Carbon Disclosure Project 2010

Europe 300

On behalf of 534 investors with assets of US$64 trillion

Report written for the Carbon Disclosure Project by: Report sponsored by: Carbon Disclosure Project
info@cdproject.net
+44 (0) 20 7970 5660
www.cdproject.net
Carbon Disclosure Project
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.
ABRAPP - Associação
Brasileira das Entidades
Fechadas de Previdência
Complementar
Aegon N.V.
Akbank T.A. .
Allianz Global Investors AG
ATP Group
Aviva Investors
AXA Group
Banco Bradesco S.A.
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
2
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
Raiffeisen Schweiz
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

Carbon Disclosure Project 2010
534 financial institutions with assets
of over US$64 trillion were signatories
to the CDP 2010 information request
dated February 1st, 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
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 Crédito del Perú BCP
Banco de Galicia y Buenos Aires S.A.
Banco do Brazil
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
CDP Signatories 2010
Bank Vontobel Climate Change Capital Group Ltd
Bankhaus Schelhammer & Schattera Close Brothers Group plc
Kapitalanlagegesellschaft m.b.H. The Collins Foundation
BANKINTER S.A. Colonial First State Global Asset Management
BankInvest Comite syndical national de retraite Bâtirente
Banque Degroof Commerzbank AG
Barclays Group CommInsure
BBC Pension Trust Ltd Companhia de Seguros Aliança do Brasil
BBVA Compton Foundation, Inc.
Bedfordshire Pension Fund Connecticut Retirement Plans and Trust Funds
Beutel Goodman and Co. Ltd Co-operative Asset Management
BioFinance Administração de Recursos de Co-operative Financial Services (CFS)
Terceiros Ltda
The Co-operators Group Ltd
BlackRock
Corston-Smith Asset Management Sdn. Bhd.
Blue Marble Capital Management Limited
´´ Zrt. Crédit Agricole S.A.
Blue Shield of California Group
Credit Suisse
Blumenthal Foundation
Daegu Bank
BMO Financial Group
Daiwa Securities Group Inc.
BNP Paribas Investment Partners
The Daly Foundation
BNY Mellon
de Pury Pictet Turrettini & Cie S.A.
Boston Common Asset Management, LLC
DekaBank Deutsche Girozentrale
BP Investment Management Limited
Deutsche Asset Management
Brasilprev Seguros e Previdência S/A.
Deutsche Bank AG
British Columbia Investment Management
Corporation (bcIMC) Deutsche Postbank Vermögensmanagement S.A.,
Luxemburg
BT Investment Management
Development Bank of Japan Inc.
The Bullitt Foundation
Development Bank of the Philippines (DBP)
Busan Bank
Dexia Asset Management
CAAT Pension Plan
DnB NOR ASA
Cadiz Holdings Limited
Domini Social Investments LLC
Caisse de dépôt et placement du Québec
Dongbu Insurance Co., Ltd.
Caisse des Dépôts
DWS Investment GmbH
Caixa de Previdência dos Funcionários do Banco
do Nordeste do Brasil (CAPEF) Earth Capital Partners LLP
Caixa Econômica Federal East Sussex Pension Fund
Caixa Geral de Depósitos Ecclesiastical Investment Management
Caja de Ahorros de Valencia, Castellón y Valencia, Economus Instituto de Seguridade Social
BANCAJA The Edward W. Hazen Foundation
Caja Navarra EEA Group Ltd
California Public Employees’ Retirement System Element Investment Managers
California State Teachers’ Retirement System ELETRA - Fundação Celg de Seguros e
California State Treasurer Previdência
Calvert Group Environment Agency Active Pension Fund
Canada Pension Plan Investment Board Epworth Investment Management Ltd
Canadian Friends Service Committee (Quakers) Equilibrium Capital Group
CAPESESP Erste Group Bank AG
Capital Innovations, LLC Essex Investment Management, LLC
CARE Super Pty Ltd Ethos Foundation
Carlson Investment Management Eureko B.V.
Carmignac Gestion Eurizon Capital SGR
Catherine Donnelly Foundation Evangelical Lutheran Church in Canada Pension
Plan for Clergy and Lay Workers
Catholic Super
Evli Bank Plc
Cbus Superannuation Fund
F&C Management Ltd
CCLA Investment Management Ltd
FAELCE - Fundação Coelce de Seguridade Social
Celeste Funds Management Limited
FASERN Fundação Cosern de Previdência
The Central Church Fund of Finland Complementar
Central Finance Board of the Methodist Church Fédéris Gestion d’Actifs
Ceres, Inc. FIDURA Capital Consult GmbH
Cheyne Capital Management (UK) LLP FIM Asset Management Ltd
Christian Super Financière de Champlain
Christopher Reynolds Foundation FIRA. - Banco de Mexico
CI Mutual Funds’ Signature Advisors First Affirmative Financial Network
CIBC First Swedish National Pension Fund (AP1)
Clean Yield Group, Inc. FirstRand Ltd.
ClearBridge Advisors
3
Carbon Disclosure Project
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
4
Hermes Fund Managers
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 Financière 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.
Nissay Asset Management Corporation
NORD/LB Kapitalanlagegesellschaft AG
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
CDP Signatories 2010
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 Previdência
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
Foreword
Connie Hedegaard,
European Commissioner for Climate Action
Climate change constitutes a massive
threat, as the extreme weather events
of mid-2010 have tragically reminded
us. But it also offers a huge opportunity
for those businesses which act to
succeed in mainstreaming low-carbon
solutions to avert dangerous global
warming.
The Carbon Disclosure Project is
helping provide the transparency
that investors and other stakeholders
require to evaluate how companies
are positioned to cope with these risks
and opportunities. It also encourages
companies to take steps towards
managing their carbon emissions. The
project thus provides an important
complement to the EU Emissions
Trading System, since more than 60%
of European companies participating in
CDP are not covered by the EU ETS.
This year’s Europe 300 report shows
that European companies continue to
lead the world in carbon disclosure and
climate change strategy. Compared
to other regions, more than twice
as many European firms had their
emissions data independently verified.
These encouraging trends are, I
firmly believe, due in large part to the
proactive policy approach that the
European Union has taken to tackling
climate change.
The climate and energy goals the EU
is implementing for the medium term
have given us a head start on the road
to building a low-carbon economy. We
will cut our greenhouse gas emissions
to 20% below 1990 levels by 2020,
and are ready to scale up the reduction
to 30% provided the conditions are
right. A decade from now, 20% of the
EU’s energy will come from renewable
sources. We also aim to reduce energy
consumption by 20% of projected
levels.
6
These measures promise ‘greener’
economic growth, new jobs and
greater energy security. It is perhaps
little surprise that a high proportion of
European companies – almost nine
out of ten, according to this report -
see business opportunities in the fight
against climate change.
But Europe cannot afford to rest
on its laurels – on the contrary. The
US, China, Korea and other major
economies are investing heavily in low-
carbon technologies and infrastructure
to counter the economic crisis.
Ensuring Europe maintains its
leadership position and reaps the full
economic benefits of the low-carbon
revolution requires a continued strong
push from the policy side. This is one
reason the European Commission
has put decarbonising the economy
at the heart of our vision for Europe’s
development up to 2020 and beyond.
The EU’s long-term goal is to cut
emissions by 80-95% by 2050. This
process will eventually impact on
companies big and small across all
sectors. Joining the Carbon Disclosure
Project is a way for businesses to
prepare themselves for this transition -
and maximise their chances of profiting
from it.
Insurers and investors at a strategic crossroad
Henri de Castries,
Chairman and CEO, AXA
Climate change, growing energy
demand, resources depletion and
population growth are straining global
economies and ecosystems. Although
the 2009 Copenhagen Summit failed to
provide clear guidelines for businesses,
there is a general consensus that the
cost of inaction outweighs the cost of
action, and that a pro-active approach
to environmental issues is sound risk
management for governments and
businesses alike.
In particular, climate instability can have
a significant impact on the insurance
business through growing risks and
liabilities, evolving investment trends
and changing customer lifestyles,
hence coverage needs. Indeed,
insurers and investors such as AXA
stand at a strategic crossroads and are
key actors in a position to provide both
“adaptation” and “mitigation” solutions
to society. They are in the only
economic sector that has the data and
modelling expertise necessary to help
analyse the risks, across all economic
sectors and regions. They have a
critical role in influencing individual
choices through insurance and can
also make innovation possible.
Last but not least, insurers support the
entire economy through their broad
investment portfolios. Large “universal
owners” such as AXA in effect own
a slice of the world economy - with
both upsides and downsides linked
to long term societal transformations.
Investment strategies can impact these
transformations, as well as reduce
exposure to certain risks.
AXA is committed to making a
difference in these areas. This is
not just “being good”, it is good
management, reflecting an in-depth
analysis of the situation and rising
expectations from employees,
investors, customers and civil society.
Tangible proofs of this commitment
include a range of initiatives such
as “green” insurance products,
responsible investment funds, actions
to reduce our own environmental
footprint, the funding and sharing of
research (notably via the AXA Research
Fund), and contributing to collaborative
initiatives such as the UNEP FI or the
CDP.
AXA has been a CDP partner since
2006, and we have supported the
publication and presentation of the
French (2006-2008) and European
(2009) survey results. This year again,
AXA is proud to support the Europe
300 report, highlighting where risks
and opportunities lie to help investors
to better navigate the path towards a
low-carbon economy.
7
CA Cheuvreux and the Carbon Disclosure Project
Jean-Claude Bassien,
Chairman and CEO, Crédit Agricole Cheuvreux
Writing the CDP Europe 300 report
for the second year in a row means
several things to CA Cheuvreux.
Firstly, it means we must not allow
ourselves to be distracted by the loss
of momentum on climate change
policies and by reduced media
coverage over the past year. It also
means that the Carbon Disclosure
Project (CDP) initiative now has an
even greater role to play, in order
to partly make up for the lack of
regulatory pressure. It means we
must cast an even stronger light on
companies’ responses to climate
change, so that investors can assess
and reward their performance at a time
when the media is less focussed on
this issue, and the excitement leading
up to the Copenhagen Summit has
faded. Last but not least, it means
the lack of visibility and the increasing
uncertainty surrounding climate
change policies heighten the risks and
opportunities involved in investing in
European companies.
The CDP is no ordinary initiative. In
our view, it is equally important as
the International Panel on Climate
Change (IPCC) and the Stern Review
on the Economics of Climate Change
as it represents the business sector’s
response to both scientific knowledge
about climate change, and the resulting
threat to the economy. It paves the way
for a low-carbon economy and gives
investors and other stakeholders the
tools to assess whether or not we are
on track to meet this challenge.
8
Nor is CA Cheuvreux an ordinary
brokerage and research house. It
is the most “European” in its nature
and outlook, with presence in all
major European financial centres and
a coverage of 700 listed European
companies. CA Cheuvreux was the
first broker worldwide (and is still
the only one to date) to become a
signatory to the UN-backed Principles
for Responsible Investment, in 2008.
Climate change is an integral part of
our research and investment services,
as we have recognised that financial
indicators should be supplemented
with carbon-related equivalents (and of
course other environmental, social and
governance criteria) in order to capture
the complexity of market risk and
opportunities.
We therefore take it as our
responsibility to work alongside the
initiatives with the greatest legitimacy,
such as the Carbon Disclosure Project,
in order to raise the standards and
improve the accuracy and pertinence
of climate change-related information
provided by companies. I hope this
report will benefit the investment
community, as well as the 300
companies under review, as they
pursue their strategies to achieve share
performance in a low-carbon economy.
 Executive Summary
Introduction
2009 marked a trough in the economic
crisis in Europe. Uncertainties persist
both on the economic recovery and
the future of climate change policies,
as the Copenhagen Summit failed to
provide certainty on any post-Kyoto
international framework for regulating
greenhouse gas emissions.
Despite this, European companies
continue to respond to investor
requests (through the CDP
questionnaire) with increased
disclosure on climate change-related
risks and opportunities. The response
rate for the Europe 300 report is at its
highest: 84%.
It is interesting to analyse the evolution
of the Europe 300 index, which
represents the 300 largest European
companies by market capitalisation.
The market capitalisation of wind and
solar companies has not proved any
more resilient than other companies in
traditional sectors. As a result the wind
turbines manufacturer Gamesa and
solar energy companies Q-Cells and
REC have left the Europe 300 sample
in 2010.
However, renewable energies remain
well presented in the sample:
• EDP Renováveis and Iberdrola
Renovables – the renewable energy
subsidiaries of electricity utilities
companies EDP and Iberdrola –
have entered the ranks of the
largest 300 European companies
by capitalisation.
• In addition, large industrial
companies, such as Siemens,
Alstom or Saint-Gobain, also have
developed renewable energy
technologies in their product
portfolios. Siemens indicates that
the revenues of its Renewable
Energy Division grew by 39% in
2009.
This is an important indicator that
some of the largest European
companies have built significant
capacities in low-carbon technologies
and have been seizing opportunities
to participate in the transition to a low-
carbon economy.
2010 Highlights
There are several positive highlights
from this year’s report:
• The Europe 300 index maintained
its place as the leader in terms
of disclosure, with 84% of
companies responding to the
CDP questionnaire (versus 70%
for the US S&P 500 and 41% for
the Japan 500). This is up 2%
from 2009 and even reaches 86%
after restating the sample from
companies acquired during the year
(e.g. the Cadbury take-over by Kraft
Foods).
• Disclosure of Scope 1 and Scope
2 emissions improved respectively
to 92% and 91% of companies.
Around 50% of companies
independently verify more than
80% of their Scope 1 and Scope
2 emissions data. The Europe 300
index also demonstrates by far the
highest assurance level compared
to other geographies. This should
help investors to use emissions
data with increased confidence,
although there is still room for
improvement.
• Direct carbon emissions fell sharply
in 2009 (by 7%), largely as a result
of the economic crisis. By way of
comparison, EU-27 GHG emissions
dropped by 17.3% in 2009. It
is certainly interesting to note
that most of the largest emitters
managed to improve their carbon-
intensity (relative to production
volumes) in this tough economic
environment (see the Materials and
Utilities sector specific analysis).
9
Executive Summary
• Apart from the Health Care sector,
at least 83% of companies in every
sector see regulatory opportunities
emerging from climate change
policies. This rate hits 100% for
the IT, Telecommunication Services
and Utilities sectors. This positive
outlook is often correlated to
market opportunities for companies
selling products and services that
help clients to reduce their own
emissions (71% of companies).
• For instance, new generations of
products developed by capital
goods companies are 12% to 50%
more energy-efficient, and have
applications in the transportation,
building, power and industry
markets.
However, there remain areas of
concern that need to be addressed:
Reduction targets and investments
fall short
• 79% of responding companies have
set an emission reduction target,
but the majority will expire by 2012.
• Companies reported just €31bn
in anticipated investments for
alternative energy and energy
efficiency projects. This figure
is significantly lower than the
equivalent in 2009 of ca. €100bn.
This investment gap is largely
attributable to companies which no
longer disclose, or to companies
which are no longer in the Europe
300 index, rather than to lower
ambitions.
• Overall, the aggregation of all
reported targets show that the
Europe 300 companies could
deliver an average emissions
reduction of just 1.5% per annum if
they achieve their targets.
10
• It is not possible to achieve a true
comparison between targets set
by the Europe 300 companies
and EU-wide GHG reduction
targets because the Europe 300
index does not fully capture many
areas of the economy, which are
considerable sources of GHG
emissions, such as buildings,
transportation and agriculture.
• The scope of direct emissions of
the Europe 300 index is closer in
scope to the EU Emissions Trading
System (EU ETS) because of its
constituents. Disclosed carbon
reduction commitments within the
Europe 300 companies appear too
low to reach the EU ETS cap set
for 2020. The targets of Europe
300 utilities, materials and energy
companies aggregated at sector
level will deliver an average annual
cut in emission intensity of 2.1%,
0.8% and 0.4% respectively.
These cuts fall short of the planned
decrease in the absolute emission
cap under the EU ETS: 1.9% each
year on average over 2013-2020,
and up to 4.1% if the EU should
decide to embrace the 30% EU-
wide GHG reduction target.
Scope 3 emissions remain the
weakest part of the picture
• Although 74% of respondents
disclose at least one source of
Scope 3 emissions, these are not
always the most material from a
risk perspective. For instance, ca.
70% disclose carbon emissions
due to business travel while only
20% (11% less than last year)
provide an estimate of the
emissions related to the use of their
products and services at the use or
disposal phase.
• Financials still disclose widely on
business travel but fail to provide
quantitative information on the
carbon risks lying in their clients’
portfolios, which can certainly be of
higher interest for investors.
• The lack of a harmonised
methodology for calculating Scope
3 emissions also continues to
hamper intra sector comparisons,
such as in the Oil & Gas sector, for
instance.
Conclusion
From a market opportunity
perspective, businesses generally
call for a clear and stable regulatory
framework providing long-term visibility,
which policymakers failed to deliver at
Copenhagen.
More than ever, at a time when budget
constraints challenge the ambitions
of EU Member States to support
the development of low-carbon
technologies and services, further
collaboration and understanding
between economic players and
policymakers is absolutely essential
if the right signals are to be sent to
allow more investments in low-carbon
technologies.
This ranges from the final decision
expected on CO2 efficiency
benchmarks, which will set the carbon
allocations post-2012 in the EU
carbon market, to the implementation
of additional supporting policies to
foster investments in costly low-
carbon technologies (e.g. a floor price
for carbon, a harmonised regulatory
framework for Carbon Capture and
Storage, higher visibility on post-2020
EU climate ambitions).
Scoring Highlights
Scores are generally higher than last
year (average disclosure score is 68
versus 60 in 2009). This is partly due to
changes in the scoring methodology,
but some companies have made
impressive improvements. Deutsche
Post, Nestlé and Telefonica have
increased their score by more than
30 points compared to last year’s
results and are ranked in the Carbon
Disclosure Leadership Index (CDLI) of
the Europe 300.
• The Utilities sector continues to
• A performance score, which
recognises and rewards the
integration of climate change issues
into the business strategy and
the evidence of forward action,
complements disclosure scores this
year. Most of the time, disclosure
leaders are also performance
leaders, with a few exceptions
(Saint-Gobain, UPM Kymmene,
SCA, Rio Tinto, Centrica, EDP)
where perhaps the ambition to
integrate policy has not quite
matched the actual evidence of
forward action.
• Siemens achieved the highest
disclosure score of the index (98)
and took the CDLI crown from
Bayer. Siemens notably stands out
by having defined an Environmental
Portfolio since 2008, which now
comprises 30% of Siemens’ entire
portfolio (25% in 2008) and whose
products and solutions installed in
2009 are cutting customers’ annual
CO2 emissions by some 50mt CO2
emissions (+47% versus 2008).1
outperform on average in terms of
disclosure, whereas the Financials
sector underperforms both in
disclosure and in performance
aspects. Every sector is
represented in the CDLI.

