From Apple to Wal-Mart, Companies Make Bets on Climate Change - Bloomberg

From Apple to Wal-Mart, Companies Make Bets on Climate Change - Bloomberg: "CDP grades companies based on how aggressively they are setting and meeting carbon goals, and on how forthcoming they are about this work. CDP started with a pool of about 2,000 companies that shared information about their climate-related work earlier this year. The 187 companies that received an "A" from group this year made the index. They include some of the world’s leading brands — Apple, Bank of America Merrill Lynch, BMW, CVS Health, Google, Northrop Grumman, Samsung, Unilever.

At least part of the strong performance of the CDP carbon index can be attributed to its heavy concentration of tech and financial stocks, sectors that grew faster than average in the last five years. Businesses in those industries have embraced pollution cuts much faster than their counterparts in industries where burning fossil fuels is more central to the core business. The energy sector, for example, "has very few companies" -- five -- "that are able to meet the leadership criteria" laid out by CDP this year, according to the report.

"Energy companies struggle to really put themselves on a path of a low-carbon transition," says Paul Simpson, CDP's chief executive. "Their core business is very carbon-intensive."

The results challenge the still-pervasive assumption that climate-friendly business is automatically bad business. "The A List" study complements a library of research into the benefits to businesses and investors of considering environmental and other sustainability criteria when setting strategy. There's some evidence of a “halo effect” associated with do-gooder companies on low-carbon diets. More likely, the CDP results are a case of already-successful companies taking on climate change, not climate change activities per se categorically pushing stocks higher somehow.

If nothing else, CDP’s new report is a reminder that rational executives atop leading companies are embracing the changes that are already underway in consumer sentiment, regulation and the climate itself."



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