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Carbon Disclosure Project Report 2010 Canada 200 On behalf of 534 investors across the globe with assets of $64 trillion Report written by: The Conference Board of Canada Graham Campbell +1 613 526 3090 ext. 250 campbellg@conferenceboard.ca Carbon Disclosure Project www.cdproject.net +44 (0) 207 970 5660 info@cdproject.net Contents CDP Members and CDP Signatory Investors—2010................................... 2 Message From the Honourable Jim Prentice......................................... 6 Letter From Paul Dickinson, President and CEO, Carbon Disclosure Project.................... 7 Message From the CEOs Representing the Sponsors of the 2010 Carbon Disclosure Project........... 8 Executive Summary............................ 10 1.Highlights of Carbon Disclosure in 2010.......................................... 13 2.Canada’s Carbon Disclosure Leaders and Case Studies of Best Practices............................... 25 3.Benchmarking Canada’s Disclosure Results......................... 31 4.Climate Change Disclosure Can Do More—And Mean More..... 35 5. Closing Observations..................... 38 Appendix A—Other 2010 Disclosure Results......... 40 Appendix B—The 2010 Carbon Disclosure Scores......... 42 Appendix C—Response Data............. 43 Acknowledgements............................ 52 About The Conference Board of Canada.......................................... 52 Carbon Disclosure Project 2010 Carbon Disclosure Project 2010 This report and all of the public responses from corporations are available to download free of charge from www.cdproject.net. (Canadian Members and Canadian Signatory Investors are shown in bold font) 2 CDP Members 2010 ABRAPP - Associação Brasileira das Entidades Fechadas de Previdência Complementar Aegon N.V. Akbank T.A.S. Allianz Global Investors AG ATP Group Aviva Investors AXA Group Banco Santander (Brasil) Bank of America Merrill Lynch BBVA BlackRock BP Investment Management Limited California Public Employees’ Retirement System California State Teachers’ Retirement System Calvert Group Catholic Super CCLA Investment Management Ltd Co-operative Asset Management Essex Investment Management, LLC Ethos Foundation Generation Investment Management HSBC Holdings plc ING KLP Insurance Legg Mason, Inc. The London Pensions Fund Authority Mergence Africa Investments (Pty) Limited Mitsubishi UFJ Financial Group (MUFG) Morgan Stanley National Australia Bank Limited Neuberger Berman Newton Investment Management Limited Nordea Investment Management Northwest and Ethical Investments LP PFA Pension Pictet Asset Management SA RBS Group Robeco Rockefeller & Co. SRI Group Russell Investments Schroders Second Swedish National Pension Fund (AP2) Sompo Japan Insurance Inc. Standard Chartered PLC Sun Life Financial Inc. TD Asset Management Inc. TDAM USA Inc. The Wellcome Trust Zurich Cantonal Bank The Conference Board of Canada CDP Signatories 2010 CDP Signatory Investors 2010 534 financial institutions with assets of over $64 trillion were signatories to the CDP 2010 information request dated February 1, 2010, including: Aberdeen Asset Managers Aberdeen Immobilien KAG Active Earth Investment Management Acuity Investment Management Addenda Capital Inc. Advanced Investment Partners Advantage Asset Managers (Pty) Ltd AEGON Magyarország Befektetési Alapkezelo Zrt Aegon N.V. AEGON-INDUSTRIAL Fund Management Co., Ltd Aeneas Capital Advisors AGF Management Limited AIG Asset Management Akbank T.A.S. Alberta Investment Management Corporation (AIMCo) Alberta Teachers Retirement Fund Alcyone Finance Allianz Global Investors AG Allianz Group Altshuler Shaham AMP Capital Investors AmpegaGerling Investment GmbH Amundi Asset Management ANBIMA – Brazilian Financial and Capital Markets Association APG Asset Management Aprionis ARIA (Australian Reward Investment Alliance) Arma Portföy Yönetimi A.S. ASB Community Trust ASM Administradora de Recursos S.A. ASN Bank Assicurazioni Generali Spa ATP Group Australia and New Zealand Banking Group Limited Australian Central Credit Union incorporating Savings & Loans Credit Union Australian Ethical Investment Limited AustralianSuper AVANA Invest GmbH Aviva Investors Aviva plc AvivaSA Emeklilik ve Hayat A.S. AXA Group Baillie Gifford & Co. Bakers Investment Group Banco Bradesco S.A. Banco de Credito del Peru BCP Banco de Galicia y Buenos Aires S.A. Banco do Brasil Banco Santander Banco Santander (Brasil) Banesprev Fundo Banespa de Seguridade Social Banesto (Banco Español de Crédito S.A.) Bank of America Merrill Lynch Bank Sarasin & Co, Ltd Bank Vontobel Bankhaus Schelhammer & Schattera Kapitalanlagegesellschaft m.b.H. BANKINTER S.A. BankInvest Banque Degroof Barclays Group BBC Pension Trust Ltd BBVA Bedfordshire Pension Fund Beutel Goodman and Co. Ltd BioFinance Administração de Recursos de Terceiros Ltda BlackRock Blue Marble Capital Management Limited Blue Shield of California Group Blumenthal Foundation BMO Financial Group BNP Paribas Investment Partners BNY Mellon Boston Common Asset Management, LLC BP Investment Management Limited Brasilprev Seguros e Previdência S/A. British Columbia Investment Management Corporation (bcIMC) BT Investment Management The Bullitt Foundation Busan Bank CAAT Pension Plan Cadiz Holdings Limited Caisse de dépôt et placement du Québec Caisse des Dépôts Caixa de Previdência dos Funcionários do Banco do Nordeste do Brasil (CAPEF) Caixa Econômica Federal Caixa Geral de Depósitos Caja de Ahorros de Valencia, Castellón y Valencia, BANCAJA Caja Navarra California Public Employees’ Retirement System California State Teachers’ Retirement System California State Treasurer Calvert Group Canada Pension Plan Investment Board Canadian Friends Service Committee (Quakers) CAPESESP Capital Innovations, LLC CARE Super Pty Ltd Carlson Investment Management Carmignac Gestion Catherine Donnelly Foundation Catholic Super Cbus Superannuation Fund CCLA Investment Management Ltd Celeste Funds Management Limited The Central Church Fund of Finland Central Finance Board of the Methodist Church Ceres, Inc. Cheyne Capital Management (UK) LLP Christian Super Christopher Reynolds Foundation CI Mutual Funds’ Signature Advisors CIBC Clean Yield Group, Inc. ClearBridge Advisors Climate Change Capital Group Ltd Close Brothers Group plc The Collins Foundation Colonial First State Global Asset Management Comite syndical national de retraite Bâtirente Commerzbank AG CommInsure Companhia de Seguros Aliança do Brasil Compton Foundation, Inc. Connecticut Retirement Plans and Trust Funds Co-operative Asset Management Co-operative Financial Services (CFS) The Co-operators Group Ltd Corston-Smith Asset Management Sdn. Bhd. Crédit Agricole S.A. Credit Suisse Daegu Bank Daiwa Securities Group Inc. The Daly Foundation de Pury Pictet Turrettini & Cie S.A. DekaBank Deutsche Girozentrale Deutsche Asset Management Deutsche Bank AG Deutsche Postbank Vermögensmanagement S.A., Luxemburg Development Bank of Japan Inc. Development Bank of the Philippines (DBP) Dexia Asset Management DnB NOR ASA Domini Social Investments LLC Dongbu Insurance Co., Ltd. DWS Investment GmbH Earth Capital Partners LLP East Sussex Pension Fund Ecclesiastical Investment Management Economus Instituto de Seguridade Social The Edward W. Hazen Foundation EEA Group Ltd Element Investment Managers ELETRA - Fundação Celg de Seguros e Previdência Environment Agency Active Pension fund Epworth Investment Management Ltd Equilibrium Capital Group Erste Group Bank AG Essex Investment Management, LLC Ethos Foundation Eureko B.V. Eurizon Capital SGR Evangelical Lutheran Church in Canada Pension Plan for Clergy and Lay Workers Evli Bank Plc F&C Management Ltd FAELCE – Fundacao Coelce de Seguridade Social FASERN Fundação Cosern de Previdência Complementar Fédéris Gestion d’Actifs FIDURA Capital Consult GmbH FIM Asset Management Ltd Financière de Champlain FIRA. - Banco de Mexico First Affirmative Financial Network First Swedish National Pension Fund (AP1) 3 Carbon Disclosure Project 2010 FirstRand Ltd. Five Oceans Asset Management Florida State Board of Administration (SBA) Folketrygdfondet Folksam Fondaction CSN Fondation de Luxembourg Fonds de Réserve pour les Retraites – FRR Forward Management, LLC Fourth Swedish National Pension Fund, (AP4) Frankfurter Service Kapitalanlage-Gesellschaft mbH FRANKFURT-TRUST Investment Gesellschaft mbH Friends Provident Holdings (UK) Limited Front Street Capital Fukoku Capital Management, Inc. Fundação AMPLA de Seguridade Social - Brasiletros Fundação Atlântico de Seguridade Social Fundação Banrisul de Seguridade Social Fundação Codesc de Seguridade Social - FUSESC Fundação de Assistência e Previdência Social do BNDES - FAPES Fundação Forluminas de Seguridade Social Fundação Itaúsa Industrial Fundação Promon de Previdência Social Fundação São Francisco de Seguridade Social Fundação Vale do Rio Doce de Seguridade Social VALIA FUNDIÁGUA - Fundação de Previdência da Companhia de Saneamento e Ambiental do Distrito Federal Futuregrowth Asset Management Gartmore Investment Management Limited Generali Deutschland Holding AG Generation Investment Management Genus Capital Management Gjensidige Forsikring GLG Partners LP GLS Gemeinschaftsbank eG, Germany Goldman Sachs & Co. GOOD GROWTH INSTITUT für globale Vermögensentwicklung mbH Governance for Owners LLP Government Employees Pension Fund (“GEPF”), Republic of South Africa Green Cay Asset Management Green Century Funds Groupe Investissement Responsable Inc. GROUPE OFI AM Grupo Banco Popular Gruppo Monte Paschi Guardian Ethical Management Inc Guardians of New Zealand Superannuation Guosen Securities Co., LTD. Hang Seng Bank HANSAINVEST Hanseatische Investment GmbH Harbourmaster Capital Harrington Investments, Inc The Hartford Financial Services Group, Inc. Hastings Funds Management Limited Hazel Capital LLP HDFC Bank Ltd Health Super Fund Henderson Global Investors Hermes Fund Managers 4 HESTA Super Hospitals of Ontario Pension Plan (HOOPP) HSBC Global Asset Management (Deutschland) GmbH HSBC Holdings plc HSBC INKA Internationale Kapitalanlagegesellschaft mbH Hyundai Marine & Fire Insurance IDBI Bank Limited Illinois State Treasurer Ilmarinen Mutual Pension Insurance Company Impax Asset Management Ltd Industrial Bank Industrial Bank of Korea Industry Funds Management Infrastructure Development Finance Company Ltd. (IDFC) ING Insight Investment Management (Global) Ltd Instituto de Seguridade Social dos Correios e Telégrafos – Postalis Instituto Infraero de Seguridade Social - INFRAPREV Insurance Australia Group Investec Asset Management Irish Life Investment Managers Itaú Unibanco Banco Múltiplo S.A. J.P. Morgan Asset Management Janus Capital Group Inc. The Japan Research Institute, Limited Jarislowsky Fraser Limited The Joseph Rowntree Charitable Trust Jubitz Family Foundation Jupiter Asset Management K&H Investment Fund Management / K&H Befektetési Alapkezelo Zrt KB Asset Management KB Financial Group KB Kookmin Bank KBC Asset Management NV KCPS and Company KDB Asset Management Co., Ltd. Kennedy Associates Real Estate Counsel, LP KEPLER-FONDS Kapitalanlagegesellschaft m. b. H. KfW Bankengruppe KLP Insurance Korea Investment & Trust Management Korea Technology Finance Corporation KPA Pension Kyobo AXA Investment Managers La Banque Postale Asset Management La Financiere Responsable Landsorganisationen i Sverige LBBW - Landesbank Baden-Württemberg LBBW Asset Management Investmentgesellschaft mbH LD Lønmodtagernes Dyrtidsfond Legal & General Group plc Legg Mason, Inc. Lend Lease Investment Management Light Green Advisors, LLC Living Planet Fund Management Company S.A. Local Authority Pension Fund Forum The Local Government Pensions Institution Local Government Super Lombard Odier Darier Hentsch & Cie The London Pensions Fund Authority Lothian Pension Fund Macif Gestion Macquarie Group Limited Magnolia Charitable Trust Maine State Treasurer Man Group plc Maple-Brown Abbott Limited Marc J. Lane Investment Management, Inc. Maryland State Treasurer Matrix Asset Management McLean Budden MEAG Munich Ergo Asset Management GmbH Meeschaert Gestion Privée Meiji Yasuda Life Insurance Company Merck Family Fund Mergence Africa Investments (Pty) Limited Meritas Mutual Funds MetallRente GmbH Metzler Investment Gmbh MFS Investment Management Midas International Asset Management Miller/Howard Investments Mirae Asset Global Investments Co. Ltd. Mistra, The Swedish Foundation for Strategic Environmental Research Mitsubishi UFJ Financial Group (MUFG) Mitsui Sumitomo Insurance Co.,Ltd Mizuho Financial Group, Inc. Mn Services Monega Kapitalanlagegesellschaft mbH Morgan Stanley Motor Trades Association of Australia Superannuation Fund Pty Ltd Mutual Insurance Company Pension-Fennia Natcan Investment Management The Nathan Cummings Foundation National Australia Bank Limited National Bank of Canada National Bank of Kuwait National Grid Electricity Group of the Electricity Supply Pension Scheme National Grid UK Pension Scheme National Pensions Reserve Fund of Ireland National Union of Public and General Employees (NUPGE) Natixis Nedbank Limited Needmor Fund Nelson Capital Management, LLC Nest Sammelstiftung Neuberger Berman New Amsterdam Partners LLC New Jersey Division of Investment New Mexico State Treasurer New York City Employees Retirement System New York City Teachers Retirement System New York State Common Retirement Fund (NYSCRF) Newton Investment Management Limited NFU Mutual Insurance Society NGS Super NH-CA Asset Management Nikko Asset Management Co., Ltd. The Conference Board of Canada CDP Signatories 2010 Nissay Asset Management Corporation Nord/LB Asset Management Holding GmbH Nordea Investment Management Norfolk Pension Fund Norges Bank Investment Management (NBIM) Norinchukin Zenkyouren Asset Management Co., Ltd North Carolina State Treasurer Northern Ireland Local Government Officers’ Superannuation Committee (NILGOSC) Northern Trust Northwest and Ethical Investments LP Oddo & Cie Old Mutual plc OMERS Administration Corporation Ontario Teachers’ Pension Plan OP Fund Management Company Ltd Oppenheim Fonds Trust GmbH Opplysningsvesenets fond (The Norwegian Church Endowment) OPSEU Pension Trust Oregon State Treasurer Orion Asset Management LLC OTP Fund Management Plc. Pax World Funds Pensioenfonds Vervoer Pension Fund for Danish Lawyers and Economists The Pension Plan For Employees of the Public Service Alliance of Canada Pension Protection Fund Pensionsmyndigheten PETROS - The Fundação Petrobras de Seguridade Social PFA Pension PGGM Phillips, Hager & North Investment Management Ltd. PhiTrust Active Investors Pictet Asset Management SA The Pinch Group Pioneer Alapkezelo Zrt. PKA Pluris Sustainable Investments SA Pohjola Asset Management Ltd Portfolio 21 Investments Portfolio Partners Porto Seguro S.A. PRECE Previdência Complementar The Presbyterian Church in Canada PREVI Caixa de Previdência dos Funcionários do Banco do Brasil PREVIG Sociedade de Previdência Complementar Principle Capital Partners Psagot Investment House Ltd PSP Investments Q Capital Partners Co. Ltd QBE Insurance Group Limited Rabobank Raiffeisen Schweiz Railpen Investments Rathbones / Rathbone Greenbank Investments RBS Group Real Grandeza Fundação de Previdência e Assistência Social Rei Super Resona Bank, Limited Reynders McVeigh Capital Management Rhode Island General Treasurer RLAM Robeco Robert Brooke Zevin Associates, Inc Rockefeller & Co. SRI Group Rose Foundation for Communities and the Environment Royal Bank of Canada RREEF Investment GmbH The Russell Family Foundation Russell Investments SAM Group Sampension KP Livsforsikring A/S Samsung Fire & Marine Insurance Samsung Life Insurance Sanlam Investment Management Santa Fé Portfolios Ltda Sauren Finanzdienstleistungen GmbH & Co. KG Schroders Scotiabank Scottish Widows Investment Partnership SEB SEB Asset Management AG Second Swedish National Pension Fund (AP2) Seligson & Co Fund Management Plc Sentinel Investments SERPROS Fundo Multipatrocinado Service Employees International Union Benefit Funds Seventh Swedish National Pension Fund (AP7) The Shiga Bank, Ltd. Shinhan Bank Shinhan BNP Paribas Investment Trust Management Co., Ltd Shinkin Asset Management Co., Ltd Siemens Kapitalanlagegesellschaft mbH Signet Capital Management Ltd SIRA Asset Management SMBC Friend Securities Co., LTD Smith Pierce, LLC SNS Asset Management Social(k) Sociedade Ibgeana de Assistência e Seguridade (SIAS) Solaris Investment Management Limited Sompo Japan Insurance Inc. Sopher Investment Management SPF Beheer bv Sprucegrove Investment Management Ltd Standard Bank Group Standard Chartered PLC Standard Life Investments State Street Corporation Storebrand ASA Strathclyde Pension Fund Stratus Group Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Card Company, Limited Sumitomo Mitsui Finance & Leasing Co., Ltd Sumitomo Mitsui Financial Group Sumitomo Trust & Banking Sun Life Financial Inc. Superfund Asset Management GmbH Sustainable Capital Svenska Kyrkan, Church of Sweden Swedbank Ab (publ) Swiss Reinsurance Company Swisscanto Holding AG Syntrus Achmea Asset Management TD Asset Management Inc. TDAM USA Inc. Teachers Insurance and Annuity Association – College Retirement Equities Fund (TIAA-CREF) Tempis Capital Management Co., Ltd. Terra Forvaltning AS TfL Pension Fund The University of Edinburgh Endowment Fund Third Swedish National Pension Fund (AP3) Threadneedle Asset Management Tokio Marine & Nichido Fire Insurance Co., Ltd. Toronto Atmospheric Fund The Travelers Companies, Inc. Trillium Asset Management Corporation TRIODOS BANK TrygVesta UBS AG Unibanco Asset Management UniCredit Group Union Asset Management Holding AG Unipension UNISON staff pension scheme UniSuper Unitarian Universalist Association The United Church of Canada - General Council United Methodist Church General Board of Pension and Health Benefits United Nations Foundation Universities Superannuation Scheme (USS) Vancity Group of Companies Veritas Investment Trust GmbH Vermont State Treasurer VicSuper Pty Ltd Victorian Funds Management Corporation VietNam Holding Ltd. Visão Prev Sociedade de Previdencia Complementar Waikato Community Trust Inc Walden Asset Management, a division of Boston Trust and Investment Management Company WARBURG - HENDERSON Kapitalanlagegesellschaft für Immobilien mbH WARBURG INVEST KAPITALANLAGEGESELLSCHAFT MBH The Wellcome Trust Wells Fargo West Yorkshire Pension Fund WestLB Mellon Asset Management Kapitalanlagegesellschaft mbH (WMAM) The Westpac Group Winslow Management Company Woori Bank YES BANK Limited York University Pension Fund Youville Provident Fund Inc. Zegora Investment Management Zurich Cantonal Bank 5 Carbon Disclosure Project 2010 Message From the Honourable Jim Prentice Minister of the Environment, Government of Canada Climate change is not only one of the most important environmental issues of our time; it is also an economic issue that requires action on the part of all governments, citizens, and businesses. Climate change presents both risks and opportunities for business, and companies that voluntarily provide corporate environmental data are taking a proactive approach to managing these business risks and opportunities. Their participation in the Carbon Disclosure Project demonstrates a commitment to transparency and accountability, which is fundamental to good governance. The Government of Canada supports an approach to climate change that achieves real environmental and economic benefits for all Canadians, including through harmonization of its climate and energy policies with the United States. We are committed to tackling climate change through sustained action