Table 1: Companies with the highest CDLI and CPLI scores

Sector CDLI (Score) CPLI (Band A)

Consumer Discretionary Philips Electronics (94), Philips Electronics, Renault, BMW,

Renault (93) Kingfisher

Consumer Staples Reckitt Benckiser (93), Reckitt Benckiser, Tesco, Nestlé

Tesco (92), Nestlé (92)

Energy Royal Dutch Shell (89) Royal Dutch Shell, Eni, Repsol YPF

Financials Royal Bank of Scotland (93), Royal Bank of Scotland, HSBC,

HSBC (92) Barclays, Munich Re, Swiss Re, UBS

Health Care Novo Nordisk (89) Novo Nordisk

Industrials Siemens (98), Deutsche Post (97), Siemens, Deutsche Post,

Ferrovial (89), Ferrovial, Rolls-Royce
Saint-Gobain (89)

Information Technology Nokia (91) Nokia

Materials BASF (96), Bayer (95), BASF, Bayer, Lafarge

Lafarge (94),
UPM-Kymmene (90), SCA (90),
Rio Tinto (89)

Telecommunication Services Telefonica (89) Telefonica, BT Group, Deutsche

BT Group (89) Telekom, Royal KPN
1 Please note that, for the purposes of this report,
Utilities Centrica (92) Scottish & Southern Energy, E.ON, mtCO2e = 1 000 000 metric tonnes CO2.
Scottish & Southern Energy (90) Iberdrola, National Grid Emissions figures have been rounded. For unrounded
figures please see company responses at
EDP (90) www.cdproject.net.
11
Executive Summary

Figure 1: Disclosure level

Europe 300 sample 300 100%

Responding companies 253 84%

Disclosing Scope 2 emissions 230 77% Disclosing Scope 1 emissions 233 78%

Having emissions reduction target 200 67%

Disclosing any Scope 3 emissions 187 62%
Any portion of Scope 1 emissions independently verified 172 57%

Disclosing Scope 3 related to use/disposal of products 51 17%

12
 Contents

CDP Signatories 2

Foreword: 6
Connie Hedegaard, European Commissioner for Climate Action

Commentary: 7
Henri de Castries, Chairman and CEO, AXA

Commentary: 8
Jean-Claude Bassien, Chairman and CEO, CA Cheuvreux

Executive summary 9

1. Overview of CDP 14

2. Overview of the Europe 300 16

3. Political Context 18

4. The 2010 Carbon Disclosure Scores 25

5. The 2010 Carbon Performance Scores 29

6. Analysis by Sector 33

7. Sector Specific Analysis 39

Consumer Discretionary 39

Consumer Staples 41

Energy 43

Financials 47

Health Care 49

Industrials 50

Information Technology 52

Materials 53

Telecommunication Services 57

Utilities 59

Appendix 1: Table of emissions, scores and sector information by company 62

Appendix 2: Composition of GICS sectors at three different segmentation levels 69

13
 1 Overview of CDP
The Carbon Disclosure Project
(CDP) is an independent not-for-
profit organisation 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 organisations in
some 60 countries around the
world measured and disclosed their
greenhouse gas emissions and climate
change strategies through CDP, in
order to set reduction targets and
make performance improvements.
In 2010, even more companies than
ever before are reporting through CDP
and managing their emissions. This
data is made available for use by a
wide audience including institutional
investors, corporations, policymakers
and their advisors, public sector
organisations, government bodies,
academics and the public.
Climate change is not a problem that
exists within national boundaries.
This is why CDP harmonises climate
change data from organisations 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
organisations, such as Dell, EADS,
PepsiCo and Walmart.
14
Message from Paul
Dickinson, Executive
Chairman, CDP
Carbon management continues
to rise as a strategic priority for
many businesses. This is fuelled by
opportunities to reduce energy costs;
secure energy supply; protect the
business from climate change risk
and damaged reputation; as well as
generating revenue and remaining
competitive. Companies globally
are seizing commercial carbon
opportunities, often acting ahead of
any policy requirements.
The demand for primary corporate
climate change data is growing – 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 the
global industry and to highlight the
associated opportunities. CDP has
also launched two index products
based on CDP data – the FTSE CDP
Carbon Strategy Index series and the
Markit Carbon Disclosure Leadership
Index. These products give investors
exposure to companies better
positioned in the transition to a low
carbon economy.
Key focus areas
CDP has set three key focus areas for
the immediate future. One is to work
with companies and the users of its
data to continue improving quality
and comparability. Data that supports
action is central to fulfilling CDP’s
mission. As part of this process, CDP
is 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 requires a global
solution. That is why CDP’s second
key focus is on globalising all programs
in the major economies in the coming
years. Beyond CDP’s Investor
program, which sits at the heart of
the initiative, CDP intends to grow its
Supply Chain and Public Procurement
programs, as well as CDP Water
Disclosure, in order to maximise the
fulfilment of CDP’s mission.
The third key focus is mitigation and
emissions reduction. The number of
companies within the Global 500 index
(FTSE Global Equity Series) reporting
reduction targets has already increased
fourfold since CDP’s first reporting
year. But this is just the first step. CDP
remains committed to help advance
emissions reductions and works with
investors and industry to achieve this.
Looking ahead
It is through partnerships that we
can achieve the largest impact.
CDP is delighted to be working
with the Europe 300 report sponsor
AXA; the Europe 300 report writer
CA Cheuvreux; its global advisor
PricewaterhouseCoopers; its global
sponsor Bank of America; its local
partners; as well as Accenture,
Microsoft and SAP to accelerate
its mission and highlight the huge
opportunities for business to capitalise
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 telepresence
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.
Table 2: Global Key Trends Summary – 2010
This table outlines some of the key findings from CDP 2010 by geography or industry data-set.

% of responders taking actions to reduce

company’s response to climate change in

% of responders engaging policymakers

% of responders independently verifying

% of responders independently verifying

% of responders seeing regulatory risks
executive level responsibility for climate

mainstream annual filings / CSR reports

products and services help third parties

any portion of Scope 1 emissions data

any portion of Scope 2 emissions data

% of responders indicating that their
% of responders with Board or other

% of responders with management

% of responders seeing regulatory

% of sample answering CDP 20103

% of responders with emissions

on climate issues to encourage

% of responders reporting the

to avoid GHG emissions

mitigation or adaptation
reduction targets

opportunities
incentives

emissions
change

Sample: geography /
number of companies

Asia ex-JICK 1354 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

Turkey 50 24 75 87 37 62 0 88 72 37 50 25 25

UK FTSE 600 51 96 49 61 73 48 68 74 59 87 41 39

US S&P 500 70 67 48 53 77 53 50 61 63 80 35 29

1 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 14 July 2010. They may
therefore differ from numbers in the rest of the report which are based on the number of companies which responded by the applicable local deadline (e.g. 30 June 2010).
2 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.
3 Includes offline responses to the CDP 2010 questionnaire and indirect answers submitted by parent companies. All other key trend indicators are based on direct and online company responses only.
4 Asia excluding Japan, India, China and Korea (ex-JICK).
15
 2 Overview of the
Europe 300

Figure 2: Country origin of Figure 3: Breakdown of the The Europe 300 sample is based on
companies in the Europe 300 index the FTSEurofirst 300 index, which
Europe 300 by GICS sector contains the 300 largest publicly listed
companies by market capitalisation in
15 8 Europe.
47
60 15
72 The 233 companies in the Europe 300
17 sample who disclosed their direct on-
11 site emissions (Scope 1) report 1.96bn
tonnes of CO2 equivalent (tCO2-e) of
14
24 greenhouse gas (GHG) emissions. This
is equivalent to ca. 40% of the GHG
15 emissions of the 27 European Member
54
States (EU-27) in 2008. However, many
19 29 49 European companies have worldwide
operations and emit GHG emissions
22
beyond the borders of Europe. Only
34
31 50% of the sample’s direct emissions
24 40 are clearly reported in European
countries. European companies emit
United Kingdom 60 Financials 72 almost 300 mtCO2-eq on the American
France 54 Industrials 49 Continent.
Germany 34 Consumer Discretionary 40
Switzerland 24 Materials 31 Beyond on-site direct emissions,
Spain 22 Consumer Staples 29 companies report on their indirect
Italy 19 Utilities 24 emissions related to the purchase of
Sweden 15 Telecommunication Services 17 secondary energy (Scope 2, such as
Netherlands 14 Energy 15 electricity and heat) and to external
Belgium 11 Health Care 15 boundaries (Scope 3 categories, such
Other* 47 IT 8 as employee travel, carbon content
*Austria, Norway, Portugal, Greece, Denmark, of goods purchased and emissions
Finland, Ireland, Luxembourg, related to the use of products/
other non-European services).The total direct and indirect
emissions reported by the companies
in the Europe 300 sample amounts to
7.7bn tCO2-eq or ca. 15% of global
GHG emissions. There is naturally
some double counting in this figure
since the indirect emissions reported
by one company (e.g. related to the
purchase of electricity) can be the
direct emissions of another company
(e.g. a utility company).

16
Figure 4: Location of direct emissions of the Europe 300

EU-27 (+Switzerland and Norway)

North America

Latin America

Africa

Southern & Eastern Europe

Asia

Oceania

Middle East

Not identified

0 200 400 600 800 1000

GHG Emissions (mtCO2e)

17
 3 Political Context
EU Targets
The economic downturn in 2009 has
led to substantial reductions in GHG
emissions in Europe, which will clearly
help the European Union meet its
international commitment under the
Kyoto Protocol, as well as its 2020
climate ambitions.
Indeed, EU-27 GHG emissions in
2009 are estimated by the European
Environment Agency to be 17.3%
below 1990 levels, while the EU has
committed to reducing emissions by
8% over 2008-2012 under the Kyoto
Protocol and by at least 20% by 2020
(unilateral commitment).
Based on these figures, the EU
looks on track to meet its targets,
which are no longer seen as posing
a challenge. In this context, and
despite the disappointing outcome
of the international talks on climate
change at Copenhagen, the European
Commission continues to push the
idea of Europe possibly revising
its carbon emissions reduction
commitment from 20% to 30% by
2020.
A draft discussion document was
published in 2010 to debate this
opportunity. This draft notably contains
the estimate that a switch to a 30%
reduction target would raise costs by
€33 billion per annum. However, the
initial cost of cutting emissions by 20%
has also been revised down to €47
billion after factoring in the economic
crisis. This is compared to the previous
figure of over €70 billion p.a. in 2020.
An assessment indicates that if the
EU switches to a 30% target, the
risk to production volumes is highest
in chemicals activities, but remains
generally less than 1%. One idea is to
implement an EU-harmonised carbon
tax based on the carbon content of
fossil fuels in order to create a carbon
price signal for sectors not included
under the EU Emissions Trading
System (i.e. higher prices of fossil
fuels).
18
Implications from the economic
crisis
In these economic times, Member
States are having to deal with
budget constraints and seem to be
adopting a more cautious stance with
regards to the costs associated with
policies supporting carbon reduction
commitments and the development of
renewable energies. The discussion
over a potential switch to 30% has
been postponed until after the UN
international climate meeting in Cancun
in December 2010.
Spain, Germany and France have all
reviewed their supporting policies for
solar energy by lowering guaranteed
feed-in tariffs and applying annual caps
to the development of solar capacities.
The economic crisis also had the effect
of reducing electricity consumption.
This automatically reduces the
forecasts of additional renewable
energy capacities needed to comply
with EU targets, as the latter are
defined as a percentage of total energy
consumption.
EU Carbon Market
With regard to the EU carbon market,
the carbon price has remained fairly
stable since the 2009 edition of the
CDP Europe 300 report, trading in
a range of €12 to €16/tCO2. The
stability of the carbon price is mainly
due to the sharp drop in production
volumes in sectors regulated under the
carbon market, which has left millions
of surpluses of emission rights in the
hands of cement and steel producers.
The European Commission believes
that a higher carbon price of
around €30/t would be necessary
to incentivise further investments in
low-carbon technologies. In order to
safeguard the price of carbon, the
European Commission has notably
been firm in its position not to yield to
the claims of several Eastern European
countries to obtain extra free CO2
rights for their industries.
The European Commission has also
made progress on the new rules
applying to the EU ETS over 2013-
2020. The official list of sectors
deemed significantly exposed to the
risk of carbon leakage, due to extra
CO2 costs arising from the EU ETS,
was published in late 2009. Most of the
industries (apart from brick production)
are in this list and are therefore eligible
to receive 100% free CO2 rights until
2020, up to a sector carbon efficiency
benchmark. The calculation is based
on the 10% most efficient installations
of a sector.
The Working Groups in charge of
designing these sector benchmarks
have made progress in 2009/2010,
although discussions are still ongoing
and nothing has been officially
set so far. The final decisions on
these benchmarks are expected by
December 2010.
Another challenge of the post-2012
carbon market is the creation of a
primary market for emission rights
through the organisation of auctions.
One of the fears raised by some CDP
respondents regarding these auctions
is that non-regulated players could play
the system by manipulating the price of
carbon.
http://eur-lex.europa.eu/LexUriServ/LexUriServ.
do?uri=COM:2010:0265:FIN:FR:PDF
Comparison with indices from Management and strategy
other global geographies European companies report
At a time when one of the EU’s encouraging signals that risks and
ambitions is to lead the way in opportunities related to climate change
terms of a low-carbon economy, are well-identified and that companies
it is encouraging that European have taken steps to adapt their
companies, as a whole, appear to be strategies to face this challenge. Only
at the forefront of carbon disclosure Japanese companies can compare to
and climate change strategy design, European companies when it comes
when compared to other key global to placing responsibility for climate
geographies. As highlighted in the change at the Board/Executive level,
chart below, the Europe 300 index and implementing both management
ranks first in many aspects of the incentives linked to addressing climate
questionnaire. change-related issues and emission
reduction targets.
Disclosure and reporting
The response rate to CDP in the Europe A high share of European companies
300 is at its highest. It has increased to (87%) see business opportunities
84% in the Europe 300 index (versus derived from climate change
82% last year). The Europe 300 index regulations. This is higher than US
has also maintained its place as leader companies (61%), but comparable with
in terms of disclosure, compared top Japanese (81%) and Emerging
with other geographies, with the US Markets (84%) companies. This
(S&P 500 index) and Brazil (top 80 figure is even as high as 90% for
companies by market capitalisation) India 200 companies. In the case of
following with 69% and 72% response companies in emerging markets, this
rates, respectively. Disclosure rates in high rate might be attributable to their
China, India and Eastern Europe remain opportunity to earn carbon credits
low (<21%). Another key aspect of under Kyoto flexible mechanisms,
differentiation is that more than two- whereas the enthusiasm of Japanese
thirds of European companies have and European companies may instead
their emissions data (Scope 1) verified be tied to their perception of growing
externally (this figure is stable compared market opportunities for some of the
to 2009 results). In the Japan, US and products or services they sell. Indeed,
the Emerging Market indices, no more 73% and 71% respectively of Japan
than 39% of companies have their 500 and Europe 300 respondents
emissions verified. consider that they have products or
services in their portfolios that help
third parties to avoid or reduce GHG
emissions.

Figure 5: Europe 300 outperforms in many aspects of climate change awareness

100
Emerging Markets 800
Emerging Markets 800

US S&P 500
Europe 300
US S&P 500
80
Japan 500

Europe 300

60 Japan 500

40

20
Response rate

board/executive level
climate change at
Responsibility for

incentives
Management

targets
Emission reduction

helping to cut emissions

Products/services

regulatory risks
Perception of

(Scope 1)
of emissions data
External verification
emissions
Actions to reduce

19
Political Context
Analysis of corporate
emission reduction targets
versus EU targets
Absolute and intensity targets
191 companies (75%) have defined at
least one numeric emission reduction
target. Some companies have several
targets applying to different business
units or with different time horizons.
43% of targets include absolute
emissions reductions, while 37%
are intensity targets (e.g. relative to
production volumes). However, apart
from the Financials, Telecommunication
Services and IT sectors, intensity
targets prevail in other sectors (e.g.
67% of targets in the Materials sector).
Time horizons
63% of companies have a reduction
target within the next six years. These
are predominantly companies from the
Industrials, Utilities, Financials, Material
and Consumer Staples sectors. Short-
term targets are frequent. These are
driven by regulatory visibility, which
allows companies to include emission
reduction targets into their strategic
plans. Against the backdrop of
uncertainty beyond 2020 and the long-
term investment forecast constraint,
E.ON, for instance, recognises that its
largest possible source of risk arising
from climate change is the political
uncertainty surrounding future carbon
emission reduction policies. Fewer than
one-quarter of all the targets defined
by companies target a time horizon
after 2015.
The Europe 300 aggregate
reduction target
All company reduction targets applying
to Scope 1 and Scope 2 emissions
have been aggregated in order to get
an indication of the carbon reductions
these will deliver in the Europe 300
index, both as a whole and by sector.
20
The resulting figures are generally lower
than last year. This is mainly due to two
key factors:
• Some companies achieved their
targets in 2009 (sometimes ahead
of schedule and/or helped by lower
production volumes) and have not
set new targets. This is notably the
case for companies in the Materials
sector.
• In order to adapt to a changing
reality, some methodological
changes to this edition of the
Europe 300 report have been
made. In 2010, the reduction
targets have been calculated by
assessing (when possible) the
efforts that have yet to be delivered
by the company to achieve its
target (i.e. based on companies’
most recent emissions rather than
their emissions for the base year).
Figure 6: Percentage of target reduction plan set by companies
by timescale
2009-2012
2013-2015
2015-2020
2021-2050 2%
0 10
Table 3: The Europe 300 aggregate reduction targets
Utilities
Materials
Energy
Industrials (Transportation industry only)
Sub-total for biggest emitting sectors
Other sectors
Europe 300 index
Among utilities companies, three large
companies in the power generation
business do not communicate
reduction targets on a group level. At
the sector level, this offsets the high
ambitions of other companies (EDP:
average 9% reduction in CO2 intensity
annually out to 2020). In the Materials
sector, chemicals companies generally
tend to have higher reduction targets
than cement and metals & mining
companies, apart from a few notable
exceptions (e.g. Norsk Hydro: 4.8%
annualised reduction target for specific
emissions per tonne of aluminium).
The Energy sector guides for an
annualised reduction effort of 1.8%,
but the figure is mostly determined
by ENI’s and Total’s targets to cut
gas flaring at oil fields in emerging
countries. All companies involved in
transportation businesses (Airlines,
Marine, Air Freight) expect to cut the
carbon-intensity of their operations by
over 2% annually.
54%
22%
22%
20 30 40 50 60
Implicit average annual Weigh in the index (in % of
reduction target total emissions in 2009)
-2.1% 43%
-0.8% 32%
-1.8% 15%
-2.1% 3%
-1.6% 94%
6%
-1.5% 100%
Emission reduction plans backed
by capex plans
These emission reduction targets are
backed by capital expenditure plans in
alternative energy and energy efficient
projects. Europe 300 companies plan
to invest more than €31 billion in the
years to come, which should ultimately
deliver emission reductions of ca. 61mt
of CO2-equivalent per annum.
The €31 billion figure is well below
the ca. €100 billion in investments
disclosed in the previous edition of
the Europe 300 report, but this gap
is mostly attributable to companies
no longer disclosing their future
investments or having left the index,
rather than to a general lower
commitment to invest in low-carbon
projects.
Companies have disclosed more
information on future investments (€31
billion) than on projects already carried
out (€10.8 billion). In addition, it seems
that companies will invest in energy/
resource efficiency projects to a much
greater extent than in the past (€15
billion anticipated versus €4 billion
achieved).
Figure 7: Total Investments
achieved and anticipated
by type
35000
30000
25000
20000
-120
15000
-150
10000
5000
Energy and Resource Efficiency
0 Alternatives to fossil energy
and GHG propellant gas
Achieved
Anticipated
Absolute terms
We have evaluated the cumulative
absolute emission reductions, which
would be delivered if the targets set
by the large emitters are achieved in
their respective target years. GHG
emissions reported in 2009 were used
as the current base level in order to
characterise the efforts that must be
made from now to achieve targeted
reduction plans. This bears the promise
of emission cuts of approximately
170mt CO2-eq. out to 2020 (compared
to a business-as-usual scenario).
The Utilities and Materials sectors
show a strong emission reduction
commitment from 2009 to 2020.
This analysis is limited in scope since
emission reductions targeted through
the commercialisation of more energy-
efficient products are not taken into
account (e.g. fuel-efficient passenger
cars, electric appliances, etc).
Figure 8: Absolute carbon emissions reduction as implied by
reduction targets of main emitters
(from 2009 to target year)
0
-30
-60
-90
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Corporate emission targets fall
short of the EU ETS 2020 cap
It is important to bear in mind that
these emission reductions will not
take place in Europe alone and that
the scope of the Europe 300 index
does not capture many areas of the
economy, such as buildings and
transportation, which are sources
of considerable GHG emissions in
Europe.
As a result, corporate emission
reduction figures cannot be compared
to the EU-wide GHG reduction target
for 2020 (20% or a possible 30%
reduction by 2020 compared to 1990
levels).
However, the scope of the Europe 300
index is closer to the scope of the EU
ETS. It can be estimated that between
29% and 67% of direct emissions
reported by Europe 300 companies fall
under the scope of the EU ETS.
Although only 38% of responding
companies state that they participate
in the EU ETS, these companies
represent 95% of total direct emissions
of the Europe 300 index.
Industrials (Transportation only)
Energy
Materials
Utilities
21
Political Context
Two-thirds of these disclose the
quantity of emissions regulated
under the scheme in 2009. This
totals 565mtCO2-eq. (or 29% of
direct carbon emissions reported by
European companies in the Europe
300 index), with only 33 companies
in the Utilities, Energy and Materials
sectors responsible for 97% of these
emissions. This relatively low figure can
be explained by the fact that some of
the largest emitters (e.g. E.ON, GDF
Suez and ArcelorMittal) do not disclose
their emissions under the EU ETS, and
that most non-CO2 gases are not yet
regulated under the EU ETS.
On the other hand, one-third of direct
emissions reported by Europe 300
companies occur outside Europe.
Therefore, it can be estimated that up
to 67% of Europe 300 GHG emissions
may actually fall under the scope of the
EU ETS over 2013-2020.
Figure 9: Carbon emissions of the
Europe 300 sample
covered by the EU ETS
Figures are in mtCO2-eq.
1400
565
attaining emission
66 422
4 73
EU Europe 300 emissions not Utilities
covered by the EU ETS Energy
Utilities Materials
Other
22
Companies participating in the EU ETS
are more likely than others to perceive
a regulatory risk related to climate
change regulations (86% of them vs.
66% for companies not regulated).
Certainly as a result, they also engage
more with policymakers (91% vs.
68%) on climate change issues and
are more likely than others to have
set an emission reduction target
(90% vs. 74%). Management of these
companies is also more incentivised
than others to manage climate
change issues, including delivering on
GHG targets (78% vs. just 53% for
companies not regulated under the EU
ETS). This point holds particularly true
for the Utilities sector, where 84% of
companies have an incentive scheme
in place for management to achieve
emission reduction targets.
Figure 10: Specificities of EU ETS regulated companies
Perception of
regulatory risk
Engaging
policymakers
Emission
reduction target
Incentives for
targets
0 20
Out of EU ETS
Under EU ETS
Recent emissions trends are
positive
GHG emissions of the Europe 300
index were down 7% in 2009. Most
companies in carbon-intensive sectors
reported a sharp drop in their absolute
emissions in 2009, mainly due to
production cuts in a context of the
economic crisis.
However, the carbon intensity (i.e.
GHG emissions relative to production
volumes) remained well oriented in
2009. For instance, the electricity
production of 18 utility companies
decreased by 2.7% in 2009, while their
absolute CO2 emissions dropped by
5.6%, pointing to a 3% improvement
in CO2 intensity. This is also the case
for many companies in the Materials
sector. Aluminium producers Hydro
and Rio Tinto cut their carbon
intensities by more than 10% in 2009.
The four cement producers included
in the report also managed to reduce
their overall CO2 intensity. However,
some others saw a deterioration in
carbon intensity during the crisis,
due to adverse effects that can be
considered crisis-related (e.g. negative
mix effect in production volumes at
ArcelorMittal, some plants running
at suboptimal capacity rates at Air
Liquide, etc).
77%
53%
91%
68%
90%
74%
77%
53%
40 60 80
NB: as a % of respondent companies
 Corporate emissions reduction
targets fall short of EU ETS
objectives
Targets of Utilities, Materials and
Energy companies aggregated at
the sector level point to average
annual cuts in emission intensity of
respectively 2.1%, 0.8% and 0.4%
(excluding flaring down projects that
take place outside Europe).
This falls short of the planned decrease
in the absolute emission cap under the
EU ETS: 1.9% each year on average
over 2013-2020, and up to 4.1%
should the EU decide to embrace the
30% EU-wide GHG reduction target.
In absolute terms, emission reductions
planned by utility companies reach
127mt CO2-eq. by 2020. This can be
compared with the reduction efforts
required of the industries covered
by the EU ETS cap, i.e. 11%, or
205mt CO2-eq. by 2020 compared to
emission levels in 2009 under the 20%
reduction scenario for Europe, or 24%,
i.e. 447mt CO2-eq. under the 30%
reduction scenario.
Figure 11: Emission reduction targets versus EU ETS cap
PHASE II
2000
Emission cap 20% scenario
1500
1000
2008 2009 2010 2011 2012
Emission cap (30% scenario)
Emission cap (20% scenario)
Emissions
These targets reflect supply-side
carbon efficiency. As a result, reaching
EU ETS targets suggests more
ambitious targets and/or demand-side
efficiency to reduce the consumption
of electricity and petroleum products.
On this matter, it is interesting to note
that capital goods and automobile
manufacturers are making R&D efforts
to commercialise equipment with
higher energy efficiency (see dedicated
specific sector analyses).
Assuming constant emissions at
the 2009 level, emission reductions
targeted by utilities would significantly
help meet the EU ETS cap in 2020
under the 20% scenario, while the
cap under the 30% scenario remains
largely out of reach, and would
thus require stronger targets from
companies (see figure 11).
PHASE III
-127mtCO2
Emission cap 30% scenario
2013 2014 2015 2016 2017 2018
Risk and opportunity perception
In the Utilities and Materials sectors
(the latter including aluminium,
steel, building materials and
chemicals producers), as well as in
Transportation, companies generally
complain about the persisting
uncertainty over future climate change
policies, which create a negative
environment for taking decisions to
invest in long-life assets.
They advocate global sector-wide
schemes for regulating carbon
emissions rather than regional
initiatives, as the latter cause
competitive distortions and raise the
risk of carbon leakage.
The table 4 summarises the risks and
opportunities perceived by sectors
sensitive to carbon costs.
Emission cap (30% sc
Emission cap (20% sc
Emissions
2019 2020
23
Political Context
Table 4: Risks and opportunities perceived by companies sensitive to carbon costs
Risks
Power generation - Uncertainty over rules for use of CERs post-2012 and continuity of
EU ETS post-2020
- Reduced demand for electricity due to energy efficiency plans and
compliance with demand-side energy-efficiency mandates
- Dual steering instruments (renewable energy target and EU ETS) lead
to inefficiencies and sub-optimisation of production (Fortum)
Steel - No allocation of free CO2-rights for waste gases post-2012 under
the EU ETS
- Carbon leakage as CO2 costs distort competition. Call for a global
sectoral scheme
Aluminium - Competitive distortion with higher electricity prices. Compensatory
measures needed for the transition phase until all regions have similar
carbon constraints (Hydro)
- “Key requirements for investments in new capacity are long term
competitive power supply and a predictable regulatory framework”
(Hydro)
- “Regulations related to vehicle emissions and recycled content could
affect consumption trends of our products” (Rio Tinto)
Cement - Risk of CO2 costs post-2012 and carbon leakage
- Risk of having a allocation benchmark not taking into account all
reduction levers of the industry (Holcim)
Chemicals - Higher electricity prices and direct CO2 costs with no limited capacity
to pass-through costs in the price of products
Auto - EU emissions standards for cars seen achievable at the price of
significant R&D efforts
- Need to increase the type of models produced in small numbers to
fit with market specific requirements
Shipping - “Uncertainty as to how GHG emissions from shipping will be regulated.
The inability to reach an agreement at COP 15 means that local or
regional regulation of GHG emissions from shipping now seem more
likely”. (Maersk)
24
Opportunities
- Energy services business
- Development of renewable energies
- Surpluses of carbon credits (Arcelor Mittal)
- “Product diversification in high value products” such as “lighter
steels for automotive and construction markets”. Increased
profitability (Arcelor Mittal)
- “High energy price level increases the momentum for light-
weighting of vehicles, and aluminium is one of the main solutions”
(Hydro)
- “Products that help minimising lighting, heating and cooling,” in
buildings and “by integrating solar energy generation in the
facades” (Hydro)
- Energy efficient construction materials (e.g. insulation properties)
- Numerous products with applications in various sectors (e.g.
insulation materials, antifooling coatings, oxygen) help customers
to reduce emissions
- Total carbon footprint can be negative (reductions through the use
of products > direct on-site emissions)
- Development of electric vehicles
- “Anticipate that the shipowners that can offer the most energy
efficient or “low-carbon” fleet will have a competitive advantage
in the future” (Maersk)
 4 The 2010 Carbon
Disclosure Scores

