued to invest in low-carbon
technologies. 38 companies are now purchasing
some green electricity, a 34% increase since 2012.
We are committed to identifying and highlighting best
practice, so the scoring criteria will continue to be
increasingly rigorous and testing each year we carry
out the research.
IN FIVE YEARS OF
RESEARCH WE
HAVE SEEN SOME
INTERESTING
THEMES AND
TRENDS IN BOTH THE
COMPANIES THAT
SCORE HIGHLY AND
THE WORK THEY
ARE UNDERTAKING
TO MANAGE THEIR
EMISSIONS
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CONCLUSION
This year’s research has found some
excellent efforts from a handful of
FTSE 100 companies. Yet, once
again, we find that too many
companies are lagging behind,
showing little consideration of both
the impacts of their business on
climate change, and the impact of
climate change on their business.
Whilst this is problematic for the future of our planet, it cannot be
stressed enough that this is soon to be, if it isn’t already,
problematic for companies themselves. We believe that there is
long-term benefit from effectively reporting and managing
carbon emissions. Companies should now be taking their
reporting to the next level, undertaking detailed assessments of,
and developing mitigation plans for, the risks of climate change
to their business. This approach increases the security of a
business against uncertain future scenarios, with changes likely
to be seen in competition for natural resources, tighter regulations
and legislation preventing business as usual, as well as the
effects of an increasing abundance of environmentallyconscious consumers.
Throughout this report we highlight activities that we consider
to be best practice, in the hope that other companies are
encouraged to follow suit. Often these initiatives are the result
of a technically sound, long-term strategy. It is important to
understand that the road to securing your business against future
climate change often begins by taking very simple measures,
and indeed these first steps often see the quickest returns.
Finally, we congratulate our winner BT for their excellent
leadership, and hope that other businesses find their example
to be inspirational.
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IT IS IMPORTANT
TO UNDERSTAND
THAT THE ROAD TO
SECURING YOUR
BUSINESS AGAINST
FUTURE CLIMATE
CHANGE OFTEN
BEGINS BY TAKING
VERY SIMPLE
MEASURES
APPENDIX
Each company was judged against 64 criteria across each of the
following areas, using only information that is publicly available and
readily accessible to an interested third party:
Measurement, reporting and verification focused on the rigour of a company’s basic carbon
reporting, including the disclosure of carbon footprint data and its calculation methodology. Carbon
Clear also looked at: compliance with recognised standards (such as the GHG Protocol, ISO 14064);
inclusion of multi category Scope 3 emissions in measurement and reporting, and; external auditing of
carbon footprint data. Companies were also ranked depending on how many years they have provided
carbon data and if this is disclosed in a timely manner to be useful to stakeholders.
Strategy considered whether companies’ have set carbon reduction targets and have a reduction plan
in place; if there is evidence of a person or team responsible for carbon management; if there has been
an assessment of the future climate change risks and opportunities; if resilience and adaptation of their
supply chain to climate change risks has been acknowledged, and; if the company considers
investment decisions regarding fossil fuels.
Carbon reduction performance and targets relates to whether the company provides analysis against
historical data and if either absolute or relative carbon reductions have been demonstrated. Inclusion of
both absolute and relative reductions ensures companies are not penalised for growth. In addition to
historic reductions, progress towards targets and plans to achieve them are also scored. This section
also looked at companies’ energy efficiency, staff behavioural change initiatives, and type of energy
consumption or generation. The research also examined whether companies develop low-carbon
products and if companies buy carbon offsets.
Engagement with stakeholders is key to both achieving carbon reductions and to gaining commercial
benefits from a low-carbon approach. Stakeholders include consumers, the supply chain, investors,
government and the wider community. This section scores companies on their efforts to connect with
each of these stakeholder groups to collectively deal with sustainability issues. The extent of internal
and external engagement is considered, for example if a company is successfully influencing
stakeholder behaviour, rather than simply providing them with information. Any external recognition
through the achievement of credible certificates and awards is given credit.
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