to build a lowcarbon economy that includes reaching a global agreement, working with our North American partners, and taking action domestically. Corporate environmental data represent a valuable resource to inform the development of our climate change policy. The Government of Canada is pleased to support the Carbon Disclosure Project Report 2010 as an important contribution to the betterment of our economy and environment. We applaud those businesses that volunteered their GHG emissions data, and encourage the private sector to be transparent in its efforts to fight climate change. The Honourable Jim Prentice, P.C., Q.C., M.P. Minister of the Environment CEO Foreword Paul Dickinson, CEO, Carbon Disclosure Project This year began with the clouds of global recession hanging over the economy. It was also tainted with heavy disappointment at the failure to reach agreement on a global deal at Copenhagen and smears against climate change science. Many asked us whether this would decrease corporate engagement in climate change. Would companies abandon commitments to carbon reporting and management to focus instead on shorter-term wins? Would companies throw out their carbon reduction plans due to the lack of a global framework? The answers to these questions lie in CDP’s global 2010 dataset and I am delighted to say that the answer is a categorical “no.” Fuelled by opportunities to reduce energy costs, secure energy supply, protect the business from climate change risk and damaged reputation, generate revenue, and remain competitive, carbon management continues to rise as a strategic priority for many businesses. Companies globally are seizing commercial carbon opportunities, often acting ahead of any policy requirements. More companies than ever before are reporting through CDP and measuring and reporting their emissions. In Canada, the 2010 CDP results continue to illustrate the engagement of the largest companies as shown by their climate change strategies, high-level governance arrangements, emissions accounting practices, and mitigation and 6 The Conference Board of Canada adaptation initiatives. Several of Canada’s jurisdictions are taking action on climate change policies at the sub-national level, for example, Alberta’s GHG emissions regulation, development of a North American cap and trade regime by four provinces, and implementation of a carbon tax regime in two Canadian provinces. The demand for primary corporate climate change data is growing too—it is now accessed through Bloomberg and Google Finance. It is also used by an increasing number of investment research providers and sell-side brokers to generate new insights into the impacts of climate change on global industry and to highlight the associated opportunities. We have also launched two index products based on CDP data—the FTSE CDP Carbon Strategy Index1 series and the Markit Carbon Disclosure Leadership Index.2 These products give investors exposure to companies better positioned in the transition to a low-carbon economy. CDP has set three key focus areas for the immediate future. One is to work with companies and the users of our data to continue improving quality and comparability. Data that support action are central to fulfilling CDP’s mission, to accelerate solutions to climate change by putting relevant information at the heart of business, policy, and investment decisions. As part of this process, we are launching a new package, Reporter Services, exclusively for responding companies, to help them develop their carbon management strategies through increased data quality, deeper analysis, and the sharing of best practice. Never forget that climate change is a global problem and we need a global solution. That is why our second key focus is on globalizing CDP’s programs in all major economies in the coming years. Beyond CDP’s Investor program, which sits at the heart of CDP, we intend to grow our Supply Chain and Public Procurement programs, as well as CDP Water Disclosure, to ensure that we maximize the fulfillment of CDP’s mission. Our third key focus is mitigation and emissions reduction. The number of companies within the Global 500 (FTSE Global Equity Series) reporting reduction targets has already increased fourfold since CDP’s first reporting year. But this is just the first step. We know that we can do far more to help advance emissions reductions and are fully committed to working with investors and industry to achieve this. It is through partnerships that we can achieve the largest impact. We’re delighted to be working in Canada with our partner, The Conference Board of Canada, as well as our global advisors to accelerate our mission and highlight the huge opportunities for business to capitalize on the transition to a low-carbon economy. These are exciting times for business, with significant changes coming to the way we produce and consume energy. New power from low or zero emissions sources is an urgent priority for climate change policy that simultaneously helps deliver energy security. New technologies such as smart grids, electric vehicles, alternative fuel sources, and advanced videoconferencing are showing a clear case for business growth with reduced emissions. The opportunities for business are enormous—it is through the intelligent investment of capital into the right solutions, identified by the business community, that we will achieve the low-carbon future we need. Paul Dickinson CEO, Carbon Disclosure Project 1 http://www.ftse.com/Indices/FTSE_CDP_Carbon_Strategy_Index_Series/index.jsp. 2 http://www.markit.com/en/products/data/indices/co-branded-equity-indices/carbon-disclosure-leadership-eu.page. 7 Carbon Disclosure Project 2010 Message From the CEOs Representing the Sponsors of the 2010 Carbon Disclosure Project The sponsors of the 2010 CDP Canada 200 Report endorse the role played by the annual Carbon Disclosure Project in defining and disseminating information for investors, business, and regulators regarding corporate actions to address climate change. The CDP provides a standardized reporting framework for corporate disclosure of carbon emissions and management strategies that helps guide investment decisions, advance business practices and services, and inform climate policy dialogue. Investors are the primary drivers of the CDP. Their engagement sends a strong message to companies about the financial materiality of climate change risks and opportunities. Investment organizations like the British Columbia Investment Management Corporation, Caisse de dépôt et placement du Quebec, Canada Pension Plan Investment Board, Northwest and Ethical Investments, Scotiabank, and TD Asset Management Inc. look for proactive strategic management of a company’s carbon footprint as an increasingly important factor in making their capital allocation decisions. As seen throughout this report, many Canadian companies are making clear disclosures about carbon emissions and actions in their responses to the CDP. In addition, firms like BMO Financial Group, Enbridge Inc., and TMX Group, Inc. take a forward-looking, strategic approach to climate change and find each year’s CDP results useful for benchmarking their performance against peers. Leading business service providers like the CSA Group, Deloitte, and NATIONAL Public Relations find that the CDP results give insights into what corporate advice and services are needed in order to manage climate change and position their businesses strategically. The CDP sponsors greatly appreciate the commitment shown by the Canadian companies that have responded to the 2010 information request. These companies are demonstrating leadership by making transparent their corporate governance, strategies and actions, performance on carbon emissions reduction, and risk management practices. 8 The Conference Board of Canada 2010 CDP Sponsors BMO Financial Group William Downe President and Chief Executive Officer Enbridge Inc. Pat Daniel President and Chief Executive Officer British Columbia Investment Management Corporation Doug Pierce Chief Investment Officer and Chief Executive Officer NATIONAL Public Relations Luc Beauregard Executive Chairman Caisse de dépôt et placement du Québec Michael Sabia Président and chef de la direction Canada Pension Plan Investment Board David F. Denison President and Chief Executive Officer CSA Group Ash Sahi President and Chief Executive Officer Deloitte Alan MacGibbon Managing Partner and Chief Executive Northwest and Ethical Investments John Kiernans President and Chief Executive Officer Scotiabank Rick Waugh President and Chief Executive Officer TD Asset Management Inc. Barbara Palk President TMX Group, Inc. Tom Kloet Chief Executive Officer Overview of CDP The Carbon Disclosure Project (CDP) is an independent not-for-profit organization holding the largest database of primary corporate climate change information in the world. CDP was launched in 2000 to accelerate solutions to climate change by putting relevant information at the heart of business, policy, and investment decisions. CDP furthers this mission by harnessing the collective power of corporations, investors, and political leaders to accelerate unified action on climate change. In 2009, 2,500 organizations in some 60 countries around the world measured and disclosed their greenhouse gas (GHG) emissions and climate change strategies through CDP, in order that they can set reduction targets and make performance improvements. In 2010, more companies than ever before are reporting through CDP and managing their emissions. These data are made available for use by a wide audience, including institutional investors, corporations, policy-makers and their advisors, public sector organizations, government bodies, academics, and the public. Climate change is not a problem that exists within national boundaries. That is why CDP harmonizes climate change data from organizations around the world and develops international carbon-reporting standards. CDP operates the only global climate change reporting system on behalf of 534 institutional investors (holding US$64 trillion in assets under management) and some 60 purchasing organizations such as Dell, EADS, PepsiCo, and Walmart. 9 1 Highlights of Carbon Executive Summary Disclosure in 2010 Each year Canada’s largest publicly traded companies are invited to respond to the information request they receive from the Carbon Disclosure Project (CDP). Respondents disclose their carbon strategies, their corporate arrangements for oversight of climate change and environmental risk management, their perceptions of risks and opportunities, their carbon budget, and actions under way or planned to manage the risks and seize the opportunities arising from climate change. The information they provide is invaluable to institutional investors, for the purpose of assessing a company’s commitment and performance in dealing with the implications of climate change, and to policy-makers for assessing the degree of corporate engagement and state of readiness. This report provides the highlights of the 2010 CDP responses and sheds light on trends in disclosure of corporate actions on climate change in Canada. In total, 92 companies responded to the 2010 information request out of the 201 companies in the 2010 Canada sample.3 These respondents collectively represent 73 per cent of the combined C$1.1 trillion in market capitalization of the companies making up the CDP Canada 200 sample.4 This year’s overall response rate of 46 per cent is comparable to the average rate over the previous four years, but is down from the peak of 55 per cent in 2008 and from 48 per cent in 2009. 3 The CDP Canada sample is the list of the 201 largest publicly traded companies defined by their market capitalization on the Toronto Stock Exchange on June 30, 2009. Key Findings Five aspects of the 2010 disclosures have been profiled in this report— governance of climate change, strategies, target setting, perceptions of risks and opportunities, and actions to adapt the company’s operations and directions to expected changes in climate. More respondents disclose having high-level climate change governance arrangements in place in 2010 than in 2009. The governance question was answered by 86 respondents this year, significantly more than the 58 respondents in 2009. Sixtyfive of the 2010 respondents to the governance question disclosed that the Board of Directors, a Board committee, or an executive member of the Board is responsible for climate change within the company, compared with 46 respondents to this question in 2009. Only 9 respondents reported that no individual or committee is responsible for climate change, compared with 12 respondents in 2009. A strong level of engagement and leadership is demonstrated through a formal governance arrangement for climate change at the highest corporate levels. Climate change is being embedded in corporate strategies. Many respondents have embedded climate change in their corporate strategies. In addition, some are reorienting the company from its traditional business lines to new business lines. The disclosures on strategic thinking provide evidence of respondents’ long-term commitment to adapting to climate change and reducing their greenhouse gas (GHG) emissions. Close to a third of respondents have set GHG reduction targets. Investors are interested in disclosures about how respondents are translating their carbon strategies into tangible goals. GHG reduction targets provide them with a clear indication of the respondent’s commitment and its GHG reduction pathways. In 2010, 27 respondents have disclosed their quantitative GHG reduction targets and another 17 have disclosed that they are developing them. For companies with a high level of carbon emissions, setting and then working to achieve a GHG reduction target signals a significant commitment and investment in managing their carbon. Three of the 2010 respondents have set “carbon-neutral” goals—BMO Financial Group, Groupe Aeroplan, and TD Bank Financial Group. Measuring and reporting their performance against these goals will be the next key steps in carbon management. Respondents continue to see more opportunities than risks. Traditionally, climate change was seen as having a negative impact on corporate financial performance. Refuting this view are the 2010 results on perceived risks and opportunities. Respondents reporting opportunities arising from regulatory, physical, and other factors (81 per cent in 2010) outnumber those seeing risks by a significant margin (69 per cent in 2010). The predominance of perceived opportunities over risks in 2010 continues a trend observed in the last three annual CDP Canada 200 reports. Respondents are adapting their operations and corporate directions in response to climate change. One 4 In 2009, the 97 respondents represented 77 per cent of the market capitalization of the survey population. 10 The Conference Board of Canada Executive Summary category of adaptation actions disclosed by respondents involves making changes to existing operations and practices in response to the physical risks arising from climate change. A second more aggressive category of adaptation action is to orient the business to new areas of opportunity. These are designed to take advantage of the fact that the climate is changing in a significant way and that the policy ground rules will be different in a carbonconstrained world. Exemplary disclosure practices continue to be demonstrated by Canada’s Carbon Disclosure Leaders. The “best in class” respondents in both the high-carbon and low-carbon impact sectors are identified by scoring each response using the global CDP Rating Methodology. The 16 respondents making up the Canadian Carbon Disclosure Leadership Index (CDLI) illustrate exemplary “best in class” disclosure.5 (See Table 1.) Their responses are comprehensive and reveal a firm corporate commitment to disclosure of their strategies and actions related to climate change. Their responses demonstrate that they have well-developed carbon assessment practices, they are managing the climate risks, and they are finding innovative ways to identify and seize climaterelated opportunities. Over the four years of identifying Carbon Disclosure Leaders, several recipients have been recognized several times, demonstrating a high level of consistency year over year in their disclosures. One respondent (Royal Bank of Canada) has been recognized as a Carbon Disclosure Leader in each of the four Canada 200 CDP reports, ten have scored in the top category three times, and seven have made the list twice. International benchmarking results for Canada in 2010 are comparable to results from 2009. Investors and policy-makers are interested in seeing how the Canadian picture on carbon disclosure compares with our international counterparts. Benchmarking of Canada’s results for a dozen selected disclosure indicators relative to 20 comparable countries and regions has been done again in 2010.6 Over four years of identifying Carbon Disclosure Leaders, several recipients have demonstrated a high level of consistency in their disclosures. Aggregated analysis of the selected indicators reveals that Europe dominates the list of the top 10 CDP samples, the United States S&P 500 ranks 12th, and Canada ranks 17th overall. With respect to the benchmarking results for the selected indicators, Canada’s ordinal rankings have improved relative to its peers in three categories in 2010: engagement with policy-makers on climate change, the overall response rate, and the percentage of respondents seeing regulatory risks and opportunities. Table 1: CDP 2010 Canada 200 Carbon Disclosure Leadership Index ARC Energy Trust BMO Financial Group Barrick Gold Cameco Corporation Cenovus Energy CN Emera Inc. National Bank of Canada Nexen Inc. Pason Systems Royal Bank of Canada Russel Metals SNC-Lavalin Group Stantec Inc. Telus Corporation TransAlta Corporation Source: The Conference Board of Canada. 5 The CDP’s scoring methodology was used for the first time in 2010. A customized Canadian methodology was used in 2007, 2008, and 2009. 6 The global data for the benchmarking analysis have been derived from Table 4, provided by the CDP London office. 11 Carbon Disclosure Project 2010 This is the fifth report in an annual series that started in 2006, profiling the disclosure practices and actions of the responding companies. The overall picture of Canada’s rankings relative to peer countries has not changed significantly in 2010 compared with the overall rankings in 2009. Canada ranks in the middle of the pack on a few aspects of disclosure, but lags behind other countries in several areas. In 2010, the mid-range rankings for Canada are in four areas: engaging with policy-makers, the overall response rate, having board-level governance and management incentives for climate change in place, and taking action to reduce emissions. Weak performance in 2010 was observed for two areas of interest to the Signatory Investors: the percentage of respondents with emissions reduction plans, and those that externally verify their emissions data. Disclosure by companies of all aspects affecting performance and risk is important. A perspective on achieving meaningful disclosure of corporate climate performance is provided in the guest chapter by Deloitte. It asserts that the value of corporate climate disclosure is as important as ever, and that the “new normal” for climate disclosure is to make it more relevant by presenting information in a manner that effectively communicates all aspects of corporate performance—ultimately providing a top-to-bottom view of how material climate change issues are being addressed in order to manage risk and drive growth and profitability. Outline of This Year’s Canada 200 CDP Report This report by The Conference Board of Canada is the fifth in an annual series that started in 2006.7 Based on guidance provided by the CDP Canada 7 The Conference Board of Canada is the Canadian partner for the Carbon Disclosure Project, joining partner organizations in 60 countries across the globe. 