The carbon disclosure scores assess

companies on the quality and What does a CDP carbon disclosure score represent?
completeness of their disclosures and The carbon disclosure score is normalised to a 100-point scale. Generally,
consider factors including: 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
• Clear consideration of business-
company responses to understand the context for each business.
specific risks and potential
opportunities related to climate
High (>70)
change; and
A higher score typically indicates one or more of the following:
• Good internal data management
• Strong understanding and management of company-specific exposure
practices for understanding GHG
to climate-related risks and opportunities
emissions, including energy use.
• Strategic focus and commitment to understanding the business issues
related to climate change, emanating from the top of the organisation
It is important to note that the carbon
• Ability to measure and manage the company’s carbon footprint
disclosure score is not a metric of a
• Regular and relevant disclosure to key corporate stakeholders
company’s performance in relation to
climate change management, because
Midrange (50–70)
the score does not make any judgment
A midrange score typically indicates one or more of the following:
about mitigation actions. A company’s
• Growing maturity in understanding and managing company-specific
disclosure score is based solely on the
risks and potential opportunities related to climate change
information disclosed in the company’s
• Good evidence of ability to measure and manage carbon footprint
CDP response.
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

25
The 2010 Carbon Disclosure Scores
The Carbon Disclosure Leadership
Index (CDLI)
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. This year’s
CDLI includes the top-scoring 10%
of the Europe 300 index2: 25 in total.
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.
Summary – Results of 2010 Scoring
Of the 300 companies in the Europe 300
index, 253 companies responded to the
information request in 2010. 252 have
received a carbon disclosure score based
on their answers (with one company
answering too late to be scored).
Almost half of the companies (47%)
achieved a score higher than 70, and
the average disclosure score is 67.5.
This is significantly above disclosure
scores from 2009.
Figure12 illustrates the distribution
of scores. According to the CDP
methodology, 45% of companies have
achieved a high score (>70), which
reflects a high level of understanding of
climate change issues associated with
a high level of reporting.
Figure
80
12: Number of companies by score range
70 Low score (15%)
60
50
40
30
20
10
0
11-20 21-30 31-40 41-50
Number of companies
26
Results by sector The Energy, Industrials and Financials
Score analysis at the sector level sectors show more modest results
reveals significant gaps. As in the in terms of disclosure with average
previous edition, the Utilities sector disclosure scores below 65.
ranks well above the others with an
average disclosure score of 75, three
points ahead of the Telecommunication
Services sector.
These two leading sectors have
something else in common - the
scores obtained by companies
within these sectors show some
of the lowest dispersion of scores
(standard deviations) against the sector
average (14.8 for Utilities, 13.1 for
Telecommunication Services). This is
an indication that companies in these
sectors do report better as a group. In
other words, the sector performance
cannot be (fully) attributed to a few
companies with extremely high scores.
The Consumer Discretionary sector
also scores above the Europe 300
average, but with a higher scattering
of company scores within this sector
(standard deviation: 18.8). This could
be attributed to the higher diversity
of industries represented in the
sector. In terms of disaggregation in
the Consumer Discretionary sector,
it appears that the Automobiles
& Components industry achieves
an average score of 80, whereas
companies within the Consumer
Services industry have a much lower
average score of 55.
Number of comp
Midrange (40%) High Score (45%)
51-60 61-70 71-80 81-90 91-100
2 The top-scoring 10% includes tied scores.
Results by section Figure 13: Disclosure scores by sector
The CDP questionnaire is composed
of distinct categories of questions Financials 65
that include different aspects, such
as governance, strategy, targets and Industrials 65
reporting of emissions data. The
detail of the scores by section allows Energy 65
a deeper level of analysis and helps Consumer
66
to better understand which aspects Staples

of climate change disclosure sectors Health Care 66

differentiate.
Information
Technology 67
In general, it is clear that companies Europe 300
score better when they describe average 68
the corporate governance practices Consumer
69
adopted in response to the climate Discretionary

change challenge than when they Materials 70

are asked to identify (and describe)
Telecommunication
business opportunities driven by Services
72
climate change policies. The average
disclosure score for governance is Utilities 75
89. However, the governance section
is weighted at only 3% of the total 0 10 20 30 40 50 60 70 80

disclosure score.
Average disclosure score
The largest share of the points lie
in the sections dealing with risks
and opportunities, strategies and
targets, and emissions reporting. Figure 14: Disclosure scores by sector for key sections of the questionnaire
The three leading sectors (Utilities,
Telecommunication Services, and 100

Materials) have been especially

good at reporting identified risks and
opportunities related to the climate
change challenge, alongside their
strategy and emissions reduction
targets. This is also true for the section 80
on emissions reporting and emissions
verification statements, although
other sectors with lower total scores,
such as Consumer Discretionary
and Consumer Staples have also
performed well in this field.
60

The bottom three sectors (Financials,

Industrials and Energy) obtained
below average or average scores in all
sections of the questionnaire.

Healthcare companies were 40

relatively good at identifying risks

and opportunities, but have below-
Financials

Industrials

Energy

Consumer Staples

Health Care

IT

Consumer Discretionary

Materials

Telecommunication Services

Utilities

average scores when it comes to

reporting on emissions data, reduction
strategies and targets. The Consumer
Staples sector, on the other hand, is
clearly weak in identifying risks and
opportunities raised by climate change. Scope 1, 2, 3 emissions data
Strategy & target
Emissions: history, intensity, verification
Risks
Opportunities

27
The 2010 Carbon Disclosure Scores

The Carbon Disclosure Leadership Table 5: The Carbon Disclosure Leadership Index 2010
Index 2010
The 25 highest scoring companies Sector Company Disclosure Score 2009
Score 2010
in the Europe 300 index are in the
Carbon Disclosure Leadership Index Consumer Discretionary Philips Electronics 94 73
(CDLI). All sectors are represented this  
Renault 93 80; CDLI
year, whereas in 2009, no companies Consumer Staples Reckitt Benckiser 93 80; CDLI
in the Telecommunication Services  
Tesco 92 69
sector were included. The Consumer  
Staples sector is also more strongly Nestlé 92 60
represented with Tesco and Nestlé Energy Royal Dutch Shell 89 75
joining Reckitt Benckiser in the index. Financials Royal Bank of Scotland 93 77; CDLI
 
HSBC Holdings 92 92; CDLI
Some sectors remain largely over- or
under-represented in the CDLI. The Health Care Novo Nordisk 89 73
Materials sector distinguishes itself Industrials Siemens AG 98 85; CDLI
clearly, with six companies included in  
Deutsche Post AG 97 63
 
the index. This sector is therefore more   FERROVIAL 89 68
than twice as highly represented in the
index with respect to the overall index Saint-Gobain 89 67

of scored companies (making up 24% Information Technology Nokia Group 91 78; CDLI
of the CDLI and only 11% of scored Materials BASF SE 96 94; CDLI
companies).  
Bayer AG 95 95; CDLI
 
  Lafarge 94 84; CDLI
On the contrary, the Financials sector  
is largely under-represented. This year,  
UPM-Kymmene Corporation 90 72; CDLI
it represents only 8% of companies SCA 90 63; CDLI
in the CDLI and 24% of scored Rio Tinto 89 87; CDLI
companies.
Telecommunication Services Telefonica 89 59
 
Siemens ranks first for this edition, BT Group 89 65
and eleven companies entered the Utilities Centrica 92 84; CDLI
Europe 300 CDLI for the first time. The  
  Scottish & Southern Energy 90 78; CDLI
performance of Deutsche Post, Nestlé
and Telefonica should be highlighted, EDP - Energias de Portugal S.A. 90 75

as their scores have risen by more

than 30 points compared to last year’s
results.

It should also be noted that Royal

Dutch Shell has replaced Total in the
Energy sector, and NovoNordisk has
taken the place of GlaxoSmithKline,
as the only company to represent the
Healthcare sector.

28
 5 The 2010 Carbon
In the 10 years that CDP has
monitored disclosure practices,
corporate activity has advanced to a
stage where analysis of performance
can aid investors who want to
identify leading companies in carbon
management. In 2009, CDP piloted a
performance component in an effort
to respond to investor requests for this
analysis.
This year, all companies with
sufficient disclosure scores received
a performance score; the qualifying
threshold to receive a performance
score was a minimum disclosure score
of 50. Disclosure scores lower than
50 do not necessarily indicate poor
performance. Rather, they indicate
insufficient information to evaluate
performance. For the Europe 300, the
performance scores are published
for the top 15% of the responses (33
companies).
While performance scoring is an
instructive exercise for all stakeholders,
CDP recognises that this is a process
that will evolve over time. CDP
recommends that investors review
individual company disclosures in
addition to performance rankings in
order to gain the most comprehensive
understanding of company
performance.
While clear indicators of good
performance emerge from the results,
there are several factors to consider
when evaluating where a company is
ranked in comparison to its peers.
Performance Scores
• Carbon performance ranking is
based solely on information
disclosed in a company’s CDP
response. Any additional negative
or positive actions that are not
disclosed in a company’s CDP
response are not considered in
the application of the performance
score methodology.
• CDP performance results should
be considered in conjunction with
other carbon metrics to provide
a more comprehensive picture
of a company’s performance on
mitigating climate change.
• The relative weighting of
performance indicators within the
Rating Methodology does not take
into consideration certain sector-
specific issues and challenges,
such as customer expectations,
regulatory requirements or cost of
doing business.
It is important for investors to
keep in mind that the CDP carbon
performance score is not:
• An assessment of the extent to
which a company’s actions have
reduced carbon intensity relative to
other companies in its sector.
• An assessment of how material a
company’s actions are relative
to the business or to climate
mitigation; the score simply
recognises evidence of forward
action.
• A comprehensive measure of how
green or low carbon a company
is but, rather, an indicator of the
extent to which a company is taking
action to manage its impacts on,
and from, climate change.
Carbon performance scores form
the basis for determining the Carbon
Performance Leadership Index (CPLI)
—the companies with the highest
performance scores. As with the
CDLI, a company’s response must be
publicly available to be eligible for the
CPLI.
29
The 2010 Carbon Performance Scores

The following descriptions explain the Figure 15: What are the characteristics of carbon performance
four performance bands that were leadership in 2010?
used for categorising respondents.
They provide an illustrative example of
Strategy
the potential profiles of the companies
that may be included in each band.
• Integrate climate change risks and opportunities into overall
The key indicators that identify the
company strategy
characteristics of 2010’s performance
• Establish GHG emissions reduction target
leaders are outlined in Figure 15.
• Engage with policy makers on climate policy
Investors are also encouraged to
read individual company responses
in order to gain further context for a
company’s carbon performance score. Governance
Care should be taken when comparing
performance across companies. • Identify formal accountability for oversight and management
• Establish incentives for climate-change-related activities
More information can be found
at www.cdproject.net in the
questionnaire, supporting methodology
Stakeholder Communications
and guidance documents, as well as
within individual company responses.
• Communicate in mainstream reporting or other regulatory filings
• Verify emissions data through an external third party

Achievements

• Implement energy or emissions reduction initiatives

• Achieve significant emissions reduction
• Capitalize on opportunities as sources of business value

30
The CDP 2010 carbon performance bands
The carbon performance score is given as a banded score. Indicative descriptions of the bands follow and are for
guidance only. The drivers of any individual company score may vary across a number of different indicators. As
such, investors should read individual company responses to understand the context for each business.

Band A (Leading): Companies with scores greater than 80

Companies in this band excel for overall performance — relative to those in other bands — indicating both higher
degrees of maturity in their climate change initiatives and achievement of their objectives. Companies in this band
demonstrate the following characteristics.
Strategy: With the highest number of significant risks and opportunities identified, companies in this group were
the most likely to demonstrate integration of their climate-related priorities into their overall business strategy.
They frequently disclose targets aligned with those ambitions and emission reduction initiatives.
Governance: These companies demonstrate the most structured and most defined climate change management
mechanisms by frequently reporting formalized accountability, incentives and oversight from the board or
executive level.
Stakeholder communications: These companies also recognize the importance of providing transparent and
quality disclosure for their stakeholders by taking steps to verify data and report climate-related information in
their external communications.
Achievements: In support of their commitment to reduce emissions, these companies disclose the highest
number of actions taken to reduce their emissions, and most report success in achieving emissions reductions.

Band B (Fast following): Companies with scores of 51 to 80

Companies in band B also recognize the importance of climate change and are quickly following in the footsteps of
the leading companies. While the majority of companies in band B note climate change as a priority, their responses
indicate that actions and initiatives may not be as established or as well integrated into the companies’ overall
structures and strategies compared with those in band A. However, there may be a broad spectrum of performance
maturity within this tier, because some seemingly higher-performing companies in this band may have provided
limited information for certain key performance areas, thereby constraining the ability to fully evaluate them.

Band C (On the journey): Companies with scores of 21 to 50

Companies in band C indicate some activity on climate change. Most companies in this group identify at least one
risk from climate change and accordingly exercise some degree of oversight to monitor the progress of their climate
change initiatives. The levels of integration and maturity of those initiatives tend to vary according to disclosure of
emissions reduction targets, implementation of emissions reduction activities, employee incentives and verification
of emissions information. This group represents a variety of companies, including those that are new to taking
action on climate change, those that do not have climate change objectives as strategic actions for the organisation,
and those that do not believe the agenda to be a shorter-term priority.

Band D (Just starting): Companies with scores of 20 or below

Companies in this band recognize the importance of participating in CDP, and they have therefore achieved
reasonable levels of disclosure (i.e., a disclosure score >50). However, they have disclosed limited evidence of
actions taken on mitigation or adaptation. Companies in this band may include (1) those that believe that issues
regarding climate change are not relevant to them and (2) those that are beginning to take action on climate change.
As such, no further assertions can be made about their performance.

31
The 2010 Carbon Performance Scores

Summary – Results of 2010 Scoring
Overall, 217 companies received a
sufficient disclosure score to get a
CPLI score. The breakdown by band
(figure 16) shows that more than two
thirds of companies got a grade A or
B and only very few (8 companies)
scored in the D band.
The Telecommunication Services,
Energy and Utilities sectors are over-
represented in the Band A Score
range. Energy companies represent
only 4% of companies with a
The proportion of Financials companies Table 6: The list of companies with
is higher in the CPLI than in the a band A performance
CDLI, but the weight of the sector in scores by sector
these two indices is still below their
weight in the Europe 300 index. This Sector Companies in Performance
Band A
indicates that the Financials sector
underperforms other sectors on a Consumer BMW, Kingfisher, Philips
relative basis in terms of disclosure and Discretionary Electronics, Renault
performance with regard to climate Consumer Staples Nestlé, Reckitt Benckiser,
change issues (according to CDP Tesco
scoring methodologies). Energy Eni, Repsol YPF, Royal Dutch
Shell
CPLI Table – Band A Financials Barclays, HSBC, Munich
Table 6 presents the list of companies Re, Royal Bank of Scotland,
with a Band A performance scores by Swiss Re, UBS

performance score, and constitute 9% sector. Health Care Novo Nordisk

of the companies in Band A. Industrials Deutsche Post, Ferrovial,
Every sector is represented in the Rolls-Royce, Siemens
This sector is a particularly interesting CPLI, in some cases with the same Information Nokia Group
case, as it illustrates the disconnect companies as in the CDLI (e.g. Technology
between disclosure and performance Consumer Staples, Healthcare, IT). In Materials BASF, Bayer, Lafarge
scores (the average disclosure score of some cases, there are minor changes;
Telecommunication BT Group, Deutsche
this sector is below average). for example, Rolls Royce appears Services Telekom, Royal KPN,
instead of Saint-Gobain in this ranking. Telefonica
However, a large majority of Utilities E.ON, Iberdrola, National
companies in the CDLI did receive high Grid, Scottish & Southern
performance bands (19 A bands, 6 B Energy
bands).

Figure 16: Number of companies by Figure 17: Weight of sectors in band categories
performance band
120 35

Number of companies
Sectors over represented in band A
30
100

25
80

20

60

15

40

10

20
5

0 0

A B C D
Industrials

Financials

Materials

Health Care

Consumer Staples

Consumer Disc.

