More than ever, investors consider a company's carbon emissions track record when making investment decisions. But some companies are better than others at disclosing emissions. In 2002 a group of investors banded together to ask companies to come clean on greenhouse gas emissions. Known as the Carbon Disclosure Project, the group has grown to 475 in 2009 from 35 in 2002 and has a combined asset base of $55 trillion.
Almost half the companies in the Standard & Poor's 500 allowed their responses from the 2008 questionnaire to be made public. The group then created what it calls a Carbon Disclosure Leadership Index that ranks these companies on a scale of 0 to 100, based on the amount of thought, effort, and detail that went into developing climate change strategies and answering the questions. A high ranking does not fully reflect a company's ability to manage climate change, but high-quality disclosure is seen by some investors as a proxy for good management, says Zoe Riddell, head of investor relations at the Carbon Disclosure Project.
The index distinguishes between companies in carbon-intensive sectors such as utilities, oil and gas, and transportation and those that tend to emit less carbon, such as financial services, hospitality, retail, and technology. High-ranking companies in the latter group are listed below. Along with a company's ranking, each slide lists emissions in two categories; Scope 1 refers to direct emissions that may be created, say, through a factory. Scope 2 includes those that arise from purchased electricity, heat, and steam. Both are expressed in thousand metric tons of carbon dioxide emissions equivalents, a standard that allows comparison among different greenhouse gases. Finally, carbon intensity reflects the sum of Scope 1 and 2 emissions divided by a company's annual revenue; a higher number indicates companies that have a higher emissions-to-sales ratio.
Read on to see which companies are the most forthcoming when it comes to disclosing greenhouse gas emissions.