12 Advisory Board,8 the 2010 report profiles the disclosure practices and actions of the responding companies. Chapter 1: Highlights of Carbon Disclosure in 2010 starts with a description of this year’s respondents followed by the highlights of five aspects of disclosure. Highlights of disclosure trends are summarized from five years of CDP Canada 200 reports from 2006 to 2010. The 16 Canadian companies that have been identified as Leaders in carbon disclosure and their exemplary practices are profiled in Chapter 2: Canada’s Carbon Disclosure Leaders and Case Studies of Best Practices. The disclosure statistics of the 2010 Canadian respondents have been ranked in comparison with selected peer countries in Chapter 3: Benchmarking Canada’s Disclosure Results. This is the second year that benchmarking of disclosure statistics has been done, enabling a comparison of the 2009 and 2010 rankings. Chapter 4: Climate Change Disclosure Can Do More—And Mean More has been provided by Deloitte. It describes the need for Canadian publicly traded companies to assess the adequacy of their current climate disclosure practices in light of evolving expectations, norms, and standards, and concludes with an outline of the essential dimensions of an integrated approach to disclosure that connects climate performance, strategy, risk, and financial information. Chapter 5: Closing Observations provides observations on this year’s results and perspectives on carbon disclosure. 8 The 13 members of the CDP Advisory Board are listed on the back cover of this report. The Conference Board of Canada 1 This chapter provides the highlights of the 2010 CDP Canada 200 results from responses provided by Canada’s largest publicly traded corporations about their carbon management strategies and practices. This year’s respondents are dominated by the largest companies in the Canada 200 sample, with the strongest representation from five sectors: Energy, Materials, Banks, Diversified Financials, and Telecommunication Services. Features of the 2010 CDP results are described under five themes: governance arrangements, corporate strategies, target setting, perceptions of risks and opportunities arising from the impacts of climate change, and how respondents are adapting their operations, and for some, their corporate directions. Five years of CDP results have been compiled, which illustrate interesting trends in carbon disclosure in Canada. For example, the trends show the steadily growing support for the CDP by global and Canadian investment organizations. Each year’s respondents have represented over 70 per cent of the market capitalization of the Canada CDP sample since 2007. Respondents continue to see more opportunities than risks in 2010, continuing a trend set in 2008. The 16 Carbon Disclosure Leaders identified each year by scoring their responses have shown exemplary disclosure practices, and many have made the list over several years. Highlights of Carbon Disclosure in 2010 2010 Carbon Disclosure Project Each year, approximately 200 of Canada’s largest publicly traded companies, selected based on their market capitalization, are invited to fill out the CDP information request.9 (See text box “2010 CDP Information Request Places Emphasis on Risks and Opportunities and on Assessing Corporate Emissions.”) They are asked to disclose information on their climate change strategies, governance arrangements, perceptions of risks and opportunities, corporate carbon budget, and actions to manage the risks and seize the opportunities arising from climate change. The responses provide the database for the analysis and reporting by The Conference Board of Canada on carbon disclosure trends, best practices in carbon disclosure, and benchmarking of Canada’s disclosure results relative to selected peer countries. This year’s strongest representation comes from five sectors: Energy, Materials, Banks, Diversified Financials, and Telecommunication Services. 2010 CDP Information Request Places Emphasis on Risks and Opportunities and on Assessing Corporate Emissions The CDP information request10 is designed to elicit pertinent information of interest to the CDP’s Signatory Investors and other stakeholders. As in previous years, the 2010 information request emphasizes two areas of carbon disclosure: risks and opportunities related to regulatory initiatives and physical and other impacts; and the assessment of GHG emissions, energy and fuel use, and emissions trading. Other aspects probed in 2010 are climate change governance and corporate strategy, external verification, emissions trading, and climate change communications. 9 The information request was sent on February 4, 2010 to the 201 largest Canadian companies by market capitalization as measured on June 26, 2009. Responses were accepted by The Conference Board of Canada until July 5, 2010. 10 Carbon Disclosure Project 2010 Information Request, https://cdproject.net/CDP%20Questionaire%20Documents/ CDP_Investor_2010.pdf. 13 Carbon Disclosure Project 2010 A company’s reputation as a good corporate citizen demands attention to all external issues, of which climate change is an increasingly important one. 2010 Respondents In 2010, 92 companies in the Canada sample responded. They collectively represent 73 per cent of the combined C$1.1 trillion of market capitalization of the Canada sample, continuing the trend seen in previous years. The Conference Board’s CDP Canada 200 reports over the last five years have observed that the highest level of participation in carbon disclosure is typically demonstrated by the largest companies. This pattern continues in 2010. Dividing up the respondents according to four bands of market capitalization reveals that the response rate varies significantly. (See Chart 1.) In the group with market capitalization in excess of C$10 billion, close to 80 per cent of the companies responded in 2010, versus 28 per cent in the group with the smallest market capitalization (C$100 million to C$1 billion). The predominance of the largest in this sample companies is not surprising. Large companies are able to establish internal capacity with specialized expertise in climate change to address the emerging risks and opportunities. Large companies have a wide range of operational elements, each of which has a distinct carbon footprint that must be managed. The largest companies have a high public profile; their reputation in the public eye as good corporate citizens demands attention to all external issues, of which climate change is an increasingly important one. Good performance in this area contributes to maintaining their “licence to operate.” Sectoral Breakdown The distribution of respondents across individual sectors of the Canadian economy reflects the preponderance of companies on the Toronto Stock Exchange from the resources sectors and the financial services sectors. 100 100 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 per cent Number Chart 1: Number of Responses by Market Capitalization 0 75,000 to 10,000 10,000 to 2,000 Total number of responses Total number of companies 2,000 to 1,000 1,000 to 100 Per cent of responding companies Source: The Conference Board of Canada. 14 The Conference Board of Canada Highlights of Carbon Disclosure in 2010 (See Chart 2.) The 92 respondents in 2010 are dominated by companies from the Energy and Materials sectors, followed by Banks, Diversified Financials, and Telecommunication Services. When assessing the overall 2010 results, this distribution of respondents across sectors of the Canadian economy needs to be kept in mind. The 2010 Canada sample included 28 first-time companies that were not part of the Canada 200 sample in 2009. The new respondents in 2010 include Aurizon Mines, Cenovus Energy, Laurentian Bank of Canada, Pason Energy Systems, and Progress Energy Resources. Key Themes Arising From the 2010 Carbon Disclosure Results Each year’s CDP results are of interest to the investors who endorse the annual information request. The results are also of interest to policy-makers who use the results to gather insights into corporate strategies and actions, and to assess the “state of readiness” of companies to respond to policy decisions. They are also of interest to observers who make use of the results to understand how Canadian companies are addressing climate change.10 Policy-makers use the results to gather insights into corporate strategies/actions and to assess companies’ readiness to respond to policy decisions. Chart 2: Number of Respondents by Sector CDP 2010 (millions of 2009$) Energy Materials Banks Diversified Financials Telecommunication Services Capital Goods Utilities Food & Staples Retailing Insurance CDP 2010 Answered questionnaire Food, Beverage & Tobacco Transportation Commercial & Professional Services CDP 2010 Polled Media Retailing Software & Services Automobiles & Components Technology Hardware & Equipment Health Care Equipment & Services Real Estate Consumer Durables & Apparel Household & Personal Products Pharmaceuticals, Biotechnology & Life Sciences 0 5 10 15 20 25 30 35 40 45 50 55 Number of companies Source: The Conference Board of Canada. 10 15 Carbon Disclosure Project 2010 A key factor in assessing how serious companies are about climate change is the degree of engagement by the Board and the highest executive levels. In this year’s report, the 2010 results are examined in more detail under five themes:11 1.governance arrangements for climate change; 2.demonstration of corporate leadership through climate change strategies; 3.target setting and articulation of goals; 4.perceptions of opportunities versus risks; and 5.how companies are adapting their operations and corporate directions in addition to acting on reducing their GHG emissions. Governance of Climate Change— Engagement at the Highest Corporate Levels A key factor in assessing how serious companies are about coming to grips with climate change is the degree of engagement by the Board of Directors and by the highest executive levels in the organization. The CDP respondents’ degree of engagement at the highest levels has increased dramatically over the already impressive level of engagement reported in 2009. In the 2009 Canada 200 report,12 58 companies responded to the question on governance and 46 indicated that the overall responsibility for climate change is held by the Board of Directors as a whole, a Board committee, or another executive body; 12 of the 2009 respondents indicated that there was no group with responsibility for climate change within their company. An increase in the number of respondents to this question in 2010 suggests a broader level of participation in high-level governance of climate change. A total of 86 companies responded to the governance question, compared with 58 respondents in 2009. Of these, 65 respondents (76 per cent) have governance arrangements in place specifically for climate change. (See Chart 3.) More specifically, 31 of the respondents (36 per cent) report that the Board is responsible; a committee appointed by the Board is responsible Chart 3: Overall Responsibility for Climate Change Within the Company—CDP 2010 There is no individual or committee with overall rresponsibility for climate change Other, lower-level departments Board committee or other executive body: Subset of the Board Board committee or other executive body: Other individual or group Board committee or other executive body: Committee appointed by the Board Board committee or other executive body: Board/Executive Board 0 5 10 15 20 25 30 35 40 per cent (n=86) Source: The Conference Board of Canada. 11 In addition to the description of the overall results under the five themes, Appendix A—other 2010 Disclosure Results, provides information on other disclosure statistics, Scope 1 and Scope 2 emissions data, Scope 3 emissions data, and on participation in emissions trading. 16 12 The Conference Board of Canada, Carbon Disclosure Report 2009 Canada 200 Report (Ottawa: The Conference Board of Canada, October 2009) p. 36. The Conference Board of Canada Highlights of Carbon Disclosure in 2010 in 17 (19 per cent) of the responding companies. Only 12 respondents (14 per cent) leave responsibility with officers or lower-level departments within the corporation, which report to the senior executive and the Board periodically. Nine respondents (10 per cent) have no governance arrangements in place to deal with climate change. As examples of corporate governance, Cenovus has put a comprehensive governance arrangement in place for managing climate change, and Manitoba Telecom has assigned this responsibility to the Executive Committee chaired by its CEO. Climate change and greenhouse gas emissions issues are managed across the full spectrum of Cenovus’ governance, management and business structure. At the Board of Directors level, matters relating to climate change and greenhouse gas emissions are overseen and reviewed by the Safety, Environment and Responsibility Committee (the “SER Committee”) which reports to the Board of Directors of Cenovus Energy Inc. At the corporate strategic level, under the purview of our President and CEO, accountability for the management of climate change is held by our Executive VicePresident (EVP) of Environment and Strategic Planning. Responsibilities of this role include the general oversight of climate change across Cenovus, including the development of strategy, plans, programs and metrics to manage climate change risks and opportunities. —Cenovus Energy, CDP 2010 response, section 1.2 … the company’s Executive Committee has ultimate authority over the company’s Green Plan which is a key part of how the company addresses climate change. The driving force behind MTS Allstream’s approach to environmental responsibility is a strategy with objectives, priorities and green initiatives that constitute a corporate “Green Plan”. This plan is approved by the Executive Committee every year and is guided by an environmental commitment statement: We will reduce our impact on the environment and help our customers, employees and stakeholders do the same. For some companies, climate change is setting the future course for continued success in a carbon-constrained and climate-changed world. —Manitoba Telecom Services, CDP 2010 response, section 1.2 Climate Change Now Embedded in Corporate Strategies of Leading Companies From the standpoint of investors, a clear indication of corporate intent and commitment to address climate change is whether a company’s highest-level strategy contains climate change provisions. For some companies, climate change is driving a transformational agenda, which is setting the future course for the company’s continued success in a carbon-constrained and climatechanged world. As examples of respondents’ corporate strategies, Enbridge Inc. has established new ways to diversify, including using renewables for power generation in order to sustain the long-term growth of the company. CIBC has a five-part carbon management plan in place to reduce energy use and the associated GHG emissions. Enbridge’s strategic vision is to be the best energy delivery company in North America. Recognising the need to diversify, our core business is now referred to as ‘Liquids, Gas and Green,’ reflecting our activities in the transportation/pipelining of liquid hydrocarbons, distribution of natural gas, and our fastest growing business - renewable power generation, which includes wind, solar, waste heat recovery and fuel cell initiatives. In addition, carbon capture and sequestration 17 Carbon Disclosure Project 2010 A company’s setting a GHG emissions reduction target indicates to investors the firm’s intent to translate the corporate strategy into action. (CCS) also represents a potentially significant investment opportunity. The development of these new platforms to diversify and sustain long-term growth is an important strategy for Enbridge. —Enbridge Inc., CDP 2010 response, section 9.1 CIBC’s strategy is to continue to seek opportunities to reduce its energy use and associated greenhouse gas emissions in accordance with our Corporate Environmental Policy. CIBC’s Carbon Management Program is designed to assess and manage the impacts (both positive and negative) of climate change and climate change-driven regulations on our business operations and those of our clients. CIBC’s ongoing Carbon Management Program consists of the following elements: 1. Managing GHG emissions from CIBC’s Operations (our own climate change footprint); 2. Assessing impacts of Climate Change Regulation on CIBC’s Credit Portfolio; 3. Tracking and assessing opportunities in emerging North American carbon markets; 4. Developing screening tools for climate change risk in credit risk assessment; and 5. Developing a study of physical impacts of climate change on CIBC’s operations, and on our lending & investment portfolio. —Canadian Imperial Bank of Commerce, CDP 2010 response, section 9.1 Translating Strategies Into Tangible Goals and Targets The corporate strategy provides the framework for establishing specific targets for addressing climate change, such as commitments by large emitters to achieve specific levels of GHG reduction or “carbon-neutral” goals for respondents with low levels of carbon emissions. Building on the framework provided by corporate strategies, many companies have put specific targets in place as a means to focus their short-term climate change efforts and to motivate internal GHG reduction initiatives. Knowing whether a company has set a GHG emissions reduction target is an indication to investors of the firm’s intent to translate the corporate strategy into tangible, and measurable, actions. Target setting is in place, or is being developed, by half of the 89 respondents to this question. Respondents with emissions targets in place report either intensity-based targets (14 respondents) or absolute targets (13 respondents). Another 17 respondents do not have targets in place now, but have disclosed that they are developing them.13 For respondents that are large emitters, setting targets for GHG reductions is a challenging exercise, which commits the company to a significant investment of capital and effort. These companies are the most vulnerable to possible regulatory initiatives and to physical risks arising from climate change. Some respondents, particularly those in the natural resource sectors, have established carbon targets for specific facilities or for specific divisions of the company. By focusing their efforts on certain parts of their operations, they are demonstrating a commitment to getting started now on eliminating a portion of their emissions. 13 Three respondents report targets for energy efficiency, use of renewables, or equipment specifications. 