IT

Utilities

Energy

Telecommincation Services

Band A
Band C
All bands
32
 6 Analysis by Sector
Introduction
253 (84%) companies in the Europe
300 index responded to the CDP 2010
information request. Key highlights are:
• With regard to emissions data,
92% of responding companies
provide Scope 1 emissions and
91% provide Scope 2 emissions
figures. More than half of
respondents3 have more than 80%
of emissions data externally verified.
Three quarters provide at least one
figure for their Scope 3 emissions.
• With regard to identification of
risks and opportunities, European
companies are more concerned
by climate change policies than
by the physical impact of climate
change, where timing is often
uncertain. While energy-intensive
sectors focus on risks related to
carbon regulation, the perception of
business opportunities (shared by
87% of respondents) is widespread
among sectors. However, a smaller
proportion of respondents (71%)
consider that their products and
services can help third parties to
reduce their emissions.
• With regard to managerial aspects,
79% of companies have an
emissions reduction target and
62% apply management incentives
linked to objectives, including
climate change issues.
3 This excludes the Utility sector for which scope 2 (related
to power consumption) is not relevant as the sector produces
electricity, and emissions related to the purchases of electricity
for resale fall in scope 3.
Levels of disclosure across
different sectors
The Telecommunication Services,
Utilities and Industrials sectors have
the highest response rates to the
CDP questionnaire this year. Despite
a relatively low response rate, the
Consumer Discretionary sector
distinguishes itself by a high disclosure
rate for Scope 3 emissions and a
relatively high level of emissions data
verification (50% of companies have
more than 80% of their Scopes 1 and
2 emissions verified by independent
third parties).
The perception of a significant
regulatory risk linked to climate change
policies is widely spread among
energy-intensive sectors (Utilities,
Materials, Energy). However, while
they perceive themselves as at risk,
the Energy and Materials sectors have
fewer internal emissions reduction
targets at the corporate level than
average. However, the practice of
incentive schemes for the management
to achieve emission reductions is well
spread among Energy companies.
More than 4 out of 5
Telecommunication Services
companies also consider that
carbon regulation poses risks. This
follows the European Commission’s
recommendation in October 2009
on mobilising Information and
Communications Technologies to
facilitate the transition to an energy-
efficient, low-carbon economy.
On the other hand, the Information
Technology and Telecommunication
Services sectors are optimistic about
opportunities related to climate
policies, as 100% of them identify
opportunities and believe they have
products or services that can help their
clients reduce emissions.
33
Analysis by Sector

Table 7: Levels of disclosure across different sectors

% of sample answering CDP

services help third parties to

emissions reduction targets
% of sample veryfing >80%

% of responders indicating
of Scope 1 AND Scope 2

regulatory opportunities
management incentives

% of responders seeing

% of responders seeing

% of responders seeing

% of responders seeing
% of sample disclosing

that their products and

physical opportunities
% of responders with

% of responders with

avoid GHG emissions

Scope 3 emissions

regulatory risks

physical risks
emissions
20103

Consumer Discretionary 73 57 87 73 57 53 70 83 73 50

Consumer Staples 89 48 70 87 74 52 74 87 70 65

Energy 80 50 58 58 83 67 100 92 83 33

Financials 83 48 87 77 52 60 77 85 75 68

Health Care 73 55 82 64 64 45 55 55 36 9

Industrials 90 50 50 86 55 77 55 84 45 50

Information Technology 88 43 100 86 86 100 43 100 57 57

Materials 84 48 67 78 67 85 89 93 70 70

Telecommunication Services 94 50 88 88 63 100 81 100 88 81

Utilities 92 N/A 73 82 77 95 95 100 82 86

Grand Total 84 50 74 79 62 71 74 87 68 61

Risks and opportunities perception Table 8: Risk perception of sectors by type of risks
among sectors
Most regulatory risks identified by Cap and trade schemes Materials (risk quoted by 42% of companies);
responding companies are short-term Energy (40%)

risks (within a 5-year timeframe). Nearly Regulation and tax Utilities (64%),
three quarters (74%) of companies Telecommunication Services (50%),
Energy (40%)
claim that they will be exposed to at
least one regulatory risk over the next Product labelling and energy efficiency Consumer Discretionary (43%),
Telecommunication Services (42%)
five years. The most exposed sectors
are: Utilities (64%), Energy (60%),
Materials and Telecommunication
Services (58%).
Figure 18: Percentage of responding companies in each sector seeing
Most commonly identified risks within risks due to products regulations and standards
this 5-year timeframe are associated (efficiency, labelling)
to cap and trade schemes; regulation
and tax; product labelling; and energy Consumer
efficiency standards. staples
11%

The sector breakdown of the most Industrial 17%

important risks (cap and trade
schemes; regulation and tax) shows Financials 20%
the same result as the timescale
breakdown, except for product Utiliities 25%
labelling and energy efficiency, where
Consumer
Consumer Discretionary is the most Discretionary
26%
exposed sector.
Materials 33%

Telecommunication
Services 63%
0 10 20 30 40 50 60 70

% of responding companies

34
Turning regulations into Risks associated with the physical
opportunities impacts of climate change “Some Nestlé sites are
Similar to regulatory risks, most Companies consider that they being affected by lack
regulatory opportunities identified by are mainly exposed to changes
the sample are short-term: 64% of in frequency of extreme weather of precipitation.”
respondents identified at least one events (one-third of respondents)
regulatory opportunity within the next five and precipitation patterns. They also
years. Materials and Telecommunication identified that the changes in supply Nestlé
Services (75%), Utilities (67%) and chain and/or customers (17% of
Energy (60%) sectors are seeing physical risk identified) and natural
business opportunities coming from resources (12% of answers) occurring The Consumer Discretionary,
climate change regulation. The most as a consequence of extreme weather Consumer Staples and Financials
commonly identified opportunity is linked events could represent significant risks. sectors appear relatively more exposed
to product regulations and standards, These risks are supposed to occur in to changes in supply chain and/
followed by regulation and taxes, as well the short-term (the next five years), or customers that may result from
as cap and trade schemes. except the potential impacts on natural weather-related natural hazards. In
resources, which are considered the Consumer Staples sector, all the
The perception of business as uncertain by most of responding companies concerned are in the Food,
opportunities in Telecommunication companies. Beverage and Tobacco industry, as
Services is related to products or they fear shortages of agricultural
services which could help clients Companies across sectors identify raw materials, due to drought, water
to reduce emissions: “Stricter extreme weather events as risks, scarcity, etc.
regulations in energy and fuels could whereas water scarcity as a result
drive companies to use our solutions of a potential change in precipitation In the Financial sector, the Banks and
(teleservices) to reduce energy and fuel patterns is more of a concern for Insurance industry groups identify the
cost.” SWISSCOM water-intensive sectors, such as risk that changes in weather patterns
Utilities (52% of companies); Consumer and natural catastrophes can impact
Most companies in the Materials sector Staples (33%, which includes the their clients’ solvency and ability
expect that an international post- Food, Beverage and Tobacco industry); to operate, especially in sectors,
Kyoto agreement could create new and Materials (32%). particularly vulnerable to climate
markets and boost existing markets change (fisheries, forestry, tourism,
for energy efficient products. They also agriculture, etc).
consider that potential future cap and
trade mechanisms in the US, Canada
and other developed countries could
represent opportunities for them to
benefit from early emissions reductions
and innovative products and solutions.

Table 9: Risks associated with the Figure 19: Perception of a risk of change in supply chain and/or customers
physical impacts of induced by weather events within sectors
climate change
Information
technology 0% % of responding companies in %
Induced changes in natural
Induced changes in supply
Changes in precipitation
Changes in frequency of

8%
extreme weather events

chain and/or customers

Healthcare

Materials 12%

Utilities 17%
resources
patterns

Industrials 19%
Tele-
Uncertain 27 % 21% 31% 32% communication 19%
services
Current 27% 29% 14% 10%
0–5 19% 16% 21% 19% Energy 25%
6 – 10 3% 5% 7% 6% Consumer
discretionary 38%
11 – 20 7% 13% 7% 10%
21 – 50 3% 2% 0% 3% Financials 39%
> 50 14% 14% 19% 19%
Consumer
staples 46%

0 10 20 30 40 50
35
Analysis by Sector

Key themes from the Europe 300

company responses by industry
sector

Climate change poses specific

challenges to every sector. The key
climate change issues faced by
each of the 10 sectors of the GICS
classification are summarised in
table 10.

Table 10: Key themes from the Europe 300 company responses by industry sector

Sector Key themes highlighted by Europe 300 companies

Consumer Discretionary - Improving the CO2-efficiency of products to meet consumption trends and comply with regulation
- Engaging regulators to ensure sustainable incentives and framework to stimulate demand for new technologies,
e.g. electric vehicles
- Awareness campaigns to clients to act on emissions at product use phase (e.g. eco-driving training)
Consumer Staples - Improving the carbon efficiency of stores to cut energy costs and anticipate higher fossil fuel prices (retailers)
- Switching to HFC-free refrigeration systems (food retailers)
- Improving the CO2-efficiency of products and packaging to meet changes in consumer demand and mitigate
the impact of potential regulations (carbon labelling, CO2 tax)
- Securing sustainable supply of agricultural raw materials as increasing adverse weather events may affect crops
and price stability
Energy - Carbon-efficiency of processes to mitigate impact of CO2 cap and trade schemes and flaring down regulations
- Lowering the carbon-intensity of the product portfolio and sustainable sourcing of biofuels to comply with biofuel
blending mandates and Low Carbon Fuel Standards
- Taking opportunities and positioning on alternative energy technologies (renewables, carbon capture and storage, hydrogen)
Financials - Exposure of banks and insurers to clients with credit profile sensitive to the increase of CO2 costs
- Opportunities in the development of green products and services (e.g. financing, leasing, insurance of renewable
energy systems, low emissions vehicles, low consumption homes; carbon finance, eco loans)
- Identifying risks and taking opportunities in insurance and reinsurance of weather-related natural catastrophe risks
Health Care - Mixed views on business opportunities linked with disease spread and intensification due to climate change
- Potential difficulties on carrying product labelling due to the abundance of substances and products
Industrials - Risk of carbon/energy efficiency regulations for air and marine carriers. Commercial opportunities with
“low carbon” offers (Transportation)
- R&D on CO2-efficient products and creation of business units to capture opportunities in growing markets
for energy efficient engines, motors, buildings, mobility, and renewable energies
Information Technology - Product innovation to meet carbon reduction needs of customers (e.g. smart metering solutions for electricity suppliers)
- Energy-efficiency of products in anticipation of potential EU regulation by 2015
Materials - Lowering carbon-intensity of production processes is key to avoid significant costs under cap & trade schemes
- Engaging regulators on global sectoral schemes to avoid risks of carbon leakage regionally and distortion of competition
- Seizing market opportunities with the development of eco-efficient products helping emissions cuts in other sectors
(e.g. insulation products)
Telecommunication Services - Risk of rise in the price of equipments, in the event suppliers would have to comply with energy efficiency standards
on their products
- Eco-design of products
- Commercialisation of new products/services to help consumers reduce emissions (e.g. videoconferencing)
Utilities - Diversifying the energy mix towards low-carbon energies to reduce financial exposure to CO2 costs under the
EU ETS over 2013-2020
- Compliance with national renewable and energy efficiency mandates applying to electricity/gas suppliers in some
EU Member States
- Seizing opportunities in the development of renewable energies and of energy efficiency services, to compensate
risks of displacement of non renewable power generation and reduced demand for electricity

36
Contrasting outlooks within sectors
Two companies within a sector
can have radically different views,
positioning, practices or standards
regarding an identical and specific
challenge posed by climate
change. Table 11 gathers diverging
or contrasting answers given by
companies to a common sector issue.
Table 11: Contrasting outlooks with sectors
Issue Outlook 1
Consumer Discretionary Regulatory FIAT: “...the EU regulation introduces financial penalties
Risk: Emissions for car manufacturers not compliant with their specific
standards on targets starting from 2012 (the penalty amounts a
passenger cars maximum of €95/g for each exceeding gram). Fiat has
in place a process in order to constantly monitor the
achievement of its target. No risk of penalties is being
identified.”
Consumer Staples Physical Risk: SAB Miller: “Physical availability and quality of water
Availability and resources to our operations in a number of locations
quality of water have the potential to pose a risk to business continuity.
resources Given the importance of both quality and quantity of
this resource to our products this is considered to be an
extremely import risk and forms part of our 3 global focus
areas.”
Energy Regulatory Statoil: “Statoil is a pioneer within CCS, and is engaged
opportunity: in 3 of 4 worlds biggest CCS projects, as an operator
development of at Sleipner and Snøhvit fields in Norway and as partner
alternative fuels in In-Salah, Algeria. Statoil was the first company to
and technologies store CO2 in a geological formation offshore... Statoil
is developing business opportunities as operator of
geological storage of CO2.”
Financials Indirect regulatory Barclays: “We have not yet faced any material financial
risk: credit risk of impact as a result of current or forthcoming climate
client base due to change regulation on our client base. Deep industry
carbon regulations expertise combined with strong risk management means
that visible regulatory risks from climate change are
assessed as part of the broader industry and macro-
environment when assessing lending and investment
decisions. For instance, we model carbon price scenarios
during the credit analysis process for energy intensive
clients in relevant jurisdictions.”
Health Care Physical GlaxoSmithKline: “Below is a list of events associated
opportunity: with climate change that have the potential to
increase of create opportunities for GSK in the form of a greater
diseases as an requirement from society to GSK for preventative action
effect of climate as well as the supply of effective medicines. Changes
change in precipitation patterns are likely to influence patients’
needs as water-borne diseases increase their spread
with increasing global temperatures. The increase in
frequency of extreme weather events may exacerbate
the spread of respiratory, diarrhoeal and water-borne
diseases. Changes in crop yields induced by climate
change would increase malnutrition related diseases.”
Outlook 2
Porsche: “Through intensive research and development
efforts, Porsche is in a position to comply with the
prescribed mandatory national emission limits for all its
vehicle models in order to, on the one hand, contribute
towards climate protection and, on the other, to avoid
the payment of penalties. If the limit values prescribed
in regulations cannot be achieved within the prescribed
period, despite every effort and by means of appropriate
improvements within development, there is a threat of
severe penalties.”
Carlsberg: “For the moment, we don’t envisage any
concrete direct physical risks to our production sites due
to extreme weather conditions such as hurricanes and
floods.”
ENI: “Regarding the geological storage of carbon
dioxide, eni is focused on backing both the Italian
and European regulators in implementing a support
framework to remove obstacles to the full development
of CCS technology. In 2008, eni signed a strategic
cooperation agreement with Enel for the joint
development of CCS technologies aimed at accelerating
the implementation of the entire technology package
required for the capture, transfer and confinement of
carbon dioxide. A joint pilot project is on-going.”
BCP: “BCP is planning to internalize the environmental
risk of all customers on credit risk analysis. But for a
correct identification of risks and how these should
be incorporated into risk analysis is now collecting
information and providing training to employees.”
Novo Nordisk: “Looking at the direct impacts of climate
change on human health, climate change is likely to
create increased demand for treatment of vector-borne
and respiratory diseases. As our core business is chronic
diseases such as diabetes and haemophilia we do not
see significant opportunities in terms of selling more
drugs as a consequence of climate change.”
37
Analysis by Sector

Industrials Regulatory ABB: “45% of ABB’s revenues are generated from the
opportunity: demand for energy efficiency. As energy prices rise,
commercialisation energy efficiency will become an even more important
of energy-efficient purchase criterion. ...
product, renewable In 2008 alone, the worldwide installed base of ABB drives
energies is estimated to have saved around 140 million metric tons
of carbon dioxide.”
Information Technology Regulatory risk: Capgemini: “Capgemini is anticipating changes in the
requirements regulatory environment by taking a proactive stance
related to energy- towards these rising issues and increasing our focus
efficiency towards building Green data centres, implementing
Green IT and energy efficient technologies as well as
focusing on reducing our business travel. We continue
to work with our suppliers to minimize our environmental
impact in our supply chain ...”
Materials Regulatory Yara: “The regulatory requirements will strengthen
opportunity: the need for efficient agriculture, and thereby for
the tailor-made fertilizers and best practice fertilizing
tools developed by Yara. Stricter GHG regulations on
production will strengthen the position of Yara’s catalyst
technology on N2O abatement in nitric acid plants.”
Telecommunication Regulatory risk: Telefonica: “The specific ICT regulation for lowering
Services requirements emissions will impact also our suppliers from the ICT
related to energy- sector as they will also be requested to improve their
efficiency energy efficiency in their products and services. This
would probably increase our costs. For example, costs
of energy efficient equipment for telecommunications in
networks.”
Sandvik: “Sandvik has not identified any significant
climate change opportunities that have occurred due to
regulations. The emission trading scheme could be seen
as an opportunity when the emission rights are not used
fully, but they are not significant.”
Ericsson: “We do not consider our company to be
exposed to regulatory risks.[...] we are leading in our
sector in terms of energy efficiency, and thus we are well
positioned to comply with any regulatory requirements
related to energy efficiency if/when such emerge.
We believe this readiness will result in a competitive
advantage in the marketplace.”
K + S: Do current and/or anticipated regulatory
requirements related to climate change present
significant opportunities for your company? “No”
Swisscom: “No modification of current legislation or
regulation expected in near future. Voluntary target
agreement for energy efficiency and CO2-emissions
between Swisscom and Swiss federal government in
force until 2012 liberates Swisscom from local and states
requirements.”

Utilities Regulatory risk: GDF Suez: “Energy regulations may affect our energy EDF: “EDF has chosen to implement a program of
Demand-side sales and will increase the need of energy saving several energy efficiency actions in all its markets with
energy efficiency certificates acquisitions. However it will also provide new the goal of allowing EDF to comply with all of its legal
mandates opportunities for our Energy Services branch.” and regulatory obligations, in particular regarding energy
efficiency certificates (EEC). However, EDF cannot
guarantee that the actions taken by the Group in favour
of controlling energy demand will be sufficient to achieve
the goals set by the public authorities.”

38
 7 Sector Specific
Consumer Discretionary
The Consumer Discretionary sector
is very diversified, consisting of five
different industries: Automobiles &
Components (8); Consumer Durables
& Apparel (8); Consumer Services (5);
Media (11); and Retailing (9).
Disclosure highlights
Companies in CDLI: Philips Electronics
(94); Renault (93)
Companies with an A performance
band: BMW; Kingfisher; Philips
Electronics; Renault
Largest non-respondents by market
capitalisation: Swatch Group; Christian
Dior; PPR; Hermes International;
Luxottica Group; Michelin (among 11
non respondents)
Total GHG emissions Scope 1:
17.0 mtCO2e
Total GHG emissions Scope 2:
19.1 mtCO2e
Total GHG emissions Scope 3:
420.4 mtCO2e
Analysis
Emission profile
Most of the carbon footprint in the
Consumer Discretionary sector comes
from the product use phase. Indeed,
Automobile Manufacturers and
Consumer Electronics sub-industries’
Scope 3 emissions represent more
than 90% of the total absolute CO2
emissions for the entire Consumer
Discretionary sector. For instance,
Philips Electronics (301 mtCO2e
Scope 3 emissions) evaluated its
direct emissions at “less than 1%
compared to the impact of the usage
of [its] products”. Apart from auto
manufacturers, Philips is the only
company which has clearly set an
emissions reduction target for its
products. The group is committed
to improving the energy efficiency
of its “products with 50% by 2015
compared to 2009”. Apart from
product energy-efficiency, improving
packaging, transportation, distribution
lifetime reliability, reducing hazardous
substances, facilitating disposal and
recycling are the other key actions
implemented by the sector to reduce
its carbon footprint.
Risks and opportunities
Automobiles & Components is the
only industry to unanimously see
a significant risk due to carbon
regulations. The main risk lies in
regulations forcing them to meet fuel
economy standards for their vehicles
sold (e.g. EU Directive, US CAFE-
standards and US-Tier-standard)
rather than incurring significant fines
or to having their products barred
from a market. However, most of the
automobile manufacturers believe
that they are on track to meet existing
regulations. They all believe that they
are part of the solution to climate
change, as they unconditionally believe
they are developing products and
services that help their clients reduce
emissions. This view is shared by
Philips Electronics and Electrolux in the
Consumer Durables & Apparel industry.
The latter stresses that “within
consumer durables, the products with
the best environmental performance
accounted for 21% of [their] total sold
units in 2009 and 30% of gross profit.
Also, tax credit permit to encourage
energy-smart product purchase…This
underscores that efficient products
deliver higher profit margins.”
39
Sector Specific Analysis
Industry focus: Automobiles &
Components
In this industry, the most interesting
Key Performance Indicator (KPI) is
the sales-weighted CO2 emissions
(Scope 3) by region (at least EU, US,
Japan and other) and by segment.
This KPI allows for tracking reduction
efforts in the average fuel economy of
vehicles sold and for assessing efforts
remaining to reach emission standards.
However, reporting on this KPI remains
relatively poor with uneven consistency
between auto manufacturers.
While auto manufacturers have
made important efforts to answer
comprehensively the questionnaire,
this important KPI is still not available
in a comparable way. Fiat reports
the lowest corporate average fuel
economy for vehicles sold in Europe as
shown in table 12.
In this 2010 edition of the Europe 300
report, auto manufacturers report on
new initiatives launched to develop
alternative mobility. For example, PSA
is working on new mobility services,
such as Mu by Peugeot, a renting
service or new monthly fee concepts
for electric vehicles. Indeed the two
electric vehicles that are going to be
launched at the end of the year will be
offered with monthly leasing fees4. In
2009, Renault Environnement joined
forces with the Belgian company Key
Driving Competences (KDC) to deploy
innovative eco-driving training projects
and the services associated with
Table 12: Corporate average fuel economy for vehicles sold in Europe
Of which petrol (in Western Europe)
  2009 2007
BMW 156* 178
Fiat 131 142
Porsche ND  
PSA Peugeot 135.8 ND
Citroen
Renault 138.9*** 156.6
* Germany only;
** This figure does not seem consistent;
*** Communicated by the company but not in the CDP
40
sustainable mobility for all. Since 2005,
KDC has provided more than 50,000
hours of training, bringing about a real
change in attitude in the daily driving
practices of 10,000 drivers, both
business users and consumers.
In the race to maximise vehicle
efficiency, auto manufacturers have
to dedicate significant amounts of
R&D and investments to develop new
technologies.
For instance, with PSA’s objective
to sell one million e-HDi-equipped
vehicles by 2013 (Stop & Start
system that combines a reversible
starter-alternator and a diesel
engine), the company spent €300
million of investment to implement
this technology and mobilised 500
engineers and technicians during 36
months.
The Renault-Nissan Alliance is
investing €4 billion in projects related to
zero-emission mobility.
As a point of comparison, the Euro 5
standard has required approximately
€1.5 billion of capital expenditure on
nearly 4 years, according to PSA.
Due to its important footprint on the
economy and employment, the sector
has a long tradition of interacting
with governments and lobbying to
influence regulation, tax policy, as
well as town and country planning.
Of which diesel (in Western Europe)
2008 2009 2007 2008
163 158 167 150
137 129 141 137
       
ND
152 147.5 139.1 136.9
More recently, companies have
been engaging with governments to
enhance the development of electric
mobility, as it is crucial that states
support the development of electric
vehicles, hybrids and plug-in hybrids
with incentives to stimulate emerging
demand for these vehicles. For these
new markets to reach maturity, PSA
insisted that it is vitally important that
these incentives be highly visible and
stable over time.
BMW Group has made available its
MINI E and Hydrogen 7 vehicles to
a large number of global political
decision makers (in the US, the UK
and in Berlin) in order to demonstrate
in practical use, the potentials of
Electromobility and the hydrogen
technology and to illustrate the political
need for action concerning long term
infrastructure issues.
From Tennessee to Israel and Japan,
the Renault/ Nissan Alliance signed
partnerships with over 40 public and
private entities by end 2009.
Interestingly, PSA Peugeot Citroën also
defends the position that test cycles
and procedures should be harmonised
worldwide. This is an increasingly
important issue to be able to better
measure fuel economy of the vehicles,
in particular with the emergence of
hybrids and electric vehicles.
Target
2009
148 - 25% less CO2-emissions in our
newly sold fleet worldwide from
2008 until 2020
129**  
  -1.7% per year
sell one million vehicles emitting
less than 120g/km of CO2 in Europe
each year as from 2012
129.6 130gCO2/km by 2012 in average for
internal combustion vehicles
4 Reference: In French newspaper La Tribune, 7 September
2010, “PSA lance la première voiture électrique de série”.
Consumer Staples
The Consumer Staples sector is
composed of three industries: Food &
Staples Retailing (9 companies); Food,
Beverage & Tobacco (14); Household &
Personal Products (4).
Disclosure highlights
Companies in CDLI: Reckitt Benckiser
(93); Tesco (92); Nestlé (92)
Companies with an A performance
band: Reckitt Benckiser; Tesco; Nestlé
Largest non-respondents by market
capitalisation: Casino; Colruyt
Total GHG emissions Scope 1:
21.6 mtCO2e
Total GHG emissions Scope 2:
20.2 mtCO2e
Emission profile and carbon
mitigation actions
Within the sector, the Household &
Personal Products industry has the
lowest carbon footprint. Direct on-site
emissions are slightly higher than those
related to the purchase of power and
heat in the Food, Beverage & Tobacco
industry. This is the opposite pattern for
retailing companies for which electricity
and heat dominates the energy
mix, due to lighting and refrigeration
requirements in stores. However,
overall these emissions sources
are dwarfed by the GHG Life Cycle
Assessments performed by a few
companies, which shows that most
of the carbon footprint of the sector
actually lies in the emissions related to
the use of the products by customers
and the purchase of (agricultural and
chemical) raw materials. Indeed,
86% of total emissions reported in
the sector are Scope 3 emissions “Consumer use and
(e.g. Unilever: 150 mtCO2-e, Nestlé: disposal of products
51 mtCO2-e; Reckitt Benckiser:
25mtCO2-e). Unilever therefore believes may reach between 30
that awareness campaigns directed at and 60 times as much
customers is a key component for its as our own emissions,
carbon mitigation action. depending on the
HFC gases (high global warming assumptions made
potential greenhouse gases) are about how consumers
also a specific issue for the sector, use our products.
especially for retailers, since leakages
of refrigerant gases account for up to
61% (in the case of Delhaize) of their …
direct emissions. Most companies
aim to reduce refrigerant losses
and are gradually switching to other The Cleaner Planet
environmentally friendly refrigerants
(e.g. CO2-based refrigeration systems Plan, which is being
in all new Tesco’s stores in the UK in rolled out across our
2010/11), as the Montreal Protocol Omo, Persil and Surf
requires a global phase-out of the brands, is a behaviour
production and use of such refrigerants
by 2030 (at the latest). Nestlé warns change programme that
of potential difficulties to implement educates consumers on
natural refrigerant in a number of how to do their washing
countries though.
in a resource-efficient
Along with efficient lighting, insulation fashion.”
and energy recovery measures,
retailers plan to decrease their carbon-
intensity per square meter of sales area Unilever
by 1.6% to 4.7 % annually (chart 20 for
comparative assessment).
Figure 20: Comparison of carbon-intensities of retailers
* The methodology may vary across
600 Food & Staples Retailing Multiline Retail
companies. For Tesco, group’s total
carbon emissions are accounted for
while other companies limit the scope
to carbon emissions at stores.
500
400
300
200
100
0
kgCO2/m2 sales area 2009
J Sainsbury Plc
Koninklijke Ahold
Delhaize Group (CR)
Carrefour
Tesco**
Metro
Marks & Spencer
41
Sector Specific Analysis

Risks and opportunities • The development of agrofuels

Danone sees “Major Compared to other industries in the could adversely impact on the
opportunity to gain sector; Food, Beverage & Tobacco availability of lands for other
companies consider themselves much agricultural raw materials. This
market share thanks to more at risk both of climate change could lead to supply pressure and
a better performance regulations (100%) and of the physical potential price increases.
on CO2 (mainly CO2 impact of climate change (92%).
claim, milk/methane • Changes in consumer demand
Regulatory risks commonly mentioned towards greener products further
claim, packaging are: driven by product labelling
claims…)” and highlight obligations also pose a risk.
for example “The bio • Cap & trade risk: 10 companies Danone is confident that the extra
have sites regulated under the EU cost of bio packaging on its dairy
packaging on the dairy ETS and raise the risk of higher brand can be recovered thanks to
brand has an extra cost carbon costs post-2012. Financial gains in market share.
of €25/tonne, €5m/year implications are limited, notably as
cost increased on the activities concerned can be eligible In terms of the physical risks from
for free CO2 rights by 2020 (e.g. climate change, all companies in
brand European Scope sugar manufacturing) and as the the industry, except Carlsberg are
(1.5% volume growth amounts of emissions at stake also concerned that a change in
needed to pay back). are fairly low (maximum 1mtCO2e precipitation patterns, leading to floods
The business return reported by Associated British or droughts, could alter the availability
Foods). of clean water (a key element for beers,
of these investments soft drinks, etc) and increase the price
has been for the first • Higher energy prices or carbon of raw materials (due to reduction in
time confirmed this taxes could significantly raise yields) and agricultural raw material
year in consumer tests logistics and packaging costs. shortages. To mitigate such risks,
SAB Miller, for instance, sees a companies are working on increasing
with very promising potential risk in the indirect impact the water efficiency of their process,
consumer results in from packaging related CO2 taxes, diversifying or securing a continuous
a test run in France, such as those in place in The supply of key raw materials (e.g. coffee
Netherlands. for Nestlé, barley for AB InBev) through
the UK, Belgium and specific programmes.
Germany on renewable
packaging (50% CO2
reduction claim). “In order to assure the
This will need to be continuous supply of its
confirmed in real life.” main commodities, one
of the initiatives Nestlé
has in place is working
“In 2009, the company with suppliers, providing
used 8.5% less water training and technical
per hectolitre of assistance… Cocoa
production than in 2008, supply is becoming
and has decreased increasingly critical.
water use per hectolitre With farmer training,
of production 14.5% Nestlé is helping farmers
since 2007.” increase yields, reduce
disease and produce a
better quality crop which
AB Inbev
attracts higher prices.”

Nestlé

42
Energy
The Energy sector contains 15
companies, which belong to two
industries: Oil, Gas & Consumable
Fuels (11); and Energy Equipment &
Services (4).
Disclosure highlights
Companies in CDLI: Royal Dutch Shell
Companies with an A performance
band: Royal Dutch Shell; ENI; Repsol
YPF
Largest non-respondents by market
capitalisation: Tenaris; Galp Energia;
Technip
Emissions profile
There is a clear lack of transparency on
carbon issues in the Energy Equipment
& Services industry, as companies
have either not responded to the
CDP questionnaire or have asked for
their answer not to be made publicly
available.
Predominance of Scope 3
emissions
The bulk of the sector carbon footprint
lies in CO2 emissions from the use of
products (5 to 11 times higher than
direct emissions). These estimates
are based on different methodologies
though (e.g. production vs. sales of
petroleum products or different sources
of emission factors used), which
does not allow for direct comparison
between companies. Statoil is the
only integrated Oil & Gas company
that does not disclose an estimate for
such emissions. Pending a harmonised
methodology in this field, the upstream
mix of natural gas and crude oil
production is the best indicator,
providing a view on the carbon-
intensity of the products sold. RD Shell
states that “by around 2012 [they] will
A patchwork of metrics in carbon-
intensity reporting
When reporting on carbon-intensity
indicators, companies use widely
different metrics (e.g. tonnes of
throughput versus output, barrel of
oil equivalent versus tonne), as well
as different boundaries (total group,
by division, distinction of oil and gas
extraction activities, and so forth).
This prevents any direct consistent
comparison between companies.
Generally, companies have not set
emissions reduction targets based on
carbon-intensity indicators, but rather
seek absolute emissions reductions
or improvements in energy efficiency.
Although BP has no official CO2
reduction target, it tracks emission
reductions through efficiency projects
(7.9mtCO2e since 2002). On the other
hand, Statoil states that it has achieved
its emissions reduction target, but
does not disclose any figure or
timescale. Emissions reduction targets
are relatively low, requiring emissions
cuts of 0.3% (RD Shell) to 1.6% (BG)
p.a. In years to come, most emission
reductions in the sector should come
from ENI and Total’s flaring down
plans.
Figure 21: Upstream energy mix of oil & gas companies in 2009
100
80
60
Gas flaring
ENI remains a large flarer in 2009
(ca.13mtCO2e), but the company
delivers well on its target to cut gas
flaring by 70% over 2007-2012
(ca. half of the reduction effort was
achieved at end 2009).
Risks and Opportunities
All companies consider that several
types of climate change regulations
create significant risks for their
business. All energy companies
have ended 2009 with surpluses of
emission rights (except Statoil and
BP), but direct carbon compliance
costs are expected to increase under
the EU ETS. Total estimates that the
benchmark allocation method starting
in 2013 may hand out “only 70 to 80%
of required allocations” to installations
in the sector. ENI prepares for turning
to a shortage of CO2 emissions rights
as soon as 2011.
Gas
Conventional
Other

be producing more gas than oil”.

40

20

0
ENI

Total

OMV

Cairn Energy

BG Group

Tullow Oil

43
 Sector Specific Analysis
“In Europe, according to
preliminary estimates,
our concerned exposed
sectors may received
only 70 to 80% of their
required allocations for
the third period of the
EU ETS, beyond 2012;
this may represent
an additional charge,
according to market
price, from €1bn to
€1.6bn by taking into
account a cost of €25
per tonne of CO2 for the
2013-2020 period.”
Total SA
Figure 22: Estimates of potential CO2 costs in 2013 under the EU ETS
BG BP OMV
0 0.0
Estimated EU ETS costs for 2013
-50
-100
-150
-200
44
All else being equal, based on EU ETS
data disclosed by companies and
assuming a 30% shortage of emission
rights over 2013-2020 and a CO2 price
of €25/tCO2, estimates of annual CO2
compliance costs in Europe, starting
in 2013, range from €24m (BG) to
€181m (Total SA), with OMV the most
financially exposed with 1.8% of its
EBITDA 2009 appearing at risk (see
figure 22 below).
Other commonly cited regulatory risks
are:
• Reduced demand for their products
as carbon caps apply to their clients
(e.g. airlines, international shipping),
• Increased costs to comply with
renewable fuel mandates; low
carbon fuel standards; and energy
saving certificates applying to their
portfolio of products and services;
and
• Tightening control on flaring and
venting in emerging countries.
Repsol YPF Royal Dutch Shell
Opportunities: Products helping to
reduce emissions
Within the Oil, Gas & Consumables
industry, all companies but Tullow Oil
and Cairn Energy consider that their
products can reduce emissions of their
users in:
The Transportation sector:
The blending of biofuels; the
commercialisation of Compressed
Natural Gas and LPG as transport
fuels; and the use of fuel economy
petroleum fuels and lubricants can
reduce the carbon footprint of vehicles.
Industries: Providing access to natural
gas or renewable energies can replace
the use of higher carbon fuels.
Buildings: The use of monomers and
polymers produced by petrochemical
plants as insulation materials can
reduce energy consumption, hence
carbon emissions of buildings.
The estimates of absolute emissions
cuts achieved thanks to the use of
such products remain relatively low. For
instance, “In 2009, Repsol YPF sold
68,625 metric tonnes of [LPG] fuel,
which implies a 35,706 metric tonnes
of CO2 emission reduction compared
to the emissions, which would have
been caused by the equivalent diesel
use”.
Total
as a % of EBITDA 2009
-0.5
-1.0
-1.5
-2.0
Regarding investments made in
alternative energies, BP seems to
invested the most, with US$4 billion
spent at end 2009 and has made
investments in all main alternative
energy areas. Other companies are
more selective and concentrate on
technologies selected for their strategic
fit and/or economic opportunities.
In general, financial contributions to
alternative energy projects compared OMV “supports the use
to company results are insignificant. of compressed natural
For instance, renewable energies made
a €20.7 million financial contribution to gas as a transport fuel
Repsol YPF group EBITDA in 2008 (i.e. due to its significant
0.3%). advantages: up to 15%
fewer CO2 emissions.”

Table 13: Involvement in alternative energies and technologies by European oil majors

Biofuel Solar Wind CCS Hydrogen Investments

(production)
BP $45-million Unit sales of Portfolio Focus on large 2 hydrogen > $4 billion in
investment in a 203MW focused in the scale projects power Alternative Energy
JV which plans US. Additional projects since 2005, in line
to construct capacity in with commitment
lignocellulosic 2009 to invest $8 billion
bioethanol by 2015.
production facility
Total Explores new Develops Project in Lacq now
avenues for the positions in full course
future, particularly particularly in PV
based on solar, emphasising
agricultural waste technology and
and ligno-cellulosic know-how,
sources without unduly
compromising
economic
requirements.
RD Signed a non- LoI signed by Natural gas will be
Shell binding MoU with Alberta and central to a low-
Cosan in Brazil Canadian carbon energy
to form a JV to governmnet to future.
produce ethanol provide funding of
from sugar cane, CA $865 million to a
the lowest-CO2 project to store over
biofuel 1 mtCO2 a year
Statoil Focus on First company Investing around
offshore wind: to store CO2 in a NOK 400 million
building a 315 geological formation in the pilot
MW offshore offshore (1996). floating offshore
wind farm in Engaged in 3 of 4 wind turbine
a $1.7 billion worlds biggest CCS (construction &
joint venture projects R&D)
Repsol Continued
YPF evaluating the
feasibility of CCS
technologies in its
refineries, as well
as the associated
costs.

45
Sector Specific Analysis

Disclosure of exposure to extreme

“...because they could climate events
deliver substantial All Oil & Gas producers, except BP,
consider that the physical impacts
reductions in CO2 of climate change can create a risk
and because of their for their business. Companies were
close fit with our fuels invited to disclose the value of net
business, transport asset exposure to extreme weather
events by country in a specific sector
biofuels will increasingly questionnaire. Only ENI, Repsol YPF
be the priority area for and Cairn Energy provided information.
our renewable energy For instance, Cairn has US$250 million
of assets in Bangladesh and Repsol
spending. We are ca.€460m of assets in Trinidad &
serious about trying Tobago. “Eni’s production in [sensitive]
to build a substantial areas represents 8% of the total
business in biofuels. production of the company in 2009”,
but the company states that “in case
This involves both of offshore floating production units,
building capacity in the risks of extreme weather events are
sustainable current reduced via quickly releasable Floating
generation biofuels Production, Storage and Offloading
(FPSO) vessels”. Total considers that
and investing in they “don’t have any key assets in
technologies…” countries exposed to major weather
events.”

RD Shell

46
Financials
The Financials sector is made up of 72
companies in three industries: Banks
(35 companies); Diversified Financials
(13); and Insurance (24).
Disclosure highlights
Companies in CDLI: RBS (93); HSBC
(92)
Companies with an A performance
band: Barclays; HSBC; Munich Re;
RBS; Swiss Re; UBS
Largest non-respondents by market
capitalisation: Groupe Bruxelles
Lambert; Sampo Group
Emission profile
The main source of carbon emissions
in this sector is from the purchase
of electricity, heat and cooling. This
remains a single digit figure (8mtCO2e).
The sector has been good at
reporting Scope 3 emissions (87% of
respondents), but the figures provided
are low (2mtCO2e reported) and
correspond mostly to business travel.
The main carbon emission reduction
efforts are energy-efficiency measures,
the use of zero-carbon electricity,
the reduction of business travel and
offsetting. Targets are often defined in
tCO2e/employee.
The exposure of investment banks to
carbon risks through their investment
portfolios is certainly a higher concern
for investors. Although risks, such as
default risk for loans or equity valuation
are clearly identified by most and are
seen as bearing materiality. Banks and
Insurers’ specific exposure to carbon
sensitive sectors remains poorly
detailed.
To mitigate such risks, carbon risk
assessments are carried out during
the credit/investment analysis process,
especially for counterparts in energy-
intensive industries. Dexia remains the
only company to have set a target on
the carbon-intensity of its portfolio of
power generation projects: “In 2009,
the carbon intensity of the portfolio of
projects for producing electricity and
heat of Dexia was 0.330tCO2/MWh.
We aim to reach 0.316tCO2/ MWh by
2013”.
Risks and opportunities
Green products: 60% of respondents AXA UK’s “Green
estimate that they propose products Homeowner policy
or services which help clients avoid
or reduce GHG emissions, usually entitles customers to
through modified behaviours. Singling make environmental
out the Banks industry, the result is claims by upgrading the
much higher (77%). energy consumption
Among the services described, we profile of their electrical
find: financing or leasing of renewable appliances in case of
energies and energy efficiency equipment loss. Green
projects; participation in carbon funds rebuilding even applies
or monetisation of carbon credits;
bookrunning on share offerings; to large damage claims
carbon finance; leasing and promoting where the majority
green cars; thematic equity funds with of the property is
an environmental filter; “eco” loans
(sometimes at discounted rates); and
damaged by an insured
“eco” bonds. event.”
Insurers also provide specific
insurance products for green cars;
homes and buildings; carbon credits; “Since 1998 RBS has
and renewable energies, as well as financed over 8,800MW
Life & Savings products integrating
environmental, social and governance of installed wind
(ESG) screening strategies and risk generation capacity
prevention services. These activities globally.”
tend to support the development
of new environmental technologies,
reduce certain types of risk exposures Royal Bank of
and generate premiums (e.g. €17.6m Scotland
generated by Mapfre in 2009 for wind
farms and solar photovoltaic panels
insurance).
Generali warns that “the application of DnB NOR “offers
discounts to incentivise eco-friendly loans at a discounted
choices implies lower margins in
some cases” but sees more long-term interest rate for new
benefit (such as customer loyalty, green and second-hand cars
brand value). which meet certain
emission criteria.
The contribution of these services
remains fairly limited at company level. Volumes, however, are
Direct equity investments in companies still insignificant but
active in renewable energies and the product can be
carbon offsetting services are among seen to make a notable
other activities mentioned.
contribution in the
Insurance of weather hazards: future.”
The Financials sector considers
itself relatively more exposed to the
effects of climate change, both in
terms of opportunities and risks.
This is especially true for Insurance
companies, as 90% of them see
significant risks for their business
due to the physical impact of climate
change and 76% of them consider
business opportunities. As a result,
certain insurers have increased
47
Sector Specific Analysis