18 The Conference Board of Canada Highlights of Carbon Disclosure in 2010 For example, a respondent in the agriculture sector, PotashCorp of Saskatchewan, has set a quantitative target for emissions reduction, and Brookfield Properties targets reduction of energy consumption. PotashCorp has set a target to reduce its normalized GHG rate by 10 per cent over the fiveyear period from 2007 to 2012. The carbon footprint has been calculated for each facility and a Carbon Management Plan was established to define possible emission reduction projects for our largest emission units and to outline possible future compliance responsibilities and opportunities. —PotashCorp of Saskatchewan, CDP 2010 response, section 9.1 A main facet of our strategy is in that we recognize that a high sustainability profile and optimal energy performance of our buildings makes them more marketable to the top tenants who want to conduct their business in the most sustainable environments while at the same time save on energy costs. Therefore, to meet these customer demands, our strategy directly targets the reduction of energy consumption which, as a commercial real estate company, significantly reduces our carbon emissions. —Brookfield Properties, CDP 2010 response, section 9.1 Three respondents, the BMO Financial Group, Groupe Aeroplan, and TD Asset Management, have set “carbonneutral” goals. The means being used to achieve them are a combination of internal actions to increase energy efficiency, use of renewable sources of electricity to replace electricity generated by fossil fuels, and purchase of offsets on the voluntary carbon market for any emissions that remain. We are on track to meet our publicly articulated commitment of enterprise carbon neutrality for energy consumption and transportation emissions in 2010. We have also committed to a targeted 5 per cent reduction in absolute emissions by the end of 2010 vs. 2007 baseline levels. The annual CDP disclosures provide information on how companies perceive the impacts of climate change, as sources either of risk or of opportunity. —BMO Financial Group, CDP 2010 response, section 9.1 Groupe Aeroplan is dedicated to being a carbon neutral enterprise. Groupe Aeroplan is committed to measuring and publicly reporting its carbon emissions, reducing its environmental impact, and entirely offsetting its scope 1, scope 2 and business travel. —Groupe Aeroplan, CDP 2010 response, section 0.1 TD’s global operations, including Canada, the U.S. and international operations became carbon neutral as of February, 2010. The first North American-based bank to do so. —Toronto-Dominion Bank, CDP 2010 response, excerpts from section 0.1 Trend of Perception of More Opportunities Than Risks Prevails in 2010 The annual CDP disclosures provide information on how companies perceive the impacts of climate change, either as a source of risks or of opportunities. Most companies report both, but more opportunities than risks are reported by the 2010 CDP respondents, continuing a trend observed since 2007. 19 Carbon Disclosure Project 2010 Respondents in sectors populated by large emitters are more proactive in taking action on seizing the opportunities related to climate change. When climate change emerged onto the policy scene post-Kyoto, the general belief was that the impacts on the financial performance of companies arising from measures that forced them to reduce their GHG emissions would be negative. Potential regulatory impacts included the impact of regulations that imposed an intensity ceiling or an absolute cap on emissions, a carbon tax, or other measures such as a cap and trade regime. Companies feared that broad policy measures could add substantial operating and compliance costs, leading to an impact on the financial bottom line. While respondents still see regulatory and other risks arising from climate change, they also see a significant opportunity agenda as well. Looking back, in the 2006 CDP Canada 200 Report, respondents reported seeing more risks than opportunities. There has been a shift in thinking since then, which reveals a predominance of opportunities over risks since 2008. (See Chart 4.) This trend has continued in 2010; the responses this year indicate that 81 per cent disclose seeing opportunities and 69 per cent see risks, a spread similar to the results in 2009. Companies With High Levels of Emissions More Proactive on Seizing the Opportunities Arising From Climate Change The 2010 results also provide information on the proportion of CDP respondents that are translating their perceptions of risk and opportunities into action. On an overall basis, 66 per cent of the respondents have taken action or have planned to take action on the opportunities related to climate change. A breakdown of the 2010 survey results into sectors characterized by their high level of emissions provides a clear indication that respondents in sectors populated by large emitters are more proactive in taking action on seizing the opportunities related to climate change. (See Chart 5.) Among the 89 respondents that answered this question, the results for low-carbon and high-carbon sectors are Chart 4: Per Cent of Risks and Opportunities Perceived From Climate Change (5 Years) 100 90 80 per cent 70 60 50 40 30 20 10 0 CDP4 (n=78) CDP5 (n=88) Risks CDP6 (n=103) CDP 2009 (n=93) CDP 2010 (n=89) Opportunities Source: The Conference Board of Canada. 20 The Conference Board of Canada Highlights of Carbon Disclosure in 2010 Chart 5: Respondents Taking or Planning Action on Opportunities Related to Climate Change Companies have not taken nor have they identified plans to take action on opportunities related to climate change Low carbon Companies with high levels of emissions are actively seeking ways to offset the risks by seizing opportunities available to them. High carbon Companies have or have planned to take action on opportunities related to climate change Top 50 0 5 10 15 20 25 30 35 40 45 Number of companies Source: The Conference Board of Canada. significantly different: 39 respondents (70 per cent) in sectors with high emissions are taking or planning action on climate change opportunities, versus 19 respondents (58 per cent) from sectors with low emissions. Companies with high levels of emissions are actively seeking ways to offset the risks by seizing opportunities available to them. The following examples illustrate how respondents are seizing opportunities, from the 2010 CDP responses of a power producer and a gas supplier, and from a telecommunications company. For two companies in the ATCO family, ATCO Power is pursuing lower carbon intensity power projects, and ATCO Gas is providing energy management services to its customers. Bell Aliant Regional Communications provides e-solutions to its customers to help them reduce their energy consumption and hence their emissions. ATCO Power is taking action on a number of fronts. ATCO has only built lower carbon intensity power projects since 1990. Sixteen such projects have been built worldwide between 1990 and the present. ATCO Gas: ATCO Gas currently provides advice on energy management through its ATCO EnergySense program, which has helped customers save money on their energy costs as well as reduce their GHG emissions. The emissions reduction aspect of managing energy consumption could be emphasized as more companies fall under GHG regulation. —ATCO Ltd., 2010 CDP response, section 6.6 Increasing energy costs can provide additional opportunities for our e-solutions which allow companies to substantially decrease employee travel for meeting purposes. Also, our ICT solutions transport information instead of material and people which results in dematerialisation and reduction of GHG emissions. For example music and video can now be delivered electronically rather than physically on CDs and DVDs. xwave, a Bell Aliant company, delivers advanced technology solutions to customers to help them reduce energy consumption in their data centers through services such as server virtualization. —Bell Aliant Regional Communications, CDP response, section 8.2B 21 Carbon Disclosure Project 2010 Many respondents foresee that different climatic conditions could open up new opportunities for growth and diversification in the future. Climate Change Is More Than Reducing GHGs: Corporate Actions to Adapt to Physical Risks and Other Opportunities In the initial phase of discussion on climate change post-Kyoto, the bulk of corporate attention was paid to the challenges of how to reduce GHGs below specified target levels. So while most of the policy discussion to date has been on reduction of GHGs, many companies acknowledge that the expected change in climatic conditions will have a significant impact on their infrastructure and ongoing operations within the current business paradigm. In addition to mitigation, many companies are also investing in adaptation efforts. Leading companies are changing their practices and even considering new corporate directions in response to current and expected impacts of climate change. One category of such adaptation actions involves making changes to existing operations and practices in response to the physical risks arising from climate change. For example, 30 respondents are acting or are planning actions to exploit opportunities arising from physical risks. More importantly, many foresee that different climatic conditions could open up new opportunities for growth and diversification in the future. A second more aggressive category of adaptation action is to orient the business to new areas of opportunity. These are designed to take advantage of the fact that the climate is changing in a significant way and that the policy ground rules will be different in a carbon-constrained world. Although not commonly referred to as “adaptation actions,” the 2010 CDP responses contain several examples of how companies are adapting their businesses to the expected changing conditions in which they operate. Two examples follow of the undertakings by two respondents regarding actions to adapt corporate operations to climate change. CNR is responding to several 22 changes arising from climate change, and SNC Lavalin Group is adapting its services to meet the needs of its clients. ADAPT THE BUSINESS TO THE CONSEQUENCES OF CLIMATE CHANGE —The Company is focused on taking advantage of the positive conditions impacting the rail industry, including those related to climate change, in a manner that optimizes our strategic positioning. This includes: i) Communicating to our customers on government policies supporting rail freight,… ii) Taking advantage of the growing demand for low carbon products and the recognition of the environmental benefits of rail versus truck.… iii) Growing market share in renewable energy markets—The Company continues to grow its shipments of commodities related to cleaner energy and technologies, including biodiesel, ethanol, wind turbine components and pellets. iv) Maintaining a diversified business portfolio—The Company continues to maintain a diversified portfolio of business from a variety of commodity groups…. v) Preparing for potential disruptions to operations / services—The Company continues to invest significantly in track infrastructure upgrades, execute and enhance our seasonal readiness plans, and ensure processes and procedures exist to recover from emergency weather situations. —Canadian National Railways, CDP 2010 response, excerpts from section 9.1 The real climate change risk to a corporation such as SNC-Lavalin relates to its ability to adapt to changing markets so as to continue to serve its clients as they themselves must adapt to climate change issues. —SNC Lavalin Group, CDP 2010 response, section 3.8 The Conference Board of Canada Highlights of Carbon Disclosure in 2010 Five-Year Trends in Carbon Disclosure The five annual CDP Canada 200 reports since 2006 document developments in carbon disclosure in Canada from 2006 to 2010. (See Table 2.) First, the support provided by the world’s leading investors to the CDP continues to increase, more than doubling between 2006 and 2010 in terms of the number of Signatory Investors and in terms of total assets under management. In 2010, 534 institutional investors, with assets of US$64 trillion under management, have endorsed the CDP information request. The participation by Canadian Signatory Investors has increased even more dramatically, from 11 in 2006 to a total of 49 investment organizations in 2010. This increasing participation by investors signifies the importance of carbon disclosure to them. Table 2: Five Years of Carbon Disclosure—Selected Statistics CDP 2006 CDP 2007 CDP 2008 CDP 2009 CDP 2010 Participation by Global Investors Features 225 investors 315 investors 385 investors 475 investors 534 investors Total Assets Under Management $31 trillion in assets Canadian Signatory Investors Market Capitalization Held by Respondents (relative to the total market capitalization held by the survey population) $55 trillion in assets $64 trillion in assets 11 $ 41 trillion in assets $57 trillion in assets 30 40 48 49 (Information for the 200 largest companies in the 2006 survey population is not available.) 70 per cent 77 per cent 77 per cent 73 per cent Responses # Responded 78 88 110 97 92 Total Population 280 200 200 200 201 Response Rate 28 per cent 44 per cent 55 per cent 49 per cent 46 per cent Opportunities 63 per cent 86 per cent 88 per cent 85 per cent 81 per cent Risks 77 per cent 85 per cent 83 per cent 73 per cent Companies Reporting High-Carbon Climate Disclosure Leaders Disclosure Leaders1,2 (Not done in 2006) Alcan Catalyst Paper Emera Inc. EnCana Corp. Gaz Metro LP Nexen Inc. Penn West Energy Trust Suncor Energy Talisman Energy TransAlta AbitibiBowater ARC Energy Trust Bombardier Catalyst Paper Enbridge Inc. EnCana Corp Gaz Metro LP Nexen Penn West Energy Trust Suncor Energy ARC Energy Trust Bombardier Catalyst Paper CNR Emera Inc. Enbridge Inc. EnCana Corp. Gaz Metro LP Penn West Energy Trust Suncor Energy Inc. Low-Carbon Climate Disclosure Leaders Alimentation Couche-Tard BCE Inc. CIBC Royal Bank of Canada TELUS Corp. Alimentation Couche-Tard Bank of Nova Scotia BCE Inc. CIBC Royal Bank of Canada BMO Financial Group BCE Inc. CIBC Royal Bank of Canada Toronto Dominion Bank 69 per cent Carbon Disclosure Leaders ARC Energy Trust BMO Financial Group Barrick Gold Cameco Corporation Cenovus Energy CN Emera Inc. National Bank of Canada Nexen Pason Systems Royal Bank of Canada Russell Metals SNC-Lavalin Stantec TELUS Corporation TransAlta Corporation 1. For 2007, 2008, and 2009, the methodology used for scoring the responses was developed by The Conference Board of Canada, in consultation with the CDP Canada Advisory Board. For 2010, the scoring methodology developed by the CDP London office was used. 2. The Disclosure Leaders were grouped into high-carbon impact sectors and low-carbon impact sectors in 2007–09. In 2010, the 16 Carbon Disclosure Leaders were not differentiated. Source: The Conference Board of Canada. 23 Carbon Disclosure Project 2010 The fact that the bulk of the market capitalization is represented by the respondents each year underlines the value of the CDP results to investors. The market capitalization represented by each year’s respondents has made up over 70 per cent of the total market capitalization of the survey population over the last four years. The fact that the bulk of the market capitalization is represented by the respondents each year underlines the value of the CDP results to investors. The average response rate reflects decisions by Canada’s largest publicly traded corporations regarding participation in voluntary carbon disclosure. The average response rate for 2007 through 2010 is 49 per cent. The response rate peaked at 55 per cent in 2008, at the time when climate policy discussions were active, and has declined since. As noted earlier, the perception of opportunities and risks has shown a shift to a consistent pattern in corporate thinking on how the impacts of climate change are seen. The reported number of perceived opportunities relative to perceived risks was essentially equal in 2007, but changed to a predominance of opportunities over risks in 2008 and 2009, which has continued in 2010. 24 Since 2007, the top-scoring respondents have been identified as “Carbon Disclosure Leaders” each year. For rating purposes, The Conference Board of Canada applied a customized local methodology between 2007 and 2009, and introduced the global CDP Rating Methodology in 2010. The responses are evaluated based on the quality, transparency, and comprehensiveness of their CDP disclosures. Many of the Canadian Carbon Disclosure Leadership Index (CDLI) recipients have demonstrated a high level of consistency year over year in their disclosures; one respondent (Royal Bank of Canada) has been recognized in each of the four CDP reports, ten companies have scored in the top category three times, and seven have made the list twice. Details on how the Carbon Disclosure Leaders are determined and case studies on best practices reported by this year’s Leaders are provided in the following chapter. The Conference Board of Canada 2 Company responses are examined and assessed in a number of ways as part of the annual CDP Canada Report. An important high-level indicator for the quality and comprehensiveness of individual company responses is the carbon disclosure score, based on the CDP Rating Methodology.14 For Canadian responses, the global CDP Rating Methodology is applied for the first time in 2010. In 2007, 2008, and 2009, a customized local scoring methodology was used to rate the disclosure quality of the responses. (See text box “2010 Rating Differs From 2009 Scoring Approach.”) The companies with the highest carbon disclosure scores are listed in the CDLI.15 This index scores individual assessments based on Canada’s Carbon Disclosure Leaders and Case Studies of Best Practices the quality of their disclosure. The scoring is a measure of the quality of each company’s CDP response in both the quantity of information and depth of content. Performance is not measured in this year’s scoring of the Canada 200 responses. The scoring does not attempt to assess the details of the content or merit of actions taken by respondents. Data supplied by respondents are assumed to be reliable and not verified through the scoring process. The scoring is a measure of the quality of each company’s Carbon Disclosure Project response in both the quantity of information and depth of content. Further background information on disclosure rating and the interpretation of results is included in Appendix B. The companies included in the CDLI— Canada’s Carbon Disclosure Leaders— have achieved superior scores relative to 2010 Rating Differs From 2009 Scoring Approach The 2010 rating differs from the 2009 scoring approach in the following key points: For the 2010 report, only public responses were scored. Private submissions did not receive a score. The individual company scores are not published in this report. The high- and low-carbon impact distinction has been eliminated; this distinction had been made in previous years to make some accommodation for the reality that low-carbon impact companies tend not to have the same level of detail to disclose, which therefore made it more difficult to rank them as high as their high-carbon impact counterparts. With the adoption of the global CDP Rating Methodology, there is more adaptability to scoring appropriately for each sector. Therefore, they are on a level playing field and there is no need to differentiate the scoring between the two groupings. 14 The CDP Rating Methodology is revised on an annual basis to reflect changes in the CDP questionnaire and latest trends in carbon reporting. It is publicly available on the CDP website, www.cdproject.net/en-US/Respond/Documents/Rating_ Methodology_2010.xls. 15 In previous CDP Canada reports, the disclosure leadership rating was referred to as Climate Disclosure Leadership Ranking (CDLR). 25 Carbon Disclosure Project 2010 The companies that are Carbon Disclosure Leaders are among Canada’s most involved and most transparent in their initiatives to address climate change. other CDP respondents. The CDP 2010 Canada CDLI includes the 16 top-scoring companies. Chart 6 depicts the disclosure score ranges among the Climate Disclosure Leaders as well as the major sectors. The highest scoring companies are found among familiar sectors: Energy companies, Banks, and Utilities are three sectors that have shown consistently high scores over past years. Other high-scoring sectors this year include Materials and Capital Goods. Overall, there is a wide range of carbon disclosure scores, from 37 to 90 out of 100, indicating that not all companies are equally advanced in their climate change reporting. The Materials and Energy sectors, which contain the highest-scoring companies, also include the lowest-scoring companies and have a range in scores of 47 and 53 points, respectively. A number of sectors are not represented in Chart 6 in order to ensure the confidentiality of the scores achieved by companies in these sectors, as only one response was scored in each. These sectors are Automobiles & Components; Commercial & Professional Services; Food, Beverage & Tobacco; Health Care Equipment & Services; Insurance; Media; Real Estate; and Retailing. Recognizing Canada’s Carbon Disclosure Leaders The respondents that receive the top scores are listed each year as Carbon Disclosure Leaders. The top 16 companies in the CDLI are recognized for their exemplary disclosure practices. These companies are among Canada’s most involved and most transparent in their initiatives to address climate change. These companies have shown through their responses that they are very forward looking and many have already integrated strategies to address climate change in their day-to-day business.16 More than ever, this year’s Leaders have also shown through their responses their interest and intent to capitalize on opportunities presented through climate change, whether through developing new lines of business or through advancing their current business with enhanced strategic self-positioning as “greener” options. Chart 6: Range of Scores for Carbon Disclosure Leaders and Selected Sectors Leaders Banks Capital Goods Diversified Financials Energy Materials Telecommunication Services Transportation Utilities 0 10 20 30 40 50 60 70 80 90 100 Scores Source: The Conference Board of Canada. 16 For further details on the intention behind the scoring and how the scoring results can be interpreted, please refer to Appendix B. 26 The Conference Board of Canada Canada’s Carbon Disclosure Leaders and Case Studies of Best Practices The scores of this year’s Carbon Disclosure Leaders are from 75 to 90 points, a range of 15 points. Although there was close competition from other companies, eight of which scored between 70 and 75 points, the Leaders stand above the rest. The 2010 Carbon Disclosure Leaders are listed alphabetically in Table 3. They include multiple past years’ Leaders as well as newcomers to the Leadership Index. The continued success of companies that rank among the Leaders over multiple years shows their commitment to continued best practices in disclosure. One company has made the Leaders list each of the four years disclosure scoring has been done in Canada: the Royal Bank of Canada. Two of this year’s Leaders have been honoured for the third time: ARC Energy Trust and Emera Inc. The BMO Financial Group, CN, Nexen, and TransAlta Corporation have all been Leaders once before this year. Additionally, among new Leaders this year is Cenovus Energy, a new company that was formed out of a subdivision of the former EnCana Corporation, which was a three-time past winner. Other firsttime Leaders this year include Barrick Gold, Cameco Corporation, National Bank of Canada, Pason Systems, Russell Metals, SNC-Lavalin, Stantec, and Telus Corporation. Remarkably, Pason Systems is not only a first-time Carbon Disclosure Leader but also a first-time CDP participant this year. One company, and past multi-year Carbon Disclosure Leader, that also deserves an honourable mention is Catalyst Paper. This company has consistently produced exemplary responses. Catalyst Paper is no longer among the top 200 Canadian companies by market capitalization and yet it continues to respond voluntarily. Its substantially different market capitalization status this year has made it ineligible for Leadership status; however, its response was firmly among the best of the best. Table 3: CDP 2010 Canada 200 Carbon Disclosure Leadership Index ARC Energy Trust BMO Financial Group Barrick Gold Cameco Corporation Cenovus Energy CN Emera Inc. National Bank of Canada Nexen Inc. Pason Systems Royal Bank of Canada Russel Metals SNC-Lavalin Group Stantec Inc. Telus Corporation TransAlta Corporation The continued success of companies that rank among the Leaders over multiple years shows their commitment to continued best practices in disclosure. Source: The Conference Board of Canada. Carbon Disclosure Leaders Demonstrate Best Practices This year’s Investor CDP questionnaire was broken into five distinct sections: governance; risks and opportunities; strategy; GHG emissions accounting, energy and fuel use, and trading; and climate change communications. Excellent examples of “best practices” have been reported by this year’s respondents. For each of the following sections, different case studies are provided based on disclosure by the 2010 Carbon Disclosure Leaders. Governance The governance section of the questionnaire examines the company’s disclosure of its governance structure established to oversee and implement climate change related activities. These answers are considered complete when they include information on where responsibility for climate change governance lies within the company, the process used in the company’s governance structure, and whether any 27 Carbon Disclosure Project 2010 This year’s responses clearly reflect that forward-looking companies have plans to capitalize on opportunities presented through climate change. form of incentives is used within the company to promote the management of climate change issues. Responses among the Leaders represented varied governance structures from very codified and hierarchical “top-down” approaches from companies like the BMO Financial Group and Cenovus Energy, to much more decentralized approaches as seen in SNC-Lavalin Group. A key observation among the Leaders is that 10 of the 16 Leaders are now offering incentives, often monetary rewards or other compensation, to promote the management of climate change issues. This is a significantly higher ratio of companies offering incentives than in the broader respondent population where 49 respondents do not offer incentives, compared with the 39 that do. This level of engagement among the Leaders shows their commitment to not only disclose climate change related information but also manage climate change issues. Best Governance Practice Case Study—Barrick Gold Climate change progress and status is governed within Barrick Gold by an Executive Committee appointed by the Board of Directors. “This Executive Committee is responsible for approving all company-wide standards and in 2009 it approved Barrick’s Climate Change Standard.”17 Barrick also formalized its GHG Collection Standard in 2009. The Board Health, Safety and Environment Committee is accountable for progress on climate change and works with and provides oversight to the Executive Committee. Energy usage and GHG emissions reports are provided quarterly from each facility through regional management to corporate management. Barrick’s energy usage and GHG emissions reporting is also third-party assured. Incentives for the management of climate change issues are available across the company. All of Barrick’s employees are eligible for employee incentive programs and will soon be eligible for environmental awards for eco-efficiency that are currently under development. Business unit managers are further eligible for management compensation and the Chief Operating Officer’s Performance Commitments include energy-efficiency efforts. Risks and Opportunities The Climate Change Risks and Opportunities section captures disclosure on climate change related to risks and opportunities that emerge through regulatory, physical, and other impacts of climate change. Risks and opportunities that are described in the fullest detail, especially including company-specific and quantitative information, are awarded the highest scores for this section. The risks and opportunities responses of this year’s Leaders clearly reflect that forward-looking companies have plans to capitalize on opportunities presented through climate change. Some examples of this are Telus Corporation’s increased focus on developing technologies that allow for “virtual meetings,” thus avoiding carbon-intensive business travel; Cameco Corporation’s focus on the future of nuclear power as an alternative to carbon-intensive fossil fuel-burning power generation technologies; the Royal Bank’s involvement in financing various “green” projects; and both SNC-Lavalin Group and Stantec’s focus on developing current and new lines of business in environmental services and consulting. Climate change will continue to necessitate adaptation and innovation, and the Carbon Disclosure Leaders clearly recognize emerging opportunities. Best Risks and Opportunities Practice Case Study—Stantec Stantec provided a comprehensive response to the Climate Change Risks and Opportunities section of the questionnaire. Stantec disclosed that it performs a formal assessment of the key risks facing the corporation on at 17 Barrick Gold, CDP 2010 response. 28 The Conference Board of Canada Canada’s Carbon Disclosure Leaders and Case Studies of Best Practices least an annual basis. The company has also developed a professional capacity to undertake Climate Change Risk and Vulnerability Assessments, which it will be able to deploy internally within the firm to undertake risk assessments of operations related to climate change. Stantec sees significant physical risks as potential future problems. These are mainly expected to be due to possible extreme weather events, resulting in possible other risks such as increased insurance premiums, increased material costs, supply chain interruptions, and increased travel costs. As well, increased energy costs could also affect Stantec’s operating costs. More than risks, Stantec sees opportunities related to climate change. Regulatory requirements on climate change are expected to result in increased market opportunities for many of Stantec’s sustainability-related services. In addition, the growing availability of incentives related to climate change mitigation or adaptation may also benefit Stantec. Physical impacts of climate change open opportunities for Stantec’s consulting practices in Architecture, Buildings Engineering, and Urban Land Planning. The recognition of other areas of opportunity have caused Stantec to create a Sustainable Management Consulting team, which has already developed a business plan and begun to develop service offerings. Strategy The Strategy section of the CDP questionnaire is scored on the basis of disclosure of overall business strategy, the disclosure of emissions reduction targets, and details relating to emissions reduction activities. Scores are awarded for the depth of disclosure in each of these strategic areas. Carbon Disclosure Leaders have a higher propensity to have emissions reductions targets than the broader Canadian CDP respondents. Seven of the 16 Leaders have emissions reduction targets in place, and four have indicated that they are currently developing targets. This represents 69 per cent of the respondents. There is a smaller per cent of the broader Canadian group of respondents, 52 per cent, which collectively have either established emissions reduction targets or are working to develop them. Best Strategy Practice Case Study—Emera Inc. Emera Inc. provided a comprehensive and detailed strategy disclosure. The company indicated its multiyear strategy to be the best utility in Canada in six key areas, including the environment. Its strategy is described as a portfolio approach and includes activities such as the design and implementation of energy conservation and efficiency programs, the addition of more renewables, and the pursuit of cleaner import energy sources, among other activities. Carbon Disclosure Leaders have a higher propensity to have emissions reductions targets than the broader Canadian CDP respondents. Emera does currently have an emissions reduction target, or rather a series of targets, laid out for the 2010–11, 2012–13, 2014–16, 2017–19, and 2020 time periods. These targets represent a decreasing stabilization target of total Scope 1 emissions. Emera has also listed a number of specific activities that the company is involved in, in order to reduce its overall GHG emissions. These activities are all disclosed with the timescale of the actions. Emera estimates that the net present value of the cost of the preferred base plan from 2008–2032 is approximately $10 billion (2008 C$). Further to its activities to strategically reduce emissions, Emera is also involved in engaging policy-makers directly and through industry associations such as the Canadian Electricity Association. GHG Emissions Accounting, Energy and Fuel Use, and Trading The GHG emissions accounting, energy and fuel use, and trading section of the 2010 CDP questionnaire is the most 29 Carbon Disclosure Project 2010 The Carbon Disclosure Leaders tended to have a slightly higher rate of publishing information about their company’s response to climate change. detail-oriented. It requires disclosure on emissions boundaries, methodology used in collecting emissions data, direct Scope 1, and indirect Scope 2 and Scope 3 emissions, as well as emissions trading.18 To score well in this section, companies need to disclose as much information as possible on their emissions collection and monitoring data, as well as full explanations wherever those data may not be available. All of the Carbon Disclosure Leaders, regardless of their carbon footprint, identified Scope 1 and 2 emissions totals in their disclosures. Best GHG Emissions Practice Case Study—TransAlta Corporation TransAlta Corporation’s GHG emissions disclosure was among the most complete for this section of all responders. Some markers of its comprehensiveness include the fact that the company disclosed emissions data for multiple years, from 2006 to 2009, and provided a complete breakdown of both Scope 1 and 2 emissions for each of the four reporting years. TransAlta’s 2010 response also provided information on financial intensity measurements used within the company, and activity-related intensity measurements. A year-overyear reduction in net emissions was explained and its participation in the Alberta offset market where purchased offsets are used for compliance purposes at lower cost than alternatives was also disclosed. Overall, TransAlta has delivered disclosure in this section that is detailed, specific, and thorough, thus awarding the company a best practice spotlight. Climate Change Communications Climate change communications is the final and briefest section of this year’s investor CDP questionnaire. The main area of disclosure requested in this section is whether the company has published information about its response to GHG emissions and climate change elsewhere than in its CDP response, and whether that publication was voluntary. A company that discloses simple yes and/or no answers in this section is eligible for a full score. The Carbon Disclosure Leaders tended to have a slightly higher rate of publishing information about their company’s response to climate change/ GHG emissions in places other than their CDP response. Eighty-one per cent of Leaders provide this type of publication compared with 75 per cent of the total respondents. Best Climate Change Communications Practice Case Study—Royal Bank of Canada The Royal Bank of Canada (RBC) has not only disclosed its practices fully with regards to communications but is also highly involved in communicating its climate change/GHG emissions practices with its shareholders and the public. Information on RBC’s assessment of environmental risks, including climate change, can be found in its 2009 Annual Report. Its 2009 Corporate Responsibility Report also contains an environment section as well as the “RBC Environmental Blueprint,” which outlines its climate change related commitments. In addition, the 2009 SOFT Footprint table offers data on GHG emissions as well as other environmental metrics. The thoroughness and availability of RBC’s communication practices as disclosed in its CDP response have made it an exemplary case study in this area. 18 The terminology used in the CDP questionnaire refers to the GHG Protocol reporting standard. 30 The Conference Board of Canada 3 Benchmarking Canada’s Disclosure Results A benchmarking comparison of the carbon disclosure results, derived from the CDP disclosures of the respondents worldwide, is useful for the purpose of assessing where Canada’s disclosure results rank relative to our international counterparts. their company’s response to climate change in mainstream annual filings and 72 per cent of respondents with boardlevel responsibility for climate change, to low scores for independent verification of their Scope 1 (28 per cent) and Scope 2 (21 per cent) emissions data. Global Disclosure Results Show Wide Variation in Results Across Selected Disclosure Indicators Canada is not alone in showing wide variation in scoring across the selected indicators. By comparison, Australian respondents score well in the percentages of respondents reporting board-level responsibility for climate change (83 per cent) and for reporting their company’s response to climate change in mainstream annual filings and Corporate Sustainability and Reporting reports (88 per cent), to a low of 40 per cent of respondents reporting emissions reduction targets. Global carbon disclosure results can be assessed by comparing the percentage scores for each country’s respondents for selected disclosure indicators. The CDP has compiled the scores for 12 disclosure indicators for 27 national or regional samples, and for five global sectors.19 (See Table 4.) This table outlines some of the key findings from CDP 2010 by geography or industry dataset.20 One observation from scanning the global key trends snapshot is that while the disclosure indicators reveal that respondents in each country are doing well in some categories, there are others where improvements could be made. As might be expected, each national or regional sample has its own unique range of scores. For the Canada 200 respondents, the percentage scores range from a high of 73 per cent of respondents21 reporting A benchmarking comparison is useful for the purpose of assessing where Canada’s disclosure results rank relative to our international counterparts’. For the U.S. S&P 500 respondents, 80 per cent report their responses to climate change in mainstream filings, and 77 per cent of the respondents are taking action to reduce their emissions. Less than a third of the U.S. respondents independently verify their emissions data (29 and 32 per cent for Scope 1 and Scope 2 emissions, respectively). Clearly, no one country or region has as yet achieved high disclosure ratings in all disclosure categories across the board. 