their research expertise (e.g. the preventative solutions aiming to limit

“Under capital €100 million “AXA Research Fund”
allocation in respect supporting academic research), as well
as signing up to collaborative initiatives,
of general insurance such as the UNEP FI Insurance
risk of claims from Working Group or the Geneva
catastrophic events, Association’s “Kyoto Statement”, which
such as windstorm commits insurers to enhance research
and develop adapted products and
or flooding, our total services.
potential loss from our
most concentrated Risks: Banks stress potential risks to
exposure (northern their loan books, in the case of climate
risks damaging the creditworthiness
European windstorm) of their clients, especially in sectors
is approximately £335 sensitive to climate change, or damage
million for a one in the value of the collateralised assets.
ten year annual loss Insurers obviously consider a direct
scenario, compared exposure through their property and
with a £620 million for casualty (P&C) re-insurance business.
a one in hundred year
Weather-related events accounted for
annual loss scenario.” 85% (€22bn) of the total loss incurred
by the global insurance industry and
climate change is seen as a catalyst
Aviva for increased frequency of extreme
weather events. Munich Re, among
others, considers that the impact can
go beyond the P&C business line
Swiss Re “anticipates and also sees indirect impact on life
growing demand for and health business lines (through
premature deaths). The Solvency II
catastrophe covers as a regulatory framework - an updated
result of changes in the
set of regulatory requirements for
climate and increased insurance firms that operate in the
climate variability. The European Union is scheduled to come
into effect on 31 December 2012.
financial opportunity in This will require insurers to account for
the amount of the claims (e.g. flood-
resilient repairs).
Opportunities: The weather related
insurance coverage was 55% and
6.7% respectively in developed and
emerging countries (see figure 23).
The higher frequency and severity
of national catastrophe is seen as
a trigger for increased demand for
insurance coverage, although Swiss
Re recognises that tapping into this
market will require considerable
resources. Products, such as
natural catastrophe insurance and
reinsurance, national catastrophe
bonds, weather derivatives and
weather index insurance could benefit
from an increasing demand for flood
and crop protection insurance. Swiss
Re seems particularly well positioned
with a 30% global market share in
weather and weather contingent
commodity structures.
Figure 23: Total and insured
weather-related natural
catastrophe losses in 2008
200

this context is related climate exposure in a proper economic

to potential premium evaluation of risks and reinsurance
growth from traditional needs.
and new products To mitigate such risks, companies
150

designed to help in the are investing in research to better

management of climate understand the potential consequence
of climate change (risk of floods, for
risk.” instance) in order to integrate changes
in risks in their underwriting and to 100

adapt their pricing and consequently

their risk management frameworks.
Some companies propose more
50

Developed countries Emerging countries

Total weather related natural catastrophe losses

Insured weather related natural catastrophe losses
Source: Swiss Ré
48
Health Care
The Health Care sector is composed
of two industries: Pharmaceuticals,
Biotechnology & Life Sciences
(10); and Health Care Equipment &
Services (5). There are a number of
key companies that did not respond
to the questionnaire in this sector; four
companies equally divided in each
industry.
Disclosure highlights
Companies in CDLI: Novo Nordisk (89)
Companies with an A performance
band: Novo Nordisk
Largest non-respondents by market
capitalisation: Synthes Inc.; Sonova
Holding AG; UCB Cap; Smith &
Nephew
Total GHG emissions Scope 1:
3.1 mtCO2e
Total GHG emissions Scope 2:
3.7 mtCO2e
Emission profile and carbon
mitigation actions
GHG emissions are relatively low in
this sector. But note worthily, GSK
generates high Scope 3 emissions,
due to the distribution of specific
goods, such as asthma inhalers
containing HFC, a propellant gas.
Since the Montreal Protocol placed
restrictions on such substances, the
group developed dry powder inhalers
to substitute this product. Emissions
also come from the waste generated in
operations.
Risks and opportunities Business opportunities are anticipated
Risk and opportunities are mostly by Novartis “as a rise in global
identified by the Pharmaceuticals, temperatures and changing climate
Biotechnology & Life Sciences patterns will influence the spread of
companies, whilst for the Health Care tropical and other vector diseases”,
Equipment & Services industry, climate for which more medical treatments
change is not a key issue that they are will be needed. Change in consumer
currently tackling. demand also pave the way to new
chemical products, such as the
With production sites and activities in applications developed by Merck for
all major regions of the world, Novo the Automotive & Components industry
Nordisk along with Merck and GSK “to improve the performance of lithium-
dread the implementation of enlarged ion batteries, thereby significantly
carbon cap and trade systems. increasing the range of electric
Fuel/Energy taxes also represent a vehicles” and on the Photovoltaic
important issue for Novo Nordisk due technology through significant
to Transportation activities, which efficiency reached on solar cells to
represent half of the company’s CO2 become a mass product.
emissions in 2010 (car fleet, product
distribution and business travel). If new
national green taxes are set, “Novo
Nordisk has estimated the effect of
these changes will amount to an extra
cost of 40 million DKK worst case
annually corresponding to a 16%
increase”.
Pharmaceuticals, Biotechnology &
Life Sciences companies point out
uncertainties arising from climate
change effects: “There is a great
degree of uncertainty around the
relationship between climate change,
health and healthcare provision and
it is therefore difficult to determine
whether the net effect of climate
change-related events result in risks
or opportunities for GSK nor to what
extent these risks or opportunities may
be significant to GSK’s performance”.
The group evaluated the value of
new markets associated with climate
change-related events at more than
£100 million.
49
Sector Specific Analysis
Industrials
“Buildings account
for approximately 40 The Industrials sector contains 49
companies, which belong to one of the
percent of the world’s three different industry groups: Capital
energy consumption, Goods (33 companies); Commercial
and elevators and & Professional Services (5); and
escalators can account Transportation (11).
for 2-10 percent of Disclosure highlights
a building’s energy Companies in CDLI: Siemens (98);
consumption.” Deutsche Post (97); Ferrovial (89);
Saint-Gobain (89)
Kone Companies with an A performance
band: Deutsche Post; Ferrovial; Rolls-
Royce; Siemens
Largest non-respondents by market
“While motor-driven capitalisation: Autoroutes Paris Rhin
applications consume Rhône; Safran; Ryanair
two-thirds of electricity
in industry and one- Emissions profile
The carbon footprints of the three
quarter of all the industry groups in this sector are
electricity used in the highly contrasted. The Commercial
world, drives control & Professional Services sector has
fewer than 10 percent a low carbon footprint (0.4mtCO2-e
reported only). Direct emissions are
of the motors. Many predominantly in the Transportation
small applications industry group, mostly due to marine
have no form of speed and air carriers, but reporting of Scope
3 emissions is extremely light (only TNT
control at all.” and Deutsche Post report emissions,
due to subcontracted services),
although one can suspect that this is
ABB a significant aspect of the industry’s
carbon footprint. Indeed, VINCI
states that: “the use of motorways is
responsible for 96% to 99% of the life
“Our Environmental cycle of a motorway” and VINCI is the
Portfolio has grown by only company to provide an estimate
of the emissions from its clients on the
11% by comparison highways it operates.
with fiscal 2008 and
already accounts for In the Capital Goods industry group,
about 30% of our emissions due to power consumption
prevail except for construction and
total sales. Our goal engineering companies. Again, only
is to generate €25 three companies propose an estimate
billion in revenue from of the emissions due to the use of their
products and solutions products. Capital goods companies
prefer to communicate on how many
for environmental and carbon emissions are saved thanks
climate protection by to their products. The installed base
fiscal 2011”. of Vestas’ wind turbines, ABB drives
and Siemens’ diverse products
and services are estimated to save
Siemens respectively 163, 140 and 210 million
tonnes of CO2-e annually.
50
Risks and Opportunities
The Capital Goods companies
consider climate change policies, such
as efficiency standards for buildings
and cars as an opportunity (87%
of companies), rather than a threat
(57%). These companies are perfectly
aware of the role they can play in
helping their clients to reduce their
energy consumption, as 90% of them
consider that their products or service
help their clients to reduce their carbon
emissions. Capital goods companies
provide various equipments and
services with applications in the most
carbon-intensive economic sectors,
such as buildings, transportation,
power and industry (table 14). R&D in
carbon saving technologies is seen as
an important component to maintain
competitiveness. In 2009, Siemens
dedicated 1.3% of its revenues to
R&D in eco-friendly technologies.
Despite the economic downturn, ABB
increased R&D spending by 5%. New
generations of products are from 12%
up to 50% more energy-efficient.
While Vestas’ core business is the
production of renewable equipments,
Siemens is positioned to capture the
opportunities coming from the demand
of products with a low carbon footprint
in all market segments thanks to a
diversified portfolio of products and
services. ABB also states that 45% of
its revenues are generated from the
demand for energy efficiency. Some
companies build up their capacities
to seize opportunities in identified
low-carbon markets (e.g. Rolls Royce
created a new business in 2008 to
address the global market in civil
nuclear).
Table 14: Product portfolio of capital good companies helping their clients or end-customers to reduce
their own carbon emissions

Markets
Company Power & Industry Transportation Building Products and services helping clients to reduce their carbon emissions

EADS   X   A380 - aircraft the less fuel demanding of its category

Finmeccanica X X   Power: Ansaldo’s fuel cells for Carbon Capture & Storage. Highly efficient gas turbines.
Rolls-Royce X X   Airlines: Next Trent engine generation some 12% per cent more fuel efficient than previously.
Marine: Hybrid electric drive system
New business unit launched in 2008 to address the global market in civil nuclear power.
Marine: improved propulsion efficiencies of around 10-15 per cent. Gas engine producing up to
20 per cent less CO2 than an equivalent diesel engine
Thales   X X Lighter cockpits for aircrafts (next A350) and work on optimisation of kerosene consumption.
Innovative ticketing machines for public transport, less 70% electricity consumption
Geberit   X Stand-by electricity consumption of the Geberit AquaClean has been reduced by more than
half
Saint-Gobain X X Holds 20% of the world’s market for photoelectric glass. Aim to generate € 2 billions between
by 2015. Insulation products, mainly based on glass wool or rock wool; double or triple glazing
Acciona X X X One of the largest wind power developers. Road: biofuel production and search for alternatives
to road freight. Energy solutions for sustainable buildings through the use of renewable
technologies
ACS X   Electricity production from renewable sources
Ferrovial   X X New departure procedure for A380s at airports subsidiary saves 300kg of fuel per flight. New
product named “Green refitting” (Ferrovial Agroman)
Skanska   X Buildings exceeding national building codes and voluntary certification schemes
Vinci X X X Wind farm infrastructure project. OKIGO car-sharing system: fleet emits an average of
111gCO2/km.New building: eco-label “Oxygen”. Old building: maintenance and energy
performance services
Schneider X X Power monitoring, Industrial automation and control, low and medium-voltage distribution.
Electric Energy management solutions (Ecostruxure). Lighting systems. Solutions sales counted for
30% of revenues in 2008. Targets 2/3rd of products’ revenues achieved with Green Premium
products in 2011
Vestas X   Pure wind turbines producer
Alstom X X   World leader in hydro power plants, and also present on the wind and solar businesses.
Efficient fossil power plants. Carbon Capture & Storage (10 pilot plants). Leading position
worldwide in high-speed rail technology. Expertise in urban transport systems.
Orkla X X   Strategic investments in solar companies Elkem Solar and REC. Borregaard subsidiary: leading
producer of wood based chemicals, including biofuels. Aluminium allows lighter vehicles
Siemens X X X Efficient fossil power generation. Renewable Energy Division (wind, solar thermal): €2.935bn of
revenues. Smart-grid. Energy-saving motors, energy recovery, energy management (incl. data
centres) Rail technologies: e.g. automation and electrification. Lighting (OSRAM subsidiary)
ThyssenKrupp X X X Wind turbines components. InCar project with automakers: potential to reduce CO2 emissions
per km by up to 17.63g. Regenerative drives and motor efficiency controllers for elevators
solutions.
ABB X X Leading supplier of products and systems to onshore and offshore wind power. Three phase
solar inverter technology launched in 2009. Power grid: HVDC (high voltage direct current) .
Energy-efficient variable-speed drives controlling the speed of machinery, pumps, mixers, fans
and compressors. Advanced industrial information technology for the control and optimisation
of integrated systems
Atlas Copco X X   Oil-free air compressor with built in energy recovery. Intelligent control systems with energy
savings of up to 25 %.New asphalt rollers, used in road construction projects, 24 % less fuel
consuming compared to already fuel efficient predecessors
Kone   X In 2009 KONE released a range of elevators which reduced energy consumption by 30 percent
compared to previous volume models.
MAN X X   Diesel engines. Trucks engines and eco-driving training: up to 15% fuel savings. Marine: diesel
engines
Sandvik X X   Efficient tubes for furnaces. Cemented-carbide components reduces fuel consumption in in
automotive engines using fuel injection.
SKF X X   Exposure to the wind energy market. New family of bearings 30% more energy efficient
compared with standard products. Energy services. New family of energy efficient bearings
consuming 30% less energy than standard ISO products
Vallourec X X   High quality tubes for nuclear. Lighter tubes

51
Sector Specific Analysis

Information Technology Risks and opportunities

“Preliminary analysis IT companies are generally
indicates that SAP’s The Information Technology sector less concerned (compared to
contains 3 industries: Semiconductors Telecommunication Services
product use phase & Semiconductor Equipment companies) of the impact of the
(data centres, servers, (2), Software & Services (3) and potential EU regulation on the
etc.) has 100 times Technology Hardware & Equipment (3). energy efficiency of Information &
more impact than SAP’s Communication Technologies. Ericsson
Disclosure highlights even considers it is “well positioned
own operations and Companies in CDLI: Nokia Group (91) to comply with any regulatory
that the CO2 footprint requirements related to energy
of our customer base Companies with an A performance efficiency if/when such emerge. [The
band: Nokia Group company] believes this readiness will
(power sector, oil & gas, result in a competitive advantage in the
chemicals, consumer Largest non-respondent by market marketplace.”
products, etc.) is 10,000 capitalisation: ASML Holding
greater than that of SAP, All IT companies see regulatory
Total GHG emissions Scope 1: opportunities and the possibility to
indicating that SAP has 0.7 mtCO2e address the needs of their clients
the ability to influence to reduce their carbon footprint.
1/6 of global CO2 Total GHG emissions Scope 2: New consumer segments have set
emissions.” 2.2 mtCO2e sustainability and climate change as
key purchasing criteria. Ericsson, STM
Emission profile and carbon and Nokia are commonly aware of
SAP mitigation actions this competitive advantage on energy
The IT sector has extremely low monitoring products, particularly
direct emissions (<1mtCO2e). Most for “home appliance (i.e. lighting),
of sector’s carbon footprint lies in the automotive (i.e. Stop & Start systems),
emissions due to the use of products industrials, etc.” as highlighted by
“With our experience by Communication Equipment STM. Also, travelling, transport and
in telecom applications companies. Nokia, for example, works logistic optimisation can emerge from
to create solutions on tackling the “non-load” energy the IT sector applications. Indeed, an
aimed at the evolving waste of phones kept connected to the estimation completed by STM reveals
receptacle. It is working on innovative that “for the automotive market only:
smart grid and smart solutions to manage this issue using use of our products in 2009 have
metering markets. renewable energy: “Several mobile reduced the fuel consumption by
We enable utilities device chargers in the market already 13,000,000 barrels equivalent to 22
to monitor real time operate with solar power, cranks or TWh”. SAP also pointed out “process
even wind mills”. Ericsson’s Life Cycle automation” opportunities, notably
usage, to inform and Analysis of the total CO2 emissions for among the value chain, as it represents
influence consumers a GSM mobile subscriber emphasised: the majority of its consumer’
to be more energy “The importance of design decisions operations and emissions: “Much
for products that will operate for a long of the data needed to identify and
aware and to consume life time”. act on business resides in core SAP
energy more efficiently. systems”.
Our smart grid / smart
metering applications
enable utilities to launch
flexible tariff patterns,
providing a financial
incentive to consumers
to reduce their usage at
periods when the cost
of electricity production
peaks.”

Alcatel-Lucent

52
Materials
The Materials sector contains
32 companies from four different
industries: Chemicals (12);
Construction Materials (4); Metals
& Mining (14); and Paper & Forest
Products (2).
Disclosure highlights
Companies in CDLI: BASF (96); Bayer
(95); Lafarge (94); UPM-Kymmene (90);
SCA (90); and Rio Tinto (89).
Companies with an A performance
band: BASF; Bayer; Lafarge
Largest non-responders by market
capitalisation: Eurasian Natural
Resources Corporation; Kazakhmys;
Vedanta Resources; Eramet
Total GHG emissions Scope 1:
547 mtCO2
Total GHG emissions Scope 2:
156 mtCO2
Emission profile
The Materials sector is the 2nd largest
emitter of direct carbon emissions
(547mt CO2e) after Utilities. The sector
is also characterised by a high diversity
of GHG types with nitrous oxide (N2O),
emitted by fertilisers businesses of
chemicals companies and methane
(CH4), emitted by mining companies,
for instance. Industries in the sector
are large consumers of electricity and
heat, as suggested by relatively high
Scope 2 emissions in Chemicals,
Metals & Mining, as well as Paper &
Forest products industries (which are
the largest consumers overall).
18 companies report on some Scope 3
emissions, which amount to ca.900mt
CO2e. This mostly comes from a few
mining companies and BASF oil & gas
subsidiary reporting on the emissions
related to the use of their production of
fossil fuel (e.g. coal, gas, oil) or iron ore.
Other sources of Scope 3 emissions
come from purchased goods, as well
as the disposal of sold chemicals
products at the end of their life.
Chemicals companies are particularly
ambitious, with challenging carbon
reduction targets, especially
companies involved in the Fertilizers
& Agricultural Chemicals business.
Syngenta, for instance, has a target
to reduce its carbon-intensity by
40% (relative to the financial metrics
Earnings Before Interest and Taxes)
over 2006-2012 and has so far
achieved 18% of the effort. This can
be due to the fact that more radical
emissions cuts can be obtained with
N2O destruction measures, compared
to energy efficiency measures. Akzo
Nobel’s emission reduction target
also applies to supply chain related
emissions (Scope 3). Also worth
highlighting, cement producers
Lafarge, Heidelberg and Holcim have
all achieved their emission reduction
targets for 2010 ahead of schedule.
Holcim is the only one to have set a
new target for 2015.
53
 Sector Specific Analysis

Table 15: Comparison of carbon-intensities and reduction targets of materials companies

Carbon- Unit (kg CO2e / ) Trend Reduction target Comment

intensity y-o-y (%)
2009
Metals & Mining
Antofagasta 2,160 / ton of fine copper 0% No target Negative trend is expected
Arcelor Mittal 2,240 / ton of output 3% 8% over 2007-2020 Intensity 5% above base year
Norsk Hydro 1,850 / ton of primary aluminium -13% 17.8% by 2013 Scope 1, electrolysis process, only
Rio Tinto N/A (Group index) -7.5% 10% over 2008-2015 7.5% achieved
Chemicals
Akzo Nobel 273 / ton of output 10% by 2015 Target includes Scope 3 supply
chain
BASF 915 / ton of sales product N/A 25% over 2002-2020 Chemical business only
Bayer 930 / ton of output different 25% over 2005-2020 (Bayer Material
scope Science). Other divisions: absolute targets
DSM 830 / ton of output -2% 25% over 2008-2020 (absolute emissions)
K+S 66 / ton of product 50% over 2008-2014, excl. Morton Salt
Syngenta 1 / $EBIT (scope 1,2,3) 1% 40% over 2006-2012 18% achieved
Building materials
CRH 686 / ton of cement -6% 15% over 1990-2015 8% achieved
Heidelberg Cement 634 / ton of cement 15% over 1990-2010 Achieved (19%)
Holcim 597 / ton of cement * 25% over 1990-2015 21% achieved
Lafarge 614* / ton of cement * 20% over 1990-2010 Achieved (20.7%)
Paper & Forest products
SCA 90,000 / full-time employee 20% over 2005-2020 (per tonne of output)
UPM-Kymmene 570 / ton of paper produced Stable N/A

* Cement producers have changed the methodology applied to calculate carbon-intensity compared to CDP 2009 and have
switched to net specific emissions per tonne of cementitious material as advocated by the WBCSD Cement Sustainability
Initiative. The figure for Lafarge is taken from company’ publicly available Sustainable Development report to ensure comparability.

Figure 24: Percentage of direct emissions regulated under the EU ETS

SCA 58%

UPM-Kymmene 55%

Bayer 50%

Akzo Nobel 32%

BASF 26%

Lafarge 18%

DSM 16%

Holcim 12%

Anglo American 10%

Rio Tinto 10%

Syngenta 9%

BHP Billiton 1%
0 10 20 30 40 50 60

% of direct emissions regulated under the EU ETS

54
 Risks and opportunities:
All responders in the sector, except
Wacker Chemie, K+S and Givaudan
believe that their business is at risk
of climate change regulations and
primarily cite the EU ETS and other cap
and trade carbon regulations currently
discussed in the US, Canada, Australia
and New Zealand, but also in emerging
countries (e.g. India, China).
The two paper companies and
Bayer have the highest exposure to
the EU ETS with more than 50% of
their direct emissions capped by the
EU regulation. Due to their global
operations, building materials, as well
as metals and mining companies are
relatively less exposed.
Figure 25: Positive impact of surpluses of emissions rights in 2009
12
10
8
6 2.0
4
2
0 0.0
Lafarge
Holcim
UPM-Kymmene
DSM
BASF
Surplus of emission rights in 2009 (left-hand scale)
As a % of EBITDA, if valued at EUR13/t (right-hand scale)
Windfall effect of emission • The expansion of the scope
surpluses continued in 2009 of the scheme to non-CO2
In 2009, reduced production volumes gases: More chemicals activities,
in Europe have allowed materials such as the production of soda
companies to end the year with at ash, hydrogen and nitrogenous
least 21.6 million of emission rights fertilisers, as well as aluminium
surpluses under the EU ETS, two- production (Hydro) will fall under
thirds of them falling in the hands of the scope of the EU ETS. BASF
the two cement companies: Lafarge therefore expects that “from 2013
and Holcim (cf. figure 25). Arcelor on, between 75% and 90% of [its]
Mittal and Heidelberg Cement do not EU GHG emissions i.e. roughly 50%
disclose their surpluses of emissions of [its] global GHG emissions will
rights, although one can suspect them be included according to current
to be significant given the depressed resolutions”. This is more than twice
production volumes in Europe in than in 2009.
2008/2009 due to the economic
recession. • The shift to an allocation system
based on sector benchmark
However, this is set to come to an of CO2 efficiency: While most
end with phase 3 of the EU ETS industries are eligible for free
(2013-2020). Although, the CO2 costs emission rights post-2012, in order
related to the EU ETS are set to further to protect their competitiveness,
materialise over 2013-2020 due to: only plants operating with the best
CO2 efficiency standards will get
100% free emission rights. The
less efficient plants will be subject
to CO2 compliance costs with no
or limited ability to pass this extra-
cost on to clients. The choice of
benchmarks for the allocation of
emission rights post-2012 will be
of paramount importance and will
set the magnitude of the financial
impact.
4.0
3.5
3.0
2.5
1.5
1.0
0.5
SCA
Anglo American
Akzo Nobel
Bayer
Rio Tinto
55
Sector Specific Analysis
• Further increase in the cost of
electricity supply: Electro-
intensive industries, such as
aluminium or chemicals production
have already been hit by the carbon
inflation in electricity prices. With
the expiry of long-term supply
contracts and the phase out of free
CO2 permits for combined heat and
power plants, this indirect adverse
impact is expected to intensify over
phase 3. Hydro’s “German smelter
in Neuss is most affected due to
earlier expiry of power contracts. It
was mothballed in 2009, in part due
to the CO2 cost.” This impact could
be mitigated by compensatory
measures obtained from the EU
regulator after intense lobbying by
the industry.
Focus on the chemicals industry:
carbon reduction solutions
Among the chemicals industry, all
responders believe that their products
can help their clients to reduce carbon
emissions and only two speciality
chemicals companies (K+S and
Givaudan) do not see significant
business opportunities arsing from
climate change regulations.
Many chemicals products help to
reduce energy consumption and GHG
emissions during the use phase of a
product (e.g. thermal insulation for
buildings, anti-fooling coatings for
ships, light-weight plastics for cars,
applications for agriculture).
56
Table 16: Views from companies in the Materials sector
BAYER YARA HOLCIM
“As the details and benchmarks “The EU ETS 2013-2020 will “Benchmarking is more than a
have not yet been aligned, the impact on Yara’s profitability tool for distributing allowances
exact costs that will arise in the of ammonia and nitric acid within a trading system. It goes to
third trading period are not clear. production. This concerns all the fundamental question of what
Between 2013 and 2020, we are Yara production in Europe. The the future of the cement industry
expecting costs of €40-85 million cost/benefit depends on the ought to be and the appropriate
with relief regulations or €70-150 emission allowance rules under CO2 performance metric for
million without relief regulations.” development by the European stimulating improvement and
Commission, and specifically on innovation. Holcim has explained
the emission benchmarks that will its rationale for a cement
be established.” benchmark [rather than a clinker
benchmark] on many occasions.”
Table 17: Carbon reduction solutions
  Products reducing carbon emissions
Airliquide Industrial gases for producers of PV solar cells. Oxygen for energy-efficient oxyfuel
combustion. Carbon capture & Storage technology.
Akzo Nobel AkzoNobel has set a target to achieve 30 % annual sales from Eco-efficient Solutions by 2015
(20% in 2009) This includes Carbon Efficient Solutions. Example: antifouling coating saves 6
% fuel consumption and CO2 emission in ship transport due to its smoothness.
BASF 287 mtCO2e avoided thanks to BASF products (data 2008), of which 13 millions account
for BASF’s proprietary catalyst for decomposing N2O sold to industries. Other products:
insulating materials for buildings, light-weight plastics for cars, nitrification inhibitor for
agriculture
Bayer Across the entire lifecycle, the use of these Bayer products such as polyurethanes
as insulating materials or used in cooling units, coatings for sea-going vessels, and
polycarbonoates for cars, abates approximately three times more GHG emissions (86
mtCO2e) than Bayer emits itself (30 mtCO2e incl. Scope 1, 2 and 3 emissions).
DSM The target is to have LCA-studies completed for 80% of our total turnover by the end of 2010.
“White biotechnology” is the key topic of DSM vision 2010 (shift from oil-based to renewable
raw materials).
Givaudan Certain type of flavours can replace natural based products like meat or fruit for which its
production tend to have relatively high levels of GHG-emissions
K+S Use of fertilizers increases vegetation and therefore binding of atmospheric CO2 into biomass.
Preliminary calculations show that the amount of CO2 bound into biomass exceeds CO2
emissions for production and transportation of fertilizers.
Linde OxyFuel technology helps steel, glass and aluminium industries to improve the energy
efficiency of their production processes. Carbon Capture equipment for storage or upgrade to
a valuable product. Switching to on-site generated fluorine (F2) from nitrogen trifluoride (NF3)
for electronics manufacturers (250 ktCO2e saved in 2010).
Syngenta “Our products help farmers reduce energy inputs and improve carbon storage in the soil. For
example, weed control using non-selective herbicides in place of mechanical tillage – known as
minimum tillage – significantly reduces emissions from fuel use. It also preserves plant roots,
storing carbon in the soil.”
Wacker Polysilicone for photovoltaic solar applications. Silicone for LED applications
Chemie
Yara Yara fertilizer application tools provides an opportunity for GHG reductions of 10-30% in
agriculture
Telecommunication Services
The Telecommunication Services
sector is made up of 17 services
companies.
Disclosure highlights
Companies in CDLI: BT Group (89);
Telefonica (89)
Companies with an A performance
band: BT Group; Deutsche Telekom
AG; Royal KPN; Telefonica
Largest non-respondent by market
capitalisation: Iliad (only non-
respondent)
Total GHG emissions Scope 1:
2.0 mtCO2e
Total GHG emissions Scope 2:
11.7 mtCO2
Internal carbon mitigation actions
Scope 2 accounts for 81% of total
absolute CO2 emissions and is mainly
driven by electricity consumption of
data centres and their cooling systems,
along with power transmission
stations. Therefore, electric energy
purchase is a key sector issue
for carbon dioxide mitigation.
International agreement or European
regulation on lowering emissions
in the Telecommunication Services
sector could request companies to
anticipate emissions reduction plans
and make associated investments in
energy efficient technologies. Related
timescales from such regulations
remain uncertain for most respondents.
However, this has become clearer
since October 2009 when the
European Commission defined specific
ICT (Information and Communication
Technologies) regulations “to facilitate
the transition to an energy-efficient,
low-carbon economy”. It encourages
companies to commit “to a progressive
decarbonisation process leading to a
measurable and verifiable reduction
in energy intensity” (European
Commission). Companies have
reacted to this recommendation. For
instance, “BT is collaborating with
others in the ICT sector in the ICT for
Energy Efficiency (ICT4EE) Forum.
The forum was set up in response
to the European Commission’s
recommendation for the ICT sector
to identify, by 2011, energy efficiency
targets that aim to exceed the EU 2020
targets by 2015.”
It will also have an impact on ICT
suppliers leading to services and
product innovation. As pointed out
by Telefonica: “This would probably
increase our costs. For example,
costs of energy efficient equipment for
telecommunications in networks.”
Climate friendly solutions and
technologies developed
Numerous regulatory and other
opportunities are identified, mainly
within the timeframe of the coming
5 years. Companies have identified
significant opportunities in New
Services and/or Product Market
opportunities along with increased
efficiency of goods and services
and the importance of attracting
and retaining talent. The European
Commission has “estimated that ICT-
enabled improvements in other sectors
could save about 15% of total carbon
emissions by 2020. Significant ICT-
enabled energy efficiency gains are
expected to be achievable in the short
term in buildings and construction, in
transport logistics and energy end-
use.”
Most respondents are currently
developing different strategies to
expand their range of environmental
products. See table below.

Table 18: Climate friendly solutions and technologies developed

Company Climate friendly applications Substitute for Source/potential/achieved emission reductions

due to products and services
BT Group Carbon Impact Assessment (CIA), Build a Energy-greedy -Revenues: £100m of revenues per year
Sustainable Organisation (BASO) service proposition, facilities, physical -Emission avoided: this delivers an overall reduction in CO2
Smart & Green ITC: Cloud computing, Field Force transportation emissions, for the customers, of around 50,000 tonnes annually
Automation and Video Conference
Deutsche Telecom Digitalisation, Leaner computers and savings on Paper, CD-ROMs, -Digitizing documents: Total savings of around 200 metric tons
storage place maintenance and operating costs, Paying machine, of paper per year.
CO2 saving modelisation by using Dynamics Hardware, Large -Payroll accounting: Almost 10 million households now benefit
Services, Video conference, Smart metering power-hungry from this service, enabling savings over 1,500 tons of paper
computer systems each year
-Downloading: potential savings over 80 percent of CO2
compared with buying a CD-ROM
Royal KPN Video Conference, more energy efficient routers Physical transportation In 2009, introduction of 17% energy saving with now model
standard modem.
Telefonica Video Conference, Smart Building, Data Centre Energy bill, Business Smart Building reduces around 27% of the energy bill of several
energy efficiency, M2M (machine to machine) mobile trips, Building devices banking and services companies using Telefonica solutions.
platform, Networks using satellite communication; and lighting
AMR (automated meter reading) and AMI (advanced
metering infrastructure)

57
Sector Specific Analysis
Table 19: FOCUS on lower carbon economy opportunities: SMART 2020 Study in 2008 by the
Global e-Sustainability Initiative (GeSI) and The Climate Group
Climate friendly applications
- Dematerialisation with virtual alternatives
such as videoconferencing and mobile delivery
notifications
- Smart grid through active monitoring and
reducing reliance on centralised electricity
production
- Smart logistics to improve the efficiency of
logistics operations by utilising vehicles more fully
- Smart cities by improving traffic and utilities
management
- Smart manufacturing by synchronising
manufacturing operations and incorporating
communication modules In manufactured
products.
Users: Customers, Corporate, Citizens:
25 projects in 10 countries
58
Substitute for
- Office space, inefficient processes/travel
- Inefficient electricity grids
- Monitoring and tracking vehicles and their
loads optimisation
- Inefficient manufactures
Potential emission reductions due to products and
services
Reduce global emissions of CO2 by as much as 15 %
by 2020
- Dematerialisation: Carbon savings of 22.1 Mt CO2e;
Energy cost savings of €14.1 billion
- Smart grid: Carbon savings of 43.1 Mt CO2e;
Energy cost savings of €11.4 billion
- Smart logistics: Carbon savings of 35.2 Mt CO2e;
Energy cost savings of €13.2 billion
- Smart cities: Carbon savings of 10.5 Mt CO2e;
Energy cost savings of €3.7 billion
- Smart manufacturing: Carbon savings of
1.9 Mt CO2e; Energy cost savings of €0.8 billion
 Utilities
The Utilities sector contains 24
companies associated to 4 industry
groups: Electricity Utilities (14); Gas
Utilities (2); Independent Power
Producers & Energy Traders (2); and
Multi-Utilities (6).
Disclosure highlights
Companies in CDLI: Centrica (92);
Scottish & Southern Energy (90); EDP
(90)
Companies with an A performance
band: E.ON; Iberdrola; National Grid;
Scottish & Southern Energy
Largest non-respondents by market
capitalisation: Iberdrola Renovables;
EDP Renováveis
Emissions profile and reduction
targets
The sector is by far the largest emitter
in the Europe 300 sample, as it
produces 48% (946 mtCO2e) of direct
emissions reported by companies.
The large spread between the carbon-
intensity profiles of companies can be
explained by the diversity of power
generation technologies. Hence,
carbon-intensities of electricity utilities
mostly depend on their energy mix.
The high response rate to the specific
questionnaire for electricity utilities
enables the analysis of energy mixes
and the carbon-intensities of most of
companies in the sector.
Based on the reporting of 14
companies involved in power
generation, the average carbon-
intensity has decreased by 3.5%
p.a. in average over 2006-2009.
Verbund (-17% p.a. in av.); EDP (-9%)
and Endesa - owned by Enel (-8%)
have delivered well on their emission
reduction targets and report the best
carbon reduction performances over
this period.
Going forward, EDP and Verbund’s
emission reduction targets still imply
the most aggressive carbon reductions
(average emission reduction per annum
of respectively 9.3% and 6.4%). RWE
comes after this, with a 5.2% implicit
annual reduction rate. Emissions
forecasts made by the company
suggest that RWE expects to have
achieved 25% of its carbon reduction
target by 2014.

Figure 26: Energy mixes of Utility companies

100
High carbon thermal*
Low carbon thermal**
Nuclear
80
Renewables & other alt.

Renewables & othe

60

Nuclear
40

Low carbon therma

20
High carbon therm
0
EDF

Verbund

Fortum

Endesa

EDP

ENEL

Iberdrola

E.ON

A2A

RWE

SSE

Centrica

59
 Sector Specific Analysis

Table 20: Carbon-intensity and emission reduction targets of utility Risks and Opportunities
companies The main regulatory risks raised by
companies in the sectors are:
CO2-intensity 2012 (Forecast) Target (Group-wide) Implied av.
(kgCO2/MWh) reduction target
Carbon costs associated to the EU
2009 p.a.
ETS and carbon price volatility
RWE 813 771 450 by 2020 -5.2% The shortage of CO2 rights of utilities
Edison 558 N/A N/A N/A decreased in 2009 along with
SSE 491 N/A 300 by 2020 -4.4% electricity generation and emission
E.ON 476 N/A 360 by 2030 -1.3%
volumes. Enel even ended the year
with 1.6 million of emission rights
ENEL 427 N/A N/A N/A
in surplus. However, post-2012,
EDP 362 254 120 by 2020 -9.6% new allocation rules will force power
Gas Natural 343 344 N/A N/A generators to buy emission rights for
Endesa 334 N/A 295 by 2012 -4.0%
every tonne of CO2 emitted. Operating
results of Edison, Scottish & Southern
GDF Suez 333 N/A Target for Belgium only N/A
Energy and RWE appear to be most at
A2A 295 N/A N/A N/A risk of the phase-out of free CO2 rights.
Centrica 293 217 270 by 2012 -2.7%
Iberdrola 287 247 220 by 2020 -2.4% Indeed, in 2013, the need to purchase
large amounts of additional emission
Fortum 151 198 96 by 2020 -4.0%
rights previously granted for free by
EDF 126 N/A Target for France only N/A government could potentially cost
Verbund 74 126 50 by 2015 -6.4% them respectively 19.6%, 19% and
17% of the EBITDA levels achieved in
2009 (assuming constant emissions,
current carbon price of €15/t and no
Figure 27: Comparative financial impact of the phase out of free pass-through of the extra cost to end
CO2 rights in 2013 customers). Seven companies provide
internal forecasts for their emissions up
500
until 2014.
Gas Natural

GDF Suez

0
Iberdrola
Centrica
Verbund

Fortum

Edison
E.ON

RWE
EDP
Enel

SSE
EDF

-5

-500

-10
-1000

-1500 -15

-2000

-20

Estimated CO2 cost 2009 (@€13/t)

Estimated Additional CO2 cost 2013 (@€15/t)
Additional CO2 burden expected in 2013 as a % of EBITDA 2009

60
 Rules governing the use of offsets
“As a power and heat carbon credits: “Energy regulations
production company Companies are concerned of the may affect our energy
uncertainty surrounding the eligibility
with low carbon dioxide of carbon offset credits (CER/ERU) sales and will increase
emissions, Fortum will in the EU ETS post-2012 depending the need of energy
be a relative winner on project types and origins. Endesa saving certificates
of the new climate specifically states that this could acquisitions. However,
lead to a shift in the value of its
regulatory regime, portfolio. Many utility companies have it will also provide
even assuming very built portfolios of carbon credits for new opportunities for
high prices for emitted compliance in the EU ETS. our Energy Services
carbon dioxide and/ National renewable or energy
branch.”
or full auctioning of the efficiency mandates / schemes:
allowances.” Companies also widely consider
GDF-Suez
the compliance risk deriving from
the renewable and energy efficiency
Fortum mandates imposed by certain Member
States to utility companies in order
to help them reach their EU targets. “… for the period 2006-
This includes the obligation for 2009, the government
electricity distributors to reach a fixed
percentage of renewable energies set energy saving
in their energy mix (e.g. Renewable targets for energy
Obligation Certification in the U.K.) suppliers. To meet this
or mandates to provide and deliver target, EDF has chosen
energy saving services to end-users
(e.g. white certificates in France, to implement a program
Carbon Emissions Reduction Target in of several energy
the U.K.). In case of non-compliance, efficiency actions in
companies would have to buy green or all its markets with the
energy saving certificates at the market
or regulated price. goal of allowing EDF
to comply with all of
Centrica, Scottish & Southern Energy its legal and regulatory
and Gas Natural have set targets to
reduce emissions of their electricity
obligations, in particular
and gas customers, by supplying regarding energy
energy efficiency services and/or efficiency certificates
products. While this is perceived (EEC). However, EDF
as a risk by many companies, this
can also represent opportunities for can not guarantee that
those companies, which have Energy the actions taken by
Services branches, such as GDF-Suez. the Group in favour
of controlling energy
demand will be
sufficient to achieve the
goals set by the public
authorities.”

EDF

61
 Appendix 1: Table of emissions,
scores and sector information
by company

Total Emissions
2010 Response

Carbon Disclo-

Carbon Perfor-

Scope 2 Grid
mance Band

Non-Public
sure Score

Average
Scope 1
Status
Company Sector
A.P. Moller - Maersk Industrials AQ 66 B 44,888,318 44,001,421 886,897
A2A Utilities AQ 81 C 4,571,047 4,441,853 129,194
ABB Industrials AQ 73 C 1,476,000 720,000 756,000
Abertis Infraestructuras Industrials AQ 83 B 205,232 34,087 171,145
Acciona Industrials AQ 69 B 1,115,170 977,054 138,116
Accor Consumer Discretionary AQ 65 C 1,933,002 324,313 1,608,689
ACS Actividades de Construccion y Industrials AQ 50 C 8,126,971 8,070,259 56,712
Servicios
Actelion Health Care AQ 69 D NP
Adecco Industrials AQ 42
Adidas AG Consumer Discretionary AQ 68 B 58,267 7,392 50,875
ADP Industrials AQ 34 NP
Aegon Financials AQ 81 C 80,388 10,492 69,896
Air Liquide Materials AQ 76 B 16,833,000 9,386,000 7,447,000
Akzo Nobel Materials AQ 78 B 4,600,000 1,900,000 2,700,000
Alcatel - Lucent Information Technology AQ 81 B 772,816 170,130 602,686
Allianz Financials AQ 82 B 309,552 53,205 256,347
Alpha Bank Financials DP
Alstom Industrials AQ 54 C 433,000 153,000 280,000
Anglo American Materials AQ 85 B 19,102,000 8,850,000 10,252,000
AB InBev Consumer Staples AQ 74 B 4,550,000 2,962,000 1,588,000
Antofagasta Materials AQ 57 D 1,121,181 469,569 651,612
Arcelor Mittal Materials AQ 59 B 166,116,000 137,955,000 28,161,000
ASML Holding Information Technology DP
Assa Abloy Industrials AQ 34 - 184,060 39,060 145,000
Associated British Foods Consumer Staples AQ 55 C 3,856,407 2,694,260 1,162,150
AstraZeneca Health Care AQ 65 B 695,300 397,000 298,300
Atlantia Industrials AQ 53 B 194,593 49,810 144,783
Atlas Copco Industrials AQ 60 C 99,000 21,000 78,000
Aviva Financials AQ 69 B 137,587 55,593 81,994
AXA Group Financials AQ 64 B 277,002 83,998 193,004
BAE Systems Industrials AQ 58 D NP
Banca Monte dei Paschi di Siena Financials AQ 79 B 112,772 19,143 93,629
Group
Banco Comercial Português BCP Financials AQ 79 B 157,679 20,424 137,255
Banco Espanol Credito Financials AQ 36 26,749 177 26,572
Banco Espirito Santo Financials AQ 82 B 25,488 5,055 20,433
Banco Popular Espanol Financials AQ 63 C 12,409 858 11,551
Banco Sabadell Financials AQ 66 C NP
Banco Santander Financials AQ 73 B 565,218 174,305 390,913
Barclays Financials AQ 87 A 909,782 56,903 852,879