19 The benchmarking findings are based on information that is assumed to be reliable, regardless of the country of origin or the size of the reporting companies. 20 For some samples, the number of companies included in a table may be lower than the original sample size due to takeovers, mergers, and acquisitions. 21 Differences in the numerical statistics between the information provided by CDP London in Table 4 and the values reported in Chapter 1 are due to late responses received after the cut-off date of July 5, 2010. 31 Carbon Disclosure Project 2010 % of sample answering CDP 201024 % of responders with Board or other executive level responsibility for climate change % of responders with management incentives % of responders with emissions reduction targets % of responders taking actions to reduce emissions % of responders indicating that their products and services help third parties to avoid GHG emissions % of responders seeing regulatory risks % of responders seeing regulatory opportunities % of responders engaging policy-makers on climate issues to encourage mitigation or adaptation % of responders reporting the company’s response to climate change in mainstream annual filings / CSR reports % of responders independently verifying any portion of Scope 1 emissions data % of responders independently verifying any portion of Scope 2 emissions data Table 4: Key Trends Snapshot 22 This table outlines some of the key findings from CDP 2010 by geography and industry dataset.23 32 80 46 56 73 41 65 70 60 80 48 40 Australia 200 47 83 46 40 73 55 69 76 73 88 43 43 US Bonds 180 82 78 62 70 87 55 60 71 88 91 54 46 Brazil 80 72 68 29 23 57 55 61 78 66 74 28 28 Canada 200 46 72 41 32 63 47 51 65 64 73 28 21 Central & Eastern Europe 100 12 85 57 57 71 43 71 100 85 57 57 57 China 100 11 57 57 57 57 43 71 71 57 86 43 29 Emerging Markets 800 29 77 50 47 74 49 70 84 68 78 39 37 Europe 300 84 94 62 79 87 71 74 87 77 97 68 60 FTSE All-World 800 74 83 61 70 77 65 69 78 85 92 57 49 France 250 30 89 48 69 79 60 72 86 62 93 57 46 Germany 200 61 70 33 47 50 57 43 68 42 66 35 23 Global 500 82 84 63 70 87 66 66 77 80 93 59 52 Global Electric Utilities 250 48 86 47 60 72 75 85 90 88 92 58 31 Global Transport 100 25 88 60 89 72 52 88 72 64 84 44 36 India 200 21 88 33 33 69 39 39 90 63 64 25 19 Ireland 40 50 80 26 60 80 33 66 53 46 80 33 33 Italy 60 35 66 57 76 85 71 76 80 66 90 62 62 Japan 500 41 89 61 91 84 73 81 81 60 94 28 28 Korea 200 42 60 52 46 61 44 70 73 50 56 29 29 Latin America 50 54 72 25 15 50 53 68 84 40 78 31 32 Netherlands 50 66 93 63 70 76 71 66 86 70 97 61 65 New Zealand 50 46 78 21 39 39 16 60 43 60 52 22 22 Nordic 200 65 88 44 69 77 67 68 79 62 93 45 37 Portugal 40 30 83 41 41 83 83 91 91 58 91 67 67 Russia 50 8 50 0 100 50 50 50 50 0 50 0 0 South Africa 100 74 95 50 42 82 42 77 85 80 92 39 41 Spain 85 40 87 53 71 84 72 81 84 62 97 69 63 Switzerland 100 58 77 26 52 59 56 38 63 42 82 40 35 37 50 25 25 41 39 35 29 Sample: geography/ number of companies Asia ex-JICK 13525 Turkey 50 24 75 87 37 62 0 88 72 UK FTSE 600 51 96 49 61 73 48 68 74 59 87 US S&P 500 69 67 48 53 77 53 50 61 63 80 Source: CDP London. 22 The key trends table provides a snapshot of response trends based on headline data. The numbers in this table are based on the online responses submitted to CDP as of July 14, 2010. They may therefore differ from numbers in the rest of the report, which are based on the number of companies that responded by the deadline. 23 For some samples the number of companies included in the table may be lower than the original sample size due to takeovers, mergers, and acquisitions. 24 Includes offline responses to the CDP 2010 questionnaire & indirect answers submitted by parent companies. All other key trend indicators are based on direct & online company responses only. 25 Asia excluding Japan, India, China, and Korea. 32 The Conference Board of Canada Benchmarking Canada’s Disclosure Results Benchmarking of Disclosure Results of Canada’s Respondents Relative to Their Peers Investors and policy-makers are interested in knowing how Canada’s disclosure results under various categories of carbon disclosure compare with results reported by similar countries across the globe. Two benchmarking comparisons provide insights—first where Canada scores on an overall basis with respect to its peers by comparing total aggregate scores, and second, an ordinal ranking of Canada’s results using selected disclosure indicators. First, a selection of 20 national and regional samples from Table 4 was made that are comparable to Canada.26 The reporting entities can be ranked in order of their total percentage scores across all 12 indicators. By this measure, the top 10 CDP samples are the Europe 300, Spain 85, Netherlands 50, Portugal 40, Italy 60, Japan 500, France 250, Nordic 200, South Africa 100, and the U.K. FTSE 600. This list is dominated by six countries that are part of the European Union Emissions Trading Scheme (EU-ETS). By comparison, the U.S. S&P 500 ranks 12th and the Canada 200 ranks 17th. Second, in order to benchmark how the 2010 Canadian respondents fare relative to their peers, the reported results for each of the 12 disclosure indicators have been ranked ordinally to indicate how the respondents’ actions in Canada compare with their peers. (See Table 5.) Table 5: B enchmarking Canadian Responses for Selected Disclosure Indicators 2009 and 2010 Benchmarking Results—Ordinal Rankings Relative to 20 Similar Countries 2009 2010 Per cent of sample answering CDP 2010 Selected Disclosure Actions 15th 13th Per cent of respondents with board-level responsibility for climate change 13th 14th Per cent of responders with management incentives NR[1] 13th Per cent of responders seeing regulatory risks 19th 17th Per cent of responders seeing regulatory opportunities 20th 16th Per cent of responders seeing physical risks 18th NR[2] Per cent of responders seeing physical opportunities 19th NR Per cent of responders with emissions reduction targets NR 18th Per cent of responders with an emissions reduction/energy reduction plan 18th NR Per cent of responders engaging with policy-makers on climate change 9th 7th Per cent of responders taking actions to reduce emissions NR 14th Per cent of responders reporting the company’s response in mainstream annual filings / CSR reports NR 17th Per cent of respondents disclosing Scope 1 emissions 10th NR Per cent of respondents disclosing Scope 2 emissions 10th NR Per cent of responders indicating that their products and services help third parties to avoid emissions NR 16th Per cent of respondents engaging / considering participation in emissions trading 10th NR Per cent of responders externally verifying emissions disclosure 19th 18th (Sc. 1) 20th (Sc. 2) [1] Of the 17 selected disclosure categories listed in this table, six have been tabulated by CDP London in 2009 and in 2010, and 11 are reported in one year only. [2] Not reported by CDP London in 2010. Sources: The Conference Board of Canada; CDP London. 26 For the purposes of benchmarking the engagement by Canadian respondents in comparison with other countries and regions, a subset has been extracted from Table 4. This subset consists of 18 countries and the Nordic 200 and the Europe 300 samples. Countries excluded for the purpose of this benchmarking exercise, due to the limited number of respondents in 2010, are Asia ex-JICX 135, Central & Eastern Europe 100, China 100, Emerging Markets 800, FTSE AllWorld 800, India 200, Russia 50, and Turkey 50, and the U.S. Bonds, Global 500, Global Electric Utilities 250, and the Global Transport 100. 33 Carbon Disclosure Project 2010 The response rates and disclosure trends in North America will likely increase once government-mandated climate change policies are implemented. Comparing the ordinal rankings for 2010 and 2009, Canada’s rankings have improved in three significant categories relative to the peer countries: engagement with policy-makers on climate change (from 9th to 7th), overall response rate (from 15th to 13th), and in the percentage of respondents seeing regulatory risks and opportunities. These changes are positive indications of a greater level of engagement by Canada’s largest companies relative to their global peers. Comparing the 2010 and 2009 ordinal rankings, the overall results convey a similar message to that observed in 2009. The Canadian responses rank in the middle of the pack for actions such as engaging with policy-makers, putting management incentives in place, response rate, board-level responsibility for climate change, and actions to reduce emissions. In other areas, such as setting emissions reduction targets and external verification of emissions data, respondents in other countries have been more active whereas Canada ranks near the bottom of the list. There are several possible explanations for the ordinal rankings for Canada relative to the other CDP reporting countries and regions. One is the influence on engagement in disclosure by respondents due to the degree of implementation of government-mandated climate policy measures in each country. The countries and regions participating in each year’s CDP are at various stages in crafting or implementing climate change public policies appropriate to their national circumstances. Many of the peer countries and regions have already implemented climate policies that require actions on climate change by the responding companies. It is clear that the respondents from countries 34 with mandatory climate change measures in place are more broadly engaged in climate change actions; European countries stand out in this regard. For example, many companies in European countries are required to participate in emissions trading under the EU-ETS regime. In North America, various legislative initiatives have been launched in the U.S. but as yet no national-scale policy package has been implemented. The Government of Canada has indicated that Canadian policy will closely match the regime implemented by the United States. It is likely that the response rates and overall disclosure trends for respondents in North America will increase once government-mandated climate change policies appropriate for the North American situation are implemented at the national level. Second, the size distribution of the companies in the CDP sample in each country or region has a significant influence on the disclosure results. As noted in Chapter 1 of this report, the largest companies in the Canada 200 sample are typically more engaged in climate change than are the smaller companies. Therefore, for countries with a smaller CDP sample, the overall response rate is likely to be higher than for countries with a larger CDP sample. For instance, there are fewer than 100 companies in the samples of eight of the selected peer countries, compared with Canada’s sample size of 200 companies. (See Table 4.) The fact that the Canada 200 sample includes companies spanning a large range in market capitalization, from C$75 billion to C$500 million, influences Canada’s rankings. Higher levels of disclosure results would be observed if the CDP population size was limited to only the larger companies. The Conference Board of Canada 4 As the climate change disclosure landscape evolves, Canadian publicly traded companies must consider what steps they can take to achieve the emerging business value that disclosure makes possible. This chapter addresses the need for Canadian publicly traded companies to assess their current climate change disclosure practices in light of evolving expectations, norms, and standards. It explores coalescing developments that are driving climate disclosure onto a more meaningful path. The chapter concludes by outlining a disclosure approach that integrates climate performance, strategy, risk, and financial information. The Changing Face of Climate Change Disclosure Provincial and regional GHG reduction initiatives (e.g., Western Climate Initiative), increased attention being paid to clean technology as part of the climate solution, and increasing stakeholder and investor demands for enhanced environmental, social, and governance (ESG) performance are driving the need for climate change disclosure that is meaningful. As a result of these coalescing drivers, the corporate reporting landscape has matured. Today, managers, investors, and other interested stakeholders can better understand how a company’s climate-related performance influences its financial performance, corporate strategy, strategic risks, Climate Change Disclosure Can Do More—and Mean More and management controls. The “new normal” for climate disclosure is to make it more relevant, with information that effectively communicates all aspects of corporate performance. The ultimate goal is to provide a top-to-bottom view of how companies address material climate change issues to manage risk and drive growth and profitability. Accurate and Integrated Climate Change Disclosure Is More Than Good Policy Managers, investors, and stakeholders can now better understand how a company’s climaterelated performance influences its financial performance. Capital markets disclosure is an important way for management to communicate climate change performance to outside investors and other stakeholders. However, simple compliance with disclosure standards and systems is generally regarded as inadequate27 to meet investors’ decision-making needs. Recent developments within domestic and international capital markets show that investors and regulators are increasingly concerned with the nature and comprehensiveness of disclosed information. (See text box “Regulators and Standards Bodies Move on Climate Change Disclosure.) They are also considering the robustness of the controls and systems that ensure the information’s credibility. They are, essentially, looking for disclosure to provide a more complete understanding of climate change performance as it relates to overall corporate strategy, governance, risk management, and financial performance. 27 The 2009 Ontario Securities Commission report on sustainability reporting (see text box “Regulators and Standards Bodies Move on Climate Change Disclosure”) concluded that existing disclosure requirements regarding environmental matters are generally adequate, but that poor compliance with existing disclosure requirements is primarily responsible for inadequate levels of disclosure (pp.14–15). 35 Carbon Disclosure Project 2010 Beyond compliance with regulatory standards and stakeholder expectations, disclosure can help issuing companies focus and sharpen in several areas. Regulators and Standards Bodies Move on Climate Change Disclosure Recent developments have clarified expectations and requirements for climate change disclosure in securities filings: Securities and Exchange Commission (U.S.) Guidance Regarding Disclosure Related to Climate Change (Interpretive Release): Confirms that climate change can be considered to have a significant material effect on company business and operations. Clarifies when companies should consider disclosing information regarding material climate change impacts.1 Ontario Securities Commission (Canada) Corporate Sustainability Reporting Initiative: Identifies deficiencies in corporate compliance with existing requirements for environmental matters, which may include climate change. Recommends that further staff guidance be provided on existing environmental disclosure requirements. The report is due in the fall of 2010.2 ASTM International E2718-10 Standard Guide for Financial Disclosures Attributed to Climate Change: Helps companies identify material financial impacts attributable to climate change that warrant disclosure in their financial statements. Provides guidance on how to determine the appropriate content of such disclosure.3 1. www.sec.gov. 2. www.osc.gov.on.ca. 3. www.astm.org. Beyond compliance with new and emerging regulatory standards and stakeholder expectations, disclosure can help issuing companies: • foster a culture of openness about climate change risks and opportunities; and • attract and retain talent.28 • focus management attention on material climate change risks, assets, and liabilities and how they relate to overall corporate strategy; • drive employee engagement in the management of these risks, assets, and liabilities; • sharpen operational and strategic understanding of emissions drivers, where emissions occur, and where opportunities to reduce emissions exist; • drive continuous improvement in climate change management practices; Focusing the Materiality Lens Connecting climate and financial performance requires companies to understand and apply the concept of materiality. Issuers have the responsibility to determine what information is material and should be disclosed. The developments outlined in the text box “Regulators and Standards Bodies Move on Climate Change Disclosure” seek to clarify the concept of materiality as it applies to climate change, raising the expectation that disclosures should, at minimum, present a fair view of material climate issues. 28 Deloitte contribution to the 2009 CDP Canada Report— “Chapter 7: Preparing for the Future of Climate Change Disclosure.” 36 The Conference Board of Canada Climate Change Disclosure Can Do More—and Mean More There is no strict numerical definition of materiality. Assessing materiality is a two-part process requiring an evaluation of: in a format appropriate to investor decision-making needs. Internally, the following core building blocks must be in place: 1) whether an event is reasonably likely to occur; and • Strategy: Companies must manage material climate change issues as matters of core business strategy, governance, and risk management, not as peripheral issues. 2) whether the event is reasonably likely to have a material effect on the company’s financial condition or operations. Materiality assessments should include both quantitative and qualitative information. It is also important to consider the time horizon over which impacts are anticipated to determine the probability of the impact occurring. Taking It to the Next Level: Understanding Performance From Top to Bottom The disclosure bar has been raised. Moving forward, companies should evaluate whether and to what extent disclosure encompasses material climate change impacts (both actual and prospective/speculative) and how to relate these impacts to their financial, strategic, and operational performance. Historical performance information will need to appear alongside leading indicators (e.g., value drivers and strategy) and analysis to provide investors with a better sense of future cash flows and business potential. An integrated view of corporate climate performance can help investors and other interested stakeholders assess the company’s progress toward a similarly integrated management approach—one that positions it for future success. The effective execution of a broader, integrated approach to climate change disclosure requires companies to present relevant, high-quality information • Systems and processes: Companies must put processes in place to assess and proactively manage financial impacts, risks, and opportunities associated with carbon performance and climate change adaptation. • Data: Companies must establish robust and audit-ready data and information management systems that are supported by internal controls designed to track, capture, and report climate management information. The direction of initiatives such as the International Integrated Reporting Committee,29 the Climate Disclosure Standards Board,30 and Accounting for Sustainability31 suggest that pressure for integrated disclosure (including both climate and broader sustainability issues) will intensify. In addition to the issues that companies face, auditors may find it challenging to assess whether integrated climate-financial disclosures present a fair and balanced view of corporate performance. As disclosure credibility is founded on independent assurance, companies must work with their auditors to adopt relevant, auditproof processes. In the longer term, such evolution is likely as investors, regulators, and other stakeholders push for disclosures that provide a more meaningful and complete picture of the health of the corporation. The Final Analysis Climate change presents potentially material financial impacts for some publicly traded companies. To properly assess risk and opportunity and differentiate companies based on climate change risk and exposure, investors are demanding a wider ESG disclosure lens. Regulators in the U.S. and Canada have confirmed that existing disclosure frameworks do not restrict such disclosure. With the CDP as a platform for initial efforts at climate change disclosure, the next step is to adopt a disclosure model that connects climate change and financial information. This model must help managers and investors understand the full range of implications for future financial growth and profitability. Companies that adopt a “top-to-bottom” approach to disclosure will find that, while challenges remain significant, the opportunities and benefits outweigh them. This chapter was contributed by Deloitte, a sponsor of the CDP 2010 Canada Report. It was written by David Greenall and Maureen Johnson. David is the Practice Leader for Deloitte’s Sustainability & Climate Change group in Ottawa and founder and former coordinator of the CDP Canada initiative. Maureen is a Senior Consultant in Deloitte’s Sustainability & Climate Change Toronto office. The authors can be contacted at dgreenall@deloitte.ca and maurjohnson@deloitte.ca. 29 www.integratedreporting.org. 30 www.cdsb-global.org. 31 www.accountingforsustainability.org. 37 5 Opportunities have outnumbered risks for three years running—a shift from a negative view to a sustained, more positive view among CDP respondents. Closing Observations The five-year trends confirm that an increasing number of investors support the CDP by providing their endorsement of the CDP information request each year. Investors see value in the CDP for a number of reasons. For example, the individual CDP responses provide a valuable body of information that is used to complement their in-house financial analysis, remembering that the CDP information is not subject to the same degree of oversight as financial information. Investors see the CDP as a useful means to encourage good disclosure practices and risk management practices. The CDP is an annual global disclosure initiative that enables investors to benchmark Canadian respondents relative to their international counterparts. The 2010 CDP results provide valuable insights into how Canada’s largest companies are addressing the expected impacts of climate change. Addressing the implications of climate change starts from the top. Most of the 2010 CDP respondents report that corporate governance arrangements now include explicit attention to climate change. This level of engagement demonstrates that respondents are embedding climate change in their strategic and operational plans as well as their management thinking. Incorporating climate change in the company’s corporate strategy further reflects a firm’s forwardlooking commitment to action on 38 climate change. Strategies provide the framework for setting specific targets, such as commitments to achieve specific levels of GHG reduction, or even a carbon-neutral goal, and for setting the future course of action. Target setting follows corporate strategies; close to a third of the 2010 respondents have set targets to be achieved in the near future. Companies with high-carbon impact recognize that targets expose them to a daunting challenge, which will call for significant investment of capital and effort to reduce their emissions. Three respondents with low emission levels have set carbon-neutral goals. The perceptions of how climate change risks and opportunities will affect corporate futures have changed to a well-established perception of more opportunities than risks in the last three CDP Canada 200 reports. The fact that opportunities have outnumbered risks for three years in a row reflects a shift from an earlier negative view on the implications of climate change to a sustained, more positive view among the CDP respondents. The 2010 disclosures reveal that actions by respondents encompass adaptation initiatives to address the physical risks arising from climate change on the company’s operations. Actions in the adaptation category are important to investors since they provide information on how the company will succeed in a climate-changed world. The Conference Board of Canada Closing Observations The responses provided by this year’s 16 Carbon Disclosure Leaders testify to their consistent commitment to getting their companies oriented and equipped to succeed in a more challenging business environment. Their responses provide a good reference point for companies getting started on their climate change plans. The 2010 benchmarking of international disclosure results indicates that Canada’s rankings have not changed significantly since 2009, and they tend to be below those of most peer countries and regions. Notable exceptions are the higher 2010 rankings in three areas: in the percentage of respondents engaging with policy-makers on climate change, in the overall response rate, and in the number of respondents seeing regulatory opportunities. The message from the 2010 guest chapter by Deloitte is that the next step toward achieving meaningful carbon disclosure is an enhanced disclosure model, which integrates climate change and financial information in a way that enables investors to have broad understanding of implications for future financial growth and profitability. The magnitude of change is significant, yet so are the opportunities and benefits. An enhanced disclosure model integrates climate change and financial information, giving investors broad understanding of financial implications. The Conference Board of Canada is pleased to serve as the Canadian CDP partner for the fifth year. The results from the five CDP Canada 200 reports from 2006 to 2010 illustrate how Canada’s largest companies are preparing themselves for success in a carbonconstrained and climate-changed world. We welcome feedback and further discussion on our analysis and reporting. 39 Appendix A Other 2010 Disclosure Results Statistical information of a more detailed nature is provided in this Appendix for reference purposes. • Table A1: Other Disclosure Statistics • Table A2: Emissions Data—Scope 1, Scope 2 Emissions • Table A3: Scope 3 Emissions—Categories • Table A4: Participation in Emissions Trading, or Plans to Participate (n=87) The statistics reported in this table have been obtained from Table 4. Table A1: Other Disclosure Statistics Results for 2010 Canadian Respondents Disclosure Statistic Per cent of responders with management incentives 41 Per cent of responders taking action to reduce emissions 63 Per cent of responders engaging with policy-makers 64 Per cent of responders independently verifying any portion of Scope 1 emissions data 28 Per cent of responders independently verifying any portion of Scope 2 emissions data 21 Source: Table 4: Key Results Snapshot, provided by CDP London. Table A2: Emissions Data—Scope 1, Scope 2 Emissions Emissions Data, by Type of Emissions Scope 1 (n=78) Scope 2 (n=71) Metric Tonnes (CO2eq) Per Cent of Total Emissions 178,476,486 NA 24,275,404 NA Total emissions (Scope 1 and Scope 2) 202,751,890 NA Emissions reported by top 10 emitters 141,784,436 70 per cent Emissions reported by top 20 emitters 181,478,615 90 per cent Source: The Conference Board of Canada. 40 The Conference Board of Canada Appendix A—Other 2010 Disclosure Results Table A3: Scope 3 Emissions—Categories Scope 3 Emissions Features Scope 3 emissions (n=38) Categories of Scope 3 Emissions Number of Respondents Business travel 39 Employee commuting and teleworking 12 Purchased goods and services 11 Transportation and distribution 11 Energy-related activities 4 Leased assets 4 Waste generated 4 Third party Statistics 12,363,849 tonnes CO2eq 3 Other activities 19 Source: The Conference Board of Canada. Table A4: P articipation in Emissions Trading, or Plans to Participate (n=87) Engagement in Emissions Trading Number of Respondents Participating in emissions trading currently 12 Not currently, but anticipate participating within the next two years 15 Don’t participate, nor currently anticipate participating 60 Source: The Conference Board of Canada. 41 Appendix B The 2010 Carbon Disclosure Scores Since 2007, responses submitted by Canada 200 companies have been scored to assess the provided disclosure. This year, the disclosure was assessed using the global CDP Rating Methodology for the first time.32 This appendix provides a brief overview of the intention behind the scoring and how the results can be interpreted. CDP Rating Methodology— Disclosure Scoring The carbon disclosure scores assess companies on the quality and completeness of their disclosures and consider factors including: What Does a CDP Carbon Disclosure Score Represent? The carbon disclosure score is normalized to a 100-point scale. Generally, companies scoring within a particular range suggest levels of commitment to, and experience of, carbon disclosure. Indicative descriptions of these levels are provided below for guidance only; investors should read individual company responses to understand the context for each business. High (>70) A higher score typically indicates one or more of the following: • Strong understanding and management of company-specific exposure to climate-related risks and opportunities • Strategic focus and commitment to understanding the business issues related to climate change, emanating from the top of the organization • Clear consideration of businessspecific risks and potential opportunities related to climate change • Ability to measure and manage the company’s carbon footprint • Good internal data management practices for understanding GHG emissions, including energy use A midrange score typically indicates one or more of the following: It is important to note that the carbon disclosure score is not a metric of a company’s performance in relation to climate change management, because the score does not make any judgment about mitigation actions. A company’s disclosure score is based solely on the information disclosed in the company’s CDP response. The Carbon Disclosure Leadership Index (CDLI) includes the companies with the highest disclosure scores and provides a valuable perspective on the range and quality of responses to CDP’s questionnaire. Canada’s 2010 CDLI includes the 15 top-scoring Canada 200 companies. To qualify for this leadership index, a company must respond to CDP by using the Online Response System prior to the deadline and make its response available for public use. • Regular and relevant disclosure to key corporate stakeholders Midrange (50–70) • Growing maturity in understanding and managing company-specific risks and potential opportunities related to climate change • Good evidence of ability to measure and manage carbon footprint across global operations • Commitment to the importance of transparency Low (<50) A lower score typically indicates one or more of the following: • Relatively new commitment to understanding climate-related issues • Limited ability to disclose known risks or potential opportunities related to climate change • Limited ability to measure and manage the company’s carbon footprint • Possible reluctance to disclose certain requested information due to commercial sensitivity 32 The methodology is available at www.cdproject.net/en-US/ Respond/Documents/Rating_Methodology_2010.xls. 42 The Conference Board of Canada Appendix C Response Data Companies That Answered the Questionnaire Market Capitalization ($ millions)— CDP 2010 (taken June 26, 2009) Market Capitalization Update ($ millions) (taken June 25, 2010) Public or Private CDP 2010 Response Total Reported Emissions (Scope 1 and Scope 1 Scope 2 Scope 2) CO2 Emissions CO2 Emissions (tonnes (tonnes (tonnes CO2eq) CO2eq) CO2eq) CDP 2010 CDP 2010 CDP 2010 Response Status CDP 2010 Response Status CDP 2009 Response Status CDP 2008 Response Status CDP 2007 Response Status CDP 2006 AVN.UN AQ DP NR NR IN Energy 731 AGF Management AGF.B AQ AQ AQ AQ AQ Diversified Financials 729 1,492 Public Agnico-Eagle Mines AEM AQ AQ AQ AQ AQ Materials 9,717 8,915 Public 104,052 86,982 Agrium Inc. AGU AQ NR AQ DP AQ Materials 6,511 10,271 Public 3,202,620 3,202,620 Company Advantage Energy Income Fund Stock Symbol AltaGas Income Trust ALA.UN ARC Energy Trust AET.UN ATCO Ltd. CDLR Leader √ AQ AQ AQ NR Energy 1,237 1,471 Public 1,178,157 1,178,157 AQ AQ AQ NR Energy 4,350 4,718 Public 804,313 443,389 AQ AQ IN Utilities 2,196 2,688 Public 18,174,777 18,174,777 591 752 Public 9,116 8,954 AQ ARZ AQ BMO Financial Group BMO Bank of Nova Scotia (Scotiabank) BNS √ Materials 17,070 √ √ √ √ √ √ √ √ √ 162 √ √ AQ Banks 21,707 27,619 Public 65,506 20,060 45,446 √ √ √ Banks 39,865 46,379 Public 60,853 15,884 44,969 √ √ √ 4,950,944 2,964,563 1,986,381 √ √ √ 119,628 35,088 84,540 AQ AQ AQ AQ Materials 39,020 40,810 Public AQ AQ AQ Telecommunication Services 20,181 22,248 Private Bell Aliant Regional Communications Income Fund BA.UN AQ AQ NR Telecommunication Services 2,990 3,567 Public Boardwalk REIT BEI.UN AQ NR NR NR NR Materials 1,367 1,954 Public Real Estate 3,637 NR Capital Goods 2,954 BPO AQ AQ AQ AQ CAE Late AQ AQ AQ AQ Cameco Corporation CCO Canadian Imperial Bank of Commerce (CIBC) CM AQ AQ AQ AQ AQ Materials AQ AQ AQ AQ AQ Banks Public 2,545 636,295 62,662 573,633 7,698 13,329 Public 459,154 170,465 288,689 20,815 23,807 Public 113,680 35,827 77,853 27,007 Public 4,462,753 4,236,310 226,443 Canadian National Railways CNR AQ AQ AQ AQ AQ Transportation 20,966 CNQ Late AQ AQ AQ AQ IN Energy 26,373 10,162 14,476 Public 11,666,211 11,666,211 6,303 9,569 Public 2,922,771 2,868,232 18,174,777 18,174,777 998,713 908,504 90,209 Canadian Oil Sands Trust COS.UN AQ AQ DP AQ AQ Energy CP AQ AQ AQ AQ AQ Transportation CU AQ NR AQ NR Utilities 5,083 5,506 Public CWB AQ AQ DP AQ Banks 1,170 1,366 Private Public Catalyst Paper CTL AQ AQ AQ AQ Materials CLS Late AQ NR NR DP Commercial & Professional Services Cenovus CVE Centerra Gold CG AQ AQ AQ DP AQ 115 76 2,286 Energy n/a 19,909 Public 4,811,303 3,868,391 942,912 Materials 960 2,536 Public 279,918 223,301 56,617 Private AQ AQ AQ AQ AQ Software & Services 2,871 3,773 AQ DP AQ AQ AQ Health Care Equipment & Services 1,153 1,243 Public ELF AQ AQ NR NR NR Insurance 1,809 1,849 Private AQ AQ AQ AQ AQ Utilities 2,491 2,832 Public AQ AQ SA DP NR Food & Staples Retailing 2,581 3,354 Private EMA √ Scope 3 Source Data Disclosed (CDP 2010) Participate in a Trading Scheme (CDP 2010) Engage With Policy-makers (CDP 2010) √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ n/a GIB.A EMP.A 54,539 1,295 CLC.UN Emera Inc. Use of Third-Party Reporting Protocol (CDP 2010) n/a Canadian Pacific Railway Celestica Inc. Timeline for Achieving Reduction Target (CDP 2010) n/a Canadian Natural Resources Empire Co. √ √ 360,924 AQ AQ E-L Financial √ AQ AQ CML Healthcare Income Fund √ AQ AQ CGI Group √ AQ Brookfield Properties Emissions Reduction Target in Development (CDP 2010) √ √ AQ CAE Inc. Emissions Reduction target in Place (CDP 2010) Publishes Information About Response to Climate Change/GHG Emissions in Places Other Than CDP Response (CDP 2010) √ AQ ABX √ Considers Climate Change to Present Opportunities (CDP 2010) AQ BCE Canadian Utilities Considers Climate Change to Present Risks (CDP 2010) AQ Barrick Gold Canadian Western Bank √ There Is No Individual or Committee With Overall Responsibility for Climate Change (CDP 2010) AQ BCE Inc. √ √ Responsibility for Climate Change Within Company Falls on Other, Lower-Level Departments (CDP 2010) √ AQ ACO.X Responsibility for Climate Change Within Company Falls on Board Committee or Other Executive Body (CDP 2010) Private AQ Aurizon Mines √ GICS Industry Group Absolute Emissions (Scope 1 and Scope 2 combined) Vary Significantly Compared With Previous Year (CDP 2010) √ √ √ 9,848,201 9,608,402 239,799 √ √ √ √ √ √ √ √ √ √ Enbridge Inc. ENB AQ AQ AQ AQ AQ Energy 14,756 18,382 Public 6,307,800 3,372,000 2,935,800 √ √ √ √ √ √ √ √ √ EnCana Corp. ECA AQ AQ AQ AQ AQ Energy 42,743 25,627 Public 5,885,063 5,380,336 504,727 √ √ √ √ √ √ √ √ √ √ ERF.UN AQ AQ AQ AQ IN Energy 3,968 4,287 Public 955,687 700,153 255,534 FTT AQ AQ AQ NR NR Capital Goods 2,429 2,848 Public 29,115 23,770 5,345 First Quantum Minerals FM AQ NR AQ AQ NR Materials 1,211 6,308 Private Franco-Nevada Corp. FNV AQ NR Energy 2,134 3,151 Public GZM.UN AQ AQ Energy 1,759 1,904 Private Enerplus Resources Fund Finning International Gaz Metro L.P. 43 44 AQ AQ AQ The Conference Board of Canada √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 45 44 Carbon Disclosure Project 2010 Appendix C—Response Data Companies That Answered the Questionnaire (cont’d) Response Status CDP 2010 Response Status CDP 2009 Response Status CDP 2008 Response Status CDP 2007 Response Status CDP 2006 GIL Late AQ AQ AQ DP IN Consumer Durables and Apparel G AQ AQ AQ AQ DP Materials AER AQ AQ AQ Harvest Energy Trust HTE.DB.B AQ NR AQ Home Capital Group HCG AQ AQ Husky Energy HSE AQ AQ IN AQ NR Energy Iamgold Corporation IMG AQ AQ AQ AQ NR Materials IESI-BFC LTD. BIN AQ AQ AQ AQ NR Commercial & Professional Services Imperial Oil IMO AQ AQ AQ DP IN Energy Industrial Alliance Ins. & Fin. Svs. IAG AQ AQ AQ AQ NR Inmet Mining IMN AQ AQ AQ AQ Intact Financial Corporation (see ING Group) IFC AQ SA AQ Company Gildan Activewear Goldcorp Inc. Groupe Aeroplan Keyera Facilities Income Fund Stock Symbol CDLR Leader GICS Industry Group Market Capitalization Update ($ millions) (taken June 25, 2010) Public or Private CDP 2010 Response Total Reported Emissions (Scope 1 and Scope 1 Scope 2 Scope 2) CO2 Emissions CO2 Emissions (tonnes (tonnes (tonnes CO2eq) CO2eq) CO2eq) CDP 2010 CDP 2010 CDP 2010 n/a 847,420 547,140 300,280 √ √ √ √ Diversified Financials 1,731 2,172 Public 1,156 238 918 √ √ √ √ 1,651 Public 2,662,796 1,504,353 1,158,443 √ √ 682 1,453 Private 26,220 25,564 Public 8,838,400 7,671,400 1,167,000 2,247 6,090 Public 217,223 217,223 √ √ Private AQ NR Energy IN Diversified Financials 719 1,386 35,227 34,463 Public 10,286,000 9,778,000 508,000 Insurance 1,872 2,592 Public 622 548 74 NR Materials 945 3,579 Public 117,795 52,256 65,539 SA SA Diversified Financials 3,790 4,455 Public 14,521 5,300 9,221 AQ AQ AQ DP NR Energy AQ AQ AQ AQ Materials Laurentian Bank of Canada LB AQ Loblaw Companies L AQ AQ NR AQ AQ Lundin Mining LUN AQ NR AQ Magna International MG.A AQ NR AQ AQ AQ Manitoba Telecom Services MBT AQ AQ AQ AQ Manulife Financial MFC AQ AQ AQ Maple Leaf Foods MFI AQ AQ Methanex Corporation MX AQ AQ MRU.A AQ AQ Banks 1,120 1,610 Public 236,677 1,307 235,370 14,837 13,482 Public 1,056,858 364,183 692,675 975 945 Private 9,659 9,357 Private 580 2,492 Private Automobiles & Components 4,138 5,962 Public 645,050 204,861 440,189 AQ Telecommunication Services 2,326 2,166 Public 17,604 11,985 5,619 AQ AQ Insurance 33,488 33,982 Private AQ AQ AQ Food, Beverage & Tobacco 1,431 1,596 Private AQ AQ AQ Materials 1,261 1,891 Public 2,494,656 2,494,656 AQ DP NR Food & Staples Retailing 3,512 3,770 Private Food & Staples Retailing Materials √ √ NR Banks 7,209 9,090 Public 8,052 3,750 4,302 AQ Energy 11,142 13,188 Public 4,722,700 4,555,000 167,700 √ Open Text OTC AQ NR NR Software & Services 1,669 2,240 Private Pason Systems PSI Energy 1,144 949 Public 8,802 6,877 1,925 √ Energy 2,394 2,942 AQ AQ AQ AQ NR Energy AQ AQ AQ AQ AQ Materials Progress Energy Resources PRQ AQ Research In Motion RIM AQ AQ DP NR NR Technology Hardware & Equipment Ritchie Bros. Auctioneers RBA AQ AQ AQ IN AQ Retailing Rogers Communications RCI.B AQ AQ AQ AQ NR Telecommunication Services Rona Inc. RON AQ AQ AQ DP NR Retailing Royal Bank of Canada Russel Metals Saputo Inc. Energy √ √ √ √ √ √ Participate in a Trading Scheme (CDP 2010) Engage With Policy-makers (CDP 2010) √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 7,821 Public 3,450,938 2,178,151 1,272,787 √ √ √ √ √ √ 33,857 Public 8,888,000 7,459,000 1,429,000 √ √ √ √ √ √ √ 669 2,339 Public 274,151 273,400 751 28,787 41,440 Public 42,306 9,505 32,801 2,754 2,496 Public 22,627 15,515 7,112 23,267 19,366 Public 195,181 44,758 150,423 √ 1,307 1,993 Private √ √ √ AQ AQ AQ AQ AQ Banks 75,038 77,568 Public 211,562 33,482 178,080 √ √ AQ AQ AQ DP NR Capital Goods 1,134 1,058 Public 44,019 29,245 14,774 √ 517,560 259,024 258,536 SAP AQ AQ DP DP IN Food, Beverage & Tobacco 5,701 4,336 Public Late AQ AQ AQ AQ AQ Energy 1,296 2,070 n/a Shoppers Drug Mart SC AQ AQ AQ AQ NR Food & Staples Retailing Silver Wheaton SLW AQ NR NR AQ SNC-Lavalin Group SNC √ AQ AQ AQ NR Stantec Inc. STN √ AQ AQ Sun Life Financial SLF AQ AQ 10,439 9,874 Private Materials 2,012 5,434 Private IN Capital Goods 5,994 8,154 Public 39,457 12,919 26,538 NR Commercial & Professional Services 1,370 1,390 Public 39,463 8,646 30,817 AQ Insurance 15,926 17,050 Private √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ Suncor Energy Inc. SU AQ AQ AQ AQ AQ Energy 22,191 58,039 Public 19,523,758 16,394,417 3,129,341 √ √ √ √ TLM AQ AQ AQ AQ AQ Energy 12,363 19,983 Public 12,509,000 12,195,000 314,000 √ √ √ √ The Conference Board of Canada √ √ Talisman Energy 45 46 √ √ 5,245 RY AQ √ Scope 3 Source Data Disclosed (CDP 2010) √ 26,432 RUS AQ √ Use of Third-Party Reporting Protocol (CDP 2010) Publishes Information About Response to Climate Change/GHG Emissions in Places Other Than CDP Response (CDP 2010) n/a SCL.A ShawCor Ltd. √ √ AQ AQ √ √ √ AQ POT √ √ AQ PWT.UN √ √ AQ √ √ √ AQ Penn West Energy Trust √ √ AQ Potash Corporation of Saskatchewan √ √ AQ Timeline for Achieving Reduction Target (CDP 2010) √ √ √ Emissions Reduction Target in Development (CDP 2010) √ √ √ NR √ √ NA DP √ √ Emissions Reduction target in Place (CDP 2010) √ √ NXY DP √ √ National Bank of Canada NR √ √ Nexen Inc. Late AQ Considers Climate Change to Present Opportunities (CDP 2010) Public AQ PGF.UN Considers Climate Change to Present Risks (CDP 2010) 2,431 K Pengrowth Energy Trust There Is No Individual or Committee With Overall Responsibility for Climate Change (CDP 2010) 30,333 AQ AQ Responsibility for Climate Change Within Company Falls on Other, Lower-Level Departments (CDP 2010) 2,827 KEY.UN √ Responsibility for Climate Change Within Company Falls on Board Committee or Other Executive Body (CDP 2010) 28,009 Kinross Gold Metro Inc. Market Capitalization ($ millions)— CDP 2010 (taken June 26, 2009) Absolute Emissions (Scope 1 and Scope 2 combined) Vary Significantly Compared With Previous Year (CDP 2010) √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ 47 46 Carbon Disclosure Project 2010 Appendix C—Response Data Companies That Answered the Questionnaire (cont’d) Company Teck Resources Stock Symbol T Thomson Reuters TRI Market Capitalization Update ($ millions) (taken June 25, 2010) Public or Private CDP 2010 Response Private Response Status CDP 2010 Response Status CDP 2009 Response Status CDP 2008 Response Status CDP 2007 Response Status CDP 2006 AQ AQ AQ AQ AQ Materials 3,535 22,163 AQ AQ AQ AQ AQ Telecommunication Services 11,807 10,837 Public AQ AQ AQ NR NR Diversified Financials 29,451 28,170 Private TCK.A Telus Corporation TMX Group, Inc. CDLR Leader Market Capitalization ($ millions)— CDP 2010 (taken June 26, 2009) √ GICS Industry Group Total Reported Emissions (Scope 1 and Scope 1 Scope 2 Scope 2) CO2 Emissions CO2 Emissions (tonnes (tonnes (tonnes CO2eq) CO2eq) CO2eq) CDP 2010 CDP 2010 CDP 2010 334,695 78,165 Absolute Emissions (Scope 1 and Scope 2 combined) Vary Significantly Compared With Previous Year (CDP 2010) Responsibility for Climate Change Within Company Falls on Board Committee or Other Executive Body (CDP 2010) 256,530 √ √ Responsibility for Climate Change Within Company Falls on Other, Lower-Level Departments (CDP 2010) There Is No Individual or Committee With Overall Responsibility for Climate Change (CDP 2010) Considers Climate Change to Present Risks (CDP 2010) Considers Climate Change to Present Opportunities (CDP 2010) √ √ √ Emissions Reduction target in Place (CDP 2010) Emissions Reduction Target in Development (CDP 2010) Timeline for Achieving Reduction Target (CDP 2010) √ √ √ √ √ √ √ AQ AQ NR Diversified Financials 1,874 2,462 Public 5,844 521 5,323 AQ DP DP NR Capital Goods 1,486 1,803 Public 46,403 35,151 11,252 Toronto-Dominion Bank TD AQ AQ AQ AQ AQ Banks 46,111 52,971 Public 233,505 46,842 186,663 4,802 5,128 Public 35,742,289 35,560,405 181,884 √ √ √ √ √ √ √ 985 1,050 Public 140,396 63,991 76,405 √ √ √ √ √ √ √ √ TransAlta Corporation TA AQ AQ AQ AQ AQ Utilities TCL.A AQ AQ AQ AQ AQ Media WFT AQ AQ AQ AQ NR Materials 1,361 1,413 Private YLO.UN AQ AQ AQ SA AQ Media 3,567 2,760 Private West Fraser Timber Yellow Pages Income Fund √ √ √ AQ AQ Transcontinental Inc. √ √ X √ √ Scope 3 Source Data Disclosed (CDP 2010) TIH √ √ Use of Third-Party Reporting Protocol (CDP 2010) Toromont Industries √ Engage With Policy-makers (CDP 2010) Publishes Information About Response to Climate Change/GHG Emissions in Places Other Than CDP Response (CDP 2010) √ √ √ Participate in a Trading Scheme (CDP 2010) √ √ √ √ √ √ √ √ √ Legend: AQ—Answered questionnaire Late AQ—Answered questionnaire between July 5, 2010 and August 23, 2010 NR—No response DP—Declined to participate SA—See another IN—Information provided Notes: 1) The market capitalization data provided are from the Report on Business, Globe and Mail. 2) Where CDP respondents reported multiple years of Scope 1 and Scope 2 totals, the totals for the most recent year are reported. 47 48 The Conference Board of Canada 49 48 Appendix C—Response Data Companies That Did Not Answer the Questionnaire Stock Symbol Response Status CDP 2010 Response Status CDP 2009 Response Status CDP 2008 Addax Petroleum AXC NR NR IN Alamos Gold AGI NR Alimentation Couche-Tard ATD.B NR Astral Media ACM.A NR BNB NR BTE.UN NR NR NR NR AQ Company BAM Investments Baytex Energy Trust Biovail Corporation Bombardier Inc. Bonavista Energy Trust Response Status CDP 2007 Response Status CDP 2006 GICS Industry Group Energy Materials AQ AQ AQ DP IN IN NR DP NR SA Market Capitalization ($millions)— CDP 2010 (taken June 26, 2009) Market Capitalization Update ($millions) (taken June 25, 2010) 3,302 845 1,380 Capital Goods 2,715 2,435 Media 1,861 1,778 Diversified Financials Energy 813 805 1,431 3,246 BVF NR NR NR NR NR Pharmaceuticals, Biotechnology & Life Sciences 1,858 2,324 BBD.B IN AQ AQ AQ AQ Capital Goods 6,576 8,717 NR Energy 1,821 2,995 BNP.UN NR AQ AQ AQ BPP.PR.G SA SA SA SA BAM.A NR IN AQ AQ AQ Diversified Financials Brookfield Renewable Power Fund BRC.UN NR Calloway REIT CWT.UN NR NR NR NR NR Real Estate Food, Beverage & Tobacco 1,201 1,328 Real Estate 1,379 1,798 BPO Properties (see Brookfield Properties) Brookfield Asset Management Canada Bread (see Maple Leaf Foods) Real Estate Utilities 679 n/m 10,621 13,399 770 2,011 1,079 1,619 CBY SA SA SA AQ Canadian REIT REF.UN DP AQ AQ AQ AQ Canadian Tire CTC.A NR NR AQ AQ NR Retailing 3,614 4,692 CFP DP NR AQ AQ DP Materials 1,084 1,159 Real Estate 1,058 962 NR Materials 814 934 Canfor Corporation CAP REIT CAR.UN NR CCL Industries CCL.B NR NR CHC Helicopter FLY.A NR NR CIX NR DP CGX.UN NR Cogeco Cable CCA NR Cominar REIT CUF.UN DP Corus Entertainment CJR.B DP DP NR CI Financial Income Fund Cineplex Galaxy Income Fund Crescent Point Energy Trust NR NR DP NR Transportation 2,157 DP IN Diversified Financials 4,241 592 1,033 2,135 1,317 IN IN Media 735 1,060 IN DP Media 1,578 1,198 Energy 3,028 8,269 Real Estate DP 6,406 Media CPG NR DHF.UN DP Diversified Financials 738 901 Daylight Resources (converted into Daylight Energy) DAY NR Energy 705 1,775 Dorel Industries DII.B NR Dundee Wealth Inc. DW NR ELD NR IN DP DP AQ SIF.UN NR NR NR IN NR Davis + Henderson Income Fund Eldorado Gold Energy Savings Income Fund Ensign Energy Services NR NR NR Household & Personal Products 935 1,073 Diversified Financials 857 2,029 Materials 3,554 8,014 Utilities 1,334 ESI NR DP NR NR NR Energy 2,024 Epcor Power L.P. EP.UN NR AQ NR NR AQ Utilities 955 NR Materials 812 Materials 581 1,103 1,373 1,235 Equinox Minerals EQN NR European Goldfields EGU NR Evertz Technologies ET DP DP Capital Goods 2,298 2,891 Fairfax Financial Holdings FFH DP NR DP NR NR Insurance 6,820 8,195 First Capital Realty FCR NR NR NR NR NR Real Estate 1,707 2,080 First Uranium FIU NR DP Materials 999 1,013 FCE.UN DP DP NR IN NR Energy 968 1,392 Fortis Inc. FTS DP DP IN NR NR Utilities 4,160 4,912 Gammon Gold GAM NR George Weston WN NR NR Fort Chicago Energy Partners L.P. Materials DP SA AQ Food & Staples Retailing 810 1,595 7,738 8,638 Gerdau AmeriSteel GNA NR NR SA SA AQ Materials 3,256 3,774 Great West Lifeco GWO DP DP DP DP DP Insurance 19,538 25,403 H&R REIT HR.UN NR NR DP NR NR Real Estate 1,055 2,222 HOC NR NR 931 2,168 Heritage Oil Energy 51 49 Carbon Disclosure Project 2010 Companies That Did Not Answer the Questionnaire (cont’d) Stock Symbol Response Status CDP 2010 Response Status CDP 2009 Response Status CDP 2008 Response Status CDP 2007 IGM NR DP NR DP IPL.UN DP DP NR DP InterOil Corp. IOC NR Ivanhoe Mines IVN NR Company IGM Financial Inter Pipeline Fund 2,750 Energy 602 3,345 Materials 1,236 6,599 1,784 2,285 682 1,399 DP NR Food & Staples Retailing DP Materials 637 740 NR NR Media 1,181 591 Materials 1,224 321 880 1,728 1,513 1,028 NR NR DP 11,138 1,573 DP NR NR NR 9,301 Energy NR PJC.A LGF DP GICS Industry Group DP LIF.UN LNF Diversified Financials Response Status CDP 2006 IN Jean Coutu Group Lions Gate Entertainment Market Capitalization Update ($millions) (taken June 25, 2010) NR Labrador Iron Ore Royalty Leon’s Furniture Market Capitalization ($millions)— CDP 2010 (taken June 26, 2009) Retailing NR Major Drilling Group International. MDI DP MDA Ltd. MDA NR AQ NR AQ AQ Software & Services AQ DP DP NR Health Care Equipment & Services MDS Inc. Morguard REIT Mullen Group Income Fund NAL Oil & Gas Trust MDS NR MRT.UN DP MTL NR Real Estate 676 742 1,029 1,318 NR IN DP NR Transportation Energy 774 1,889 NR NR DP NR Energy 4,084 2,893 863 NAE.UN DP NKO NR North West Co. Fund NWF.UN NR Retailing 781 Northland Power Income Fund NPI.UN NR Energy 723 852 NVA NR Energy 683 1,103 Niko Resources NuVista Energy Oilexco Inc. OIL NR DP DP Onex Corporation OCX NR NR NR Osisko Mining OSK NR Pan American Silver PAA NR Pembina Pipeline Income Fund Petro Canada Petrobank Energy & Resources IN DP DP NR NR NR Energy 3,031 Technology Hardware & Equipment 2,223 2,842 Materials 606 2,845 Materials 1,697 2,634 2,778 PIF.UN DP NR NR AQ AQ Energy 2,053 PCA NR NR AQ AQ AQ Energy 12,948 PBG NR DP NR Energy 1,696 4,794 PEY.UN DP NR NR DP NR Energy 1,049 1,616 Platmin Ltd. PPN NR 881 587 Power Corporation of Canada POW NR IN DP DP NR Diversified Financials 10,231 13,357 16,850 21,934 Peyto Energy Trust Power Financial Materials PWF DP IN DP NR DP Diversified Financials PD.UN NR NR NR DP DP Energy Primaris Retail REIT PMZ.UN DP NR Provident Energy Trust PVE.UN NR NR NR DP DP Energy 1,386 1,872 Quebecor Inc QBR.B NR DP NR NR NR Media 1,263 1,751 Materials 1,770 3,477 Retailing 751 1,014 3,033 4,810 Precision Drilling Trust Red Back Mining Real Estate RBI DP NR Reitmans RET.A DP DP NR DP NR RioCan REIT DP DP NR REI.UN NR DP Seabridge Gold SEA DP DP Sears Canada SCC NR NR Shaw Communications Sherritt International NR NR 2,109 666 1,009 Materials 589 957 Retailing 2,194 2,592 9,811 2,070 926 1,931 1,655 SCL.A NR DP NR NR NR Media S NR NR NR NR AQ Utilities DP DP NR Materials 1,221 Materials 1,225 459 Materials 1,807 4,692 675 Silver Standard Resources SSO DP Silvercorp Metals SVM DP Sino-Forest Corp. TRE NR Sprott Inc. AQ Real Estate 1,613 NR NR SII DP Diversified Financials 645 Storm Exploration SEO DP Energy 618 609 Superior Plus SPB NR Materials 966 1,464 Materials 599 1,720 Media 660 500 Thomspon Creek Metals TCM DP NR Torstar Corporation TS.B DP DP 50 52 NR DP NR The Conference Board of Canada Appendix C—Response Data Companies That Did Not Answer the Questionnaire (cont’d) Market Capitalization ($millions)— CDP 2010 (taken June 26, 2009) Market Capitalization Update ($millions) (taken June 25, 2010) 24,767 Stock Symbol Response Status CDP 2010 Response Status CDP 2009 Response Status CDP 2008 Response Status CDP 2007 Response Status CDP 2006 TransCanada Corporation TRP NR NR AQ AQ AQ Utilities 20,448 Trican Well Service TCW DP NR NR DP NR Energy 999 1,766 Ultra Petroleum UPL NR DP DP DP NR Energy 5,219 7,567 AQ AQ Company Uranium One Vermilion Energy Trust Viterra Inc. WestJet Airlines Westshore Terminals Income Fund Yamana Gold UUU NR NR AQ VET.UN IN IN DP VT IN NR WJA IN IN IN NR WTE.UN NR YRI NR AQ AQ AQ GICS Industry Group Materials NR 841 1,774 Energy 1,769 2,578 Food, Beverages & Tobacco 1,813 3,667 Transportation 1,678 1,789 Energy Materials 740 1,062 6,925 8,801 LEGEND: AQ—Answered Questionnaire NR—No Response DP—Declined to Participate SA—See Another IN—Information Provided Notes: 1) The market capitalization data provided are from the Report on Business, Globe and Mail. 53 51 Acknowledgements We first acknowledge the 2010 respondents for their diligent effort in answering this year’s CDP information request and for this contribution to advancing carbon disclosure. Their responses make up the core information for analysis and reporting of disclosure trends and practices. We appreciate the support provided by the CDP Canada Advisory Board, made up of the major supporter and the 12 sponsors. In addition to their generous financial contributions, the representatives of the sponsoring organizations provide ongoing advice and assistance that is highly valued. We greatly appreciate the contribution made by the CDP Advisory Board and their associates for the scoring of the responses to determine the 2010 Carbon Disclosure Leadership Index. Special thanks are given to Deloitte for its contribution of this year’s insightful guest chapter. We are pleased to acknowledge the helpful comments and suggestions provided by three external reviewers: Quentin Broad, Managing Director, Head of Equity Research, CIBC World Markets, Inc.; Julie Desjardins, Desjardins & Associates; and Alan Willis, Alan Willis & Associates. We thank Judith Whitehead, Kelly Magee and Sue Forsythe for their excellent work on the editing, layout, and publication of this year’s report. The views expressed herein are solely those of The Conference Board of Canada. About The Conference Board of Canada (www.conferenceboard.ca) We are: • The foremost, independent, not-for-profit applied research organization in Canada. • Objective and non-partisan. We do not lobby for specific interests. • Funded exclusively through the fees we charge for services to the private and public sectors. • Experts in running conferences but also at conducting, publishing, and disseminating research; helping people network; developing individual leadership skills; and building organizational capacity. • Specialists in economic trends, as well as organizational performance and public policy issues. • Not a government department or agency, although we are often hired to provide services for all levels of government. • Independent from, but affiliated with, The Conference Board, Inc. of New York, which serves nearly 2,000 companies in 60 nations and has offices in Brussels and Hong Kong. This project was undertaken with the financial support of the Government of Canada provided through the Department of the Environment The Carbon Disclosure Canada 200 Report initiative has been made possible through the generous funding and support of: CDP Contacts Paul Simpson Chief Operating Officer paul.simpson@cdproject.net Sue Howells Head of Global Operations sue.howells@cdproject.net Annika Bruss Administrative Officer, Global Operations Annika.Bruss@cdproject.net Zoe Riddell Head of Investor CDP zoe.riddell@cdproject.net Daniel Turner Head of Disclosure daniel.turner@cdproject.net Carbon Disclosure Project www.cdproject.net info@cdproject.net 40 Bowling Green Lane London EC1R 0NE United Kingdom Tel: + 44 (0) 20 7970 5660 / 5667 Fax: + 44 (0) 20 7691 7316 The Conference Board of Canada Contacts Graham Campbell Associate Director +1 613 526 3090 ext. 250 campbellg@conferenceboard.ca 255 Smyth Road Ottawa, Ontario K1H 8M7 Canada Sarah Dimick Research Associate +1 613 526 3090 ext. 346 dimick@conferenceboard.ca 255 Smyth Road Ottawa, Ontario K1H 8M7 Canada Len Coad Director +1 403 221 3041 coad@conferenceboard.ca 110-12th Avenue SW Calgary, Alberta T2R 0G7 Canada Tim Adamson Enbridge Inc. Kim Brand Scotiabank Greg Wilburn Environment Canada Toni Evans TD Asset Management Inc Anne-Marie Durand NATIONAL Public Relations Inc. Robert Peterman TMX Group, Inc. CDP Canada Advisory Board Jim Johnston BMO Financial Group Brigid Barnett Canada Pension Plan Investment Board Susan Enefer British Columbia Investment Management Corporation Michael Leering Canadian Standards Association Johanne Pichette Caisse de dépôt et placement du Québec David Greenall Deloitte Jennifer Coulson Northwest & Ethical Funds CDP Board of Trustees Chair: Robert Napier The Met Office Jeremy Smith Berkeley Energy Alan Brown Schroders Christoph Schroeder TVM Capital Takejiro Sueyoshi James Cameron Climate Change Capital Tessa Tennant The Ice Organization Carbon Disclosure Project, Registered Charity no. 1122330. A company limited by guarantee registered in England no. 05013650. The contents of this report may be used by anyone providing acknowledgement is given to Carbon Disclosure Project. The information herein has been obtained from sources, which the authors and publishers believe to be reliable, but the authors and publishers do not guarantee its accuracy or completeness. The authors and publishers make no representation or warranty, express or implied, concerning the fairness, accuracy, or completeness of the information and opinions contained herein. All opinions expressed herein are based on the authors’ and publishers’ judgment at the time of this report and are subject to change without notice due to economic, political, industry and firm-specific factors. The authors and publishers and their affiliated companies, or their respective shareholders, directors, officers and/or employees, may have a position in the securities discussed herein. The securities mentioned in this document may not be eligible for sale in some states or countries, nor suitable for all types of investors; their value and the income they produce may fluctuate and/or be adversely affected by exchange rates. © 2010 Carbon Disclosure Project and The Conference Board of Canada.