62
 Total Emissions
2010 Response

Carbon Disclo-

Carbon Perfor-

Scope 2 Grid
mance Band

Non-Public
sure Score

Average
Scope 1
Status
Company Sector

BASF Materials AQ 96 A 31,631,000 27,523,000 4,108,000

Bayer Materials AQ 95 A 8,100,000 4,570,000 3,530,000
BBVA Financials AQ 64 C 546,213 9,912 536,301
Beiersdorf Consumer Staples AQ 39 - 66,125 21,165 44,960
Belgacom Telecommunication Services AQ 71 B 150,112 53,160 96,952
BG Group Energy AQ 71 B 8,673,594 8,644,396 29,198
BHP Billiton Materials AQ 71 B 49,043,000 21,355,000 27,688,000
BMW Bayerische Motoren Werke Consumer Discretionary AQ 78 A 1,205,293 357,793 847,500
BNP Paribas Financials AQ 81 B 303,481 43,036 260,445
Bouygues Industrials AQ 33 - NP
BP Energy AQ 67 B 74,620,000 65,030,000 9,590,000
Brisa Industrials AQ 61 B 24,079 7,449 16,630
British American Tobacco Consumer Staples AQ 58 C 760,625 393,531 367,094
British Land Company Financials AQ 70 B 36,882 3,767 33,115
British Sky Broadcasting Consumer Discretionary AQ 83 B 134,604 24,945 109,659
BT Group Telecommunication Services AQ 89 A 1,630,801 211,738 1,419,060
Cable & Wireless Worldwide Telecommunication Services AQ 65 B 227,743 8,266 219,477
Cadbury Consumer Staples SA
Cairn Energy Energy AQ 49 - 25,732 24,891 841
Cap Gemini Information Technology AQ 45 121,078 0 121,078
Capita Group Industrials AQ 87 B 56,961 6,618 50,343
Carlsberg Breweries Consumer Staples AQ 68 C 1,106,580 781,924 324,656
Carnival Corporation Consumer Discretionary AQ 80 C 10,317,221 10,264,098 53,123
Carrefour Consumer Staples AQ 63 B 4,811,568 2,319,453 2,492,120
Casino Guichard-Perrachon Consumer Staples NR
Centrica Utilities AQ 92 B 11,799,441 11,598,816 200,625
Christian Dior Consumer Discretionary NR
CINTRA Industrials SA
Cnp Assurances Financials AQ 66 B 4,190 2,160 2,030
Coca-Cola Hellenic Consumer Staples AQ 72 B 831,301 488,752 342,549
Colruyt Consumer Staples NR
Commerzbank AG Financials IN
Compagnie Financière Richemont SA Consumer Discretionary AQ 46 NP
Compagnie Nationale à Portefeuille Financials NR
Compass Consumer Discretionary AQ 57 C 87,421 79,542 7,879
Credit Agricole Financials AQ 76 C 38,156 2,209 35,947
Credit Suisse Financials AQ 69 B 202,007 18,057 183,950
CRH Materials AQ 54 B 10,542,000 9,395,000 1,147,000
Criteria Caixa Corp Financials AQ 42 - 433 433
Daimler Consumer Discretionary AQ 75 B NP
Danone Consumer Staples AQ 81 B 1,131,427 497,245 634,182
Danske Bank Financials AQ 66 B 41,446 4,345 37,101
Dassault Systemes Information Technology AQ 57 D NP
Delhaize Consumer Staples AQ 42 2,710,064 966,923 1,743,141
Deutsche Bank Financials AQ 73 B 459,051 36,938 422,113
Deustche Börse Financials AQ 60 C 21,732 - 21,732

63
Appendix 1: Table of emissions, scores and sector information by company

Total Emissions
2010 Response

Carbon Disclo-

Carbon Perfor-

Scope 2 Grid
mance Band

Non-Public
sure Score

Average
Scope 1
Status
Company Sector

Deutsche Lufthansa Industrials AQ 77 B NP

Deutsche Post Industrials AQ 97 A 5,800,000 4,900,000 900,000
Deutsche Postbank Financials AQ 65 B NP
Deutsche Telekom Telecommunication Services AQ 77 A 3,361,095 397,878 2,963,220
Dexia Financials AQ 56 C 24,787 17,107 7,680
Diageo Consumer Staples AQ 67 B 740,116 644,613 95,503
DnB NOR Financials AQ 59 B 12,849 2,001 10,848
DSM Materials AQ 88 B 6,629,840 4,656,611 1,973,229
E.ON AG Utilities AQ 80 A 164,751,902 159,559,934 5,191,970
EADS Industrials AQ 69 B 994,500 550,500 444,000
Edison Utilities AQ 45 20,969,370 20,922,830 46,540
EDP - Energias de Portugal Utilities AQ 90 B 21,313,670 20,039,249 1,274,420
EDP Renováveis Utilities NR
EFG Group Financials AQ 24 NP
Electricite de France Utilities AQ 78 B 78,672,080 78,192,000 480,080
Electrolux Consumer Discretionary AQ 74 B 413,607 119,161 294,446
Endesa Utilities AQ 78 B 46,335,184 45,267,968 1,067,220
ENEL Utilities AQ 37 - 122,265,382 122,265,382
ENI Energy AQ 83 A 58,963,266 57,326,278 1,636,990
Eramet Materials DP
Ericsson Information Technology AQ 72 B 201,000 26,000 175,000
Erste Group Bank Financials AQ 43 - 7,641 2,561 5,080
Essilor Health Care AQ 52 D NP
Eurasian Natural Resources Materials DP NP
Corporation
EUTELSAT COMMUNICATION Consumer Discretionary NR
Experian Group Industrials AQ 67 B 66,032 7,857 58,175
Ferrovial Industrials AQ 89 A 1,952,928 1,455,390 497,538
Fiat Consumer Discretionary AQ 80 B 2,571,811 549,608 2,022,200
Finmeccanica Industrials AQ 64 C 514,953 199,107 315,846
Fortis Sa/Nv Financials SA
Fortum Utilities AQ 82 B 22,286,000 22,100,000 186,000
France Telecom Telecommunication Services AQ 69 B 1,636,511 416,498 1,220,010
Fresenius SE Health Care AQ 30 - NP
Fresnillo Materials AQ 58 C NP
Galp Energia Energy NR
Gas Natural SDG Utilities AQ 73 B 26,810,000 25,800,000 1,010,000
GBL Financials DP
GDF Suez Utilities AQ 85 B 100,541,004 97,405,418 3,135,590
Geberit Industrials AQ 75 B 77,328 18,785 58,543
Gecina Financials IN
Generali Financials AQ 69 C 76,315 14,879 61,436
Generali Deutschland Holding AG Financials AQ 65 B NP
Givaudan Materials AQ 55 C 221,317 111,290 110,027
Gk Org Fball Prgntc Consumer Discretionary NR
GlaxoSmithKline Health Care AQ 88 B 2,232,173 1,086,757 1,145,420
H&M Hennes & Mauritz Consumer Discretionary AQ 52 C 250,152 11,951 238,201

64
 Total Emissions
2010 Response

Carbon Disclo-

Carbon Perfor-

Scope 2 Grid
mance Band

Non-Public
sure Score

Average
Scope 1
Status
Company Sector

Hannover Re Financials AQ 33 NP
Heidelbergcement Materials AQ 54 C 50,793,810 46,614,432 4,179,378
Heineken NV Consumer Staples AQ (L) NP
Hellenic Telecom Telecommunication Services AQ 76 B 306,121 15,936 290,185
Henkel AG & CO. KGaA Consumer Staples AQ 69 B 748,700 364,600 384,100
Hermes International Consumer Discretionary NR
Holcim Materials AQ 67 B 102,954,986 97,092,613 5,862,370
HSBC Holdings Financials AQ 92 A 830,310 90,586 739,724
Iberdrola Utilities AQ 83 A 49,522,719 41,018,580 8,504,140
Iberdrola Renovables Utilities DP
Iliad Telecommunication Services NR
Imperial Tobacco Group Consumer Staples AQ 63 C 260,086 99,676 160,410
Inditex Consumer Discretionary AQ 66 C 335,226 24,591 310,635
ING Group Financials AQ 54 B 280,596 35,775 244,821
International Power Utilities AQ 58 B NP
Intesa Sanpaolo S.p.A. Financials AQ 66 B 159,877 73,636 86,241
Investor AB Financials AQ 59 D NP
J Sainsbury Consumer Staples AQ 59 C 855,475 207,550 647,925
Jerónimo Martins Consumer Staples AQ 64 C 493,393 33,913 459,480
Julius Baer Financials AQ 58 C NP
K + S AG Materials AQ 62 C 1,183,442 948,178 235,264
Kazakhmys Materials NR
KBC Group Financials AQ 64 C 65,610 65,610
Kingfisher Consumer Discretionary AQ 87 A 489,000 129,000 360,000
Klepierre Financials AQ 63 D NP
Kone Industrials AQ 61 B 137,627 110,960 26,667
Koninklijke Ahold Consumer Staples AQ 55 B 2,681,665 1,259,093 1,422,572
Kuehne + Nagel Industrials AQ 65 B 276,599 137,223 139,376
L’ Oreal Consumer Staples AQ 61 B 183,850 78,200 105,650
Lafarge Materials AQ 94 A 106,641,379 97,875,837 8,765,540
Land Securities Financials AQ 38 - 101,971 12,501 89,470
Legal & General Group Financials AQ 62 C NP
Legrand Industrials AQ 59 C NP
Les Sociétés d’Autoroutes Industrials NR
Linde Materials AQ 71 B 14,400,000 5,400,000 9,000,000
Lloyds Banking Group Financials AQ 85 B 412,510 69,484 343,026
Luxottica Group Consumer Discretionary NR
LVMH Consumer Discretionary AQ 75 B 253,390 48,723 204,667
MAN SE Industrials AQ 65 C 402,088 142,739 259,349
Man Group Financials AQ 61 C 10,067 1,227 8,840
Mapfre Financials AQ 68 C 25,228 1,218 24,010
Marks & Spencer Consumer Discretionary AQ 69 B 652,000 221,000 431,000
Mediaset Consumer Discretionary NR
Mediobanca Financials NR
Merck KGaA Health Care AQ 72 C 306,286 157,600 148,686
Metro Consumer Staples AQ 74 B 3,450,344 692,887 2,757,460

65
Appendix 1: Table of emissions, scores and sector information by company

Total Emissions
2010 Response

Carbon Disclo-

Carbon Perfor-

Scope 2 Grid
mance Band

Non-Public
sure Score

Average
Scope 1
Status
Company Sector

Michelin Consumer Discretionary DP

Morrison Supermarkets Consumer Staples AQ 47 - 1,120,978 504,863 616,115
Munich Re Financials AQ 82 A 246,702 59,760 186,942
National Bank Of Greece Financials AQ 44 - 44,603 44,603
National Grid Utilities AQ 87 A 8,850,000 8,500,000 350,000
NATIXIS Financials AQ 42 - 12,414 421 11,993
Nestlé Consumer Staples AQ 92 A 6,975,093 3,976,158 2,998,940
Next Consumer Discretionary AQ 81 B NP
Nokia Group Information Technology AQ 91 A 299,300 18,700 280,600
Nordea Bank Financials AQ 50 C 51,519 51,519
Norsk Hydro Materials AQ 59 B 10,309,158 4,759,247 5,549,911
Novartis Health Care AQ 72 B 1,509,227 578,343 930,884
Novo Nordisk Health Care AQ 89 A 184,202 40,883 143,319
Old Mutual Financials AQ 82 B 605,585 6,946 598,639
OMV Energy AQ 79 B 12,547,300 11,732,400 814,900
Orkla Industrials AQ 71 C 2,680,716 1,836,064 844,652
Pargesa Holding SA Financials DP
Pearson Consumer Discretionary AQ 69 C 194,634 45,524 149,110
Pernod-Ricard Consumer Staples AQ 60 C 421,786 317,631 104,155
Philips Electronics Industrials AQ 94 A 1,083,700 434,717 648,983
Porsche AG Consumer Discretionary AQ 73 B 76,906 23,010 53,896
Portugal Telecom Telecommunication Services AQ 77 B 154,985 16,678 138,307
PPR Consumer Discretionary NR
Prudential Financials AQ 66 C 127,261 18,878 108,383
PSA Consumer Discretionary AQ 87 B 805,242 523,703 281,539
Publicis Groupe SA Consumer Discretionary AQ 45 160,703 86,416 74,287
R.E.E. Utilities AQ 69 C 920,015 54,275 865,740
Raiffeisen International Bank Holding Financials IN
Randgold Resources Materials AQ 50 D 210,069 210,069
Randstad Industrials AQ 61 C 22,231 9,253 12,978
Reckitt Benckiser Consumer Staples AQ 93 A 287,085 91,063 196,022
Reed Elsevier Consumer Discretionary AQ 77 B 143,748 18,587 125,161
Renault Consumer Discretionary AQ 93 A 1,190,658 576,792 613,866
Repsol YPF Energy AQ 88 A 26,473,220 24,701,381 1,771,840
Rio Tinto Materials AQ 89 B 42,437,000 26,100,000 16,337,000
Roche Holding Health Care AQ 56 C 889,412 433,535 455,877
Rolls-Royce Industrials AQ 79 A 567,086 210,758 356,328
Royal & Sun Alliance Insurance Group Financials AQ 45 - 49,255 15,118 34,137
Royal Bank of Scotland Group Financials AQ 93 A 776,487 87,629 688,858
Royal Dutch Shell Energy AQ 89 A 76,000,000 67,000,000 9,000,000
Royal KPN Telecommunication Services AQ 80 A 559,618 84,909 474,709
RTL Group Consumer Discretionary NR
RWE Utilities AQ 67 B 149,100,000 149,100,000
Ryanair Holding PLC Industrials NR
S.E.B. Consumer Discretionary AQ 14 NP
SABMiller Consumer Staples AQ 65 B 2,632,056 1,449,442 1,182,610

66
 Total Emissions
2010 Response

Carbon Disclo-

Carbon Perfor-

Scope 2 Grid
mance Band

Non-Public
sure Score

Average
Scope 1
Status
Company Sector

Safran Industrials DP
Saint-Gobain Industrials AQ 89 B 16,100,879 12,347,534 3,753,350
Saipem Energy AQ 76 C NP
Sampo Financials NR
Sandvik Industrials AQ 63 C 479,000 195,000 284,000
Sanofi-Aventis Health Care AQ 63 C NP
SAP Information Technology AQ 83 B 232,000 131,000 101,000
SCA Materials AQ 90 B 4,350,000 2,579,000 1,771,000
Schneider Electric Industrials AQ 52 B 477,647 200,497 277,150
Scottish & Southern Energy Utilities AQ 90 A 24,286,543 22,731,418 1,555,130
Seadrill Energy AQ 38 NP
SES Consumer Discretionary AQ 62 C 49,798 17,317 32,481
SGS Industrials AQ 59 B 157,382 65,913 91,469
Shire Health Care AQ 74 C 47,310 20,102 27,208
Siemens Industrials AQ 98 A 3,371,990 1,509,736 1,862,250
Skanska Industrials AQ 85 B 366,250 258,370 107,880
SKF Industrials AQ 71 B 528,555 69,803 458,752
Smith & Nephew Health Care DP NP
Smiths Group Industrials AQ 25 - 114,300 18,776 95,524
Snam Rete Gas Utilities AQ 52 C 1,255,416 1,227,000 28,416
Société Générale Financials AQ 55 C 219,921 26,186 193,735
Sodexo Consumer Discretionary AQ 17 NP
Solvay Materials AQ 66 B NP
Sonova Holding AG Health Care DP
Standard Chartered Financials AQ 82 B 131,190 5,806 125,384
Standard Life Financials AQ 82 B 18,417 2,902 15,515
Statoil Energy AQ 39 - 13,100,000 13,100,000
STMicroelectronics Information Technology AQ 38 1,212,560 337,000 875,560
Suez Environnement Utilities AQ 74 B NP
Svenska Handelsbanken Financials AQ 36 - NP
Swatch Group Consumer Discretionary DP
Swedbank Financials AQ 67 C 2,790 2,790
Swiss Re Financials AQ 79 A 26,690 5,718 20,972
Swisscom Telecommunication Services AQ 42 - 26,300 26,300
Syngenta International Materials AQ 71 B 1,059,000 641,000 418,000
Synthes Health Care NR
Technip Sa Energy NR
Tele2 Telecommunication Services AQ 70 C 9,283 678 8,605
Telecom Italia Telecommunication Services AQ 70 B 1,058,026 187,513 870,513
Telefónica Telecommunication Services AQ 89 A 1,886,030 119,510 1,766,520
Telekom Austria Telecommunication Services AQ 47 NP
Telenor Telecommunication Services AQ 63 C 810,252 196,414 613,838
TeliaSonera Telecommunication Services AQ 80 B 205,838 27,672 178,166
Tenaris Energy NR
Terna Utilities AQ 81 B 155,144 79,464 75,680
Tesco Consumer Staples AQ 92 A 5,094,719 1,956,628 3,138,090

67
Appendix 1: Table of emissions, scores and sector information by company

Total Emissions
2010 Response

Carbon Disclo-

Carbon Perfor-

Scope 2 Grid
mance Band

Non-Public
sure Score

Average
Scope 1
Status
Company Sector

Thales Industrials AQ 44 267,075 105,900 161,175

ThyssenKrupp Materials AQ 70 B 20,380,906 15,280,906 5,100,000
TNT Industrials AQ 81 B 982,849 883,982 98,867
Total Energy AQ 77 B 60,300,000 55,100,000 5,200,000
Tullow Oil Energy AQ 27 - 370,776 370,776
UBS Financials AQ 82 A 324,061 25,723 298,338
UCB Cap Health Care DP
Unibail-Rodamco Financials AQ 61 C 117,419 21,425 95,994
Unicredit Group Financials AQ 67 C 502,909 96,122 406,787
Unilever Consumer Staples AQ 82 B 2,641,079 1,100,785 1,540,290
Unione Di Banche Italiane Financials NR
UPM-Kymmene Corporation Materials AQ 90 B 5,080,000 2,870,000 2,210,000
Vallourec Industrials AQ 56 C 1,066,649 739,804 326,845
Vedanta Resources Materials NR
Veolia Environnement Utilities AQ 82 B 50,026,560 44,482,430 5,544,130
Verbund Utilities AQ 85 B 2,688,664 2,220,911 467,753
Vestas Wind Systems Industrials AQ 82 B 118,981 50,523 68,458
Vienna Insurance Financials DP
Vinci Industrials AQ 80 B 2,154,500 1,959,500 195,000
Vivendi Universal Consumer Discretionary AQ 78 C 247,969 27,614 220,355
Vodafone Group Telecommunication Services AQ 83 C 1,622,535 249,087 1,373,450
Voestalpine Materials NR
Volkswagen Consumer Discretionary AQ 77 B 6,516,034 1,510,950 5,005,080
Volvo Industrials AQ 57 C NP
Wacker Chemie Materials AQ 51 C 985,018 985,018
Wolters Kluwer Consumer Discretionary IN
WPP Consumer Discretionary AQ 65 C 166,696 6,282 160,414
Xstrata Materials AQ 75 B NP
Yara Group Materials AQ 38 12,500,000 12,500,000
Zardoya Otis Industrials NR
Zurich Financial Services Financials AQ 57 C NP

Key

AQ Answered questionnaire
AQ(L) Answered questionnaire late
DP Declined to participate
IN Provided some information
(but did not answer the CDP questions)
NP Non public response
NR No response
– Company not in CDP sample that year

68
 Appendix 2: Composition of GICS
sectors at three different
segmentation levels

GICS Sector (Company) GICS Industry Group (Company) GICS Industry (Company)

Consumer Discretionary Automobiles & Components Auto Components

    Automobiles

  Consumer Durables & Apparel Household Durables

    Textiles, Apparel & Luxury Goods

  Consumer Services Hotels, Restaurants & Leisure

  Media Media

  Retailing Multiline Retail

    Specialty Retail

Consumer Staples Food & Staples Retailing Food & Staples Retailing

  Food, Beverage & Tobacco Beverages

    Food Products

    Tobacco

  Household & Personal Products Household Products

    Personal Products

Energy Energy Energy Equipment & Services

    Oil, Gas & Consumable Fuels

Financials Banks Commercial Banks

  Diversified Financials Capital Markets

    Diversified Financial Services

  Insurance Insurance

    Real Estate Investment Trusts (REITs)

Health Care Health Care Equipment & Services Health Care Equipment & Supplies

  Pharmaceuticals, Biotechnology & Life Sciences Biotechnology

    Pharmaceuticals

Industrials Capital Goods Aerospace & Defense

    Building Products

    Construction & Engineering

    Electrical Equipment

    Industrial Conglomerates

    Machinery

  Commercial & Professional Services Commercial Services & Supplies

    Professional Services

69
Appendix 2: Composition of GICS sectors at three different segmentation levels

  Transportation Air Freight & Logistics

    Airlines

    Marine

    Transportation Infrastructure

Information Technology Semiconductors & Semiconductor Equipment Semiconductors & Semiconductor Equipment

  Software & Services IT Services

    Software

  Technology Hardware & Equipment Communications Equipment

Materials Materials Chemicals

    Construction Materials

    Metals & Mining

    Paper & Forest Products

Telecommunication Telecommunication Services Diversified Telecommunication Services

Services

    Wireless Telecommunication Services

Utilities Utilities Electric Utilities

    Gas Utilities

    Independent Power Producers & Energy Traders

    Multi-Utilities

70
Acknowledgements

The development of the CDP Europe 300 report 2010 is a collaborative effort to which many
people have contributed. Special thanks go to the following people and institutions:

Report Writer – CA Cheuvreux

Erwan Créhalet, Stéphane Voisin,

Climate Change Analyst Head of Sustainability Research

With the collaboration of Marine Mellado and Tahirou Gourouza

Lead Sponsor – AXA

Alice Steenland, Sylvain Vanston,

Vice President Group Corporate Responsibility
Corporate Responsibility

Sponsor – Omnicom

Frank Manzi,
Vice President

Sponsor – Océ

Harry Loozen,
Senior Vice President of Corporate Public Affairs and Sustainability

Printing

Printed on-demand by Océ Business Services on sustainable paper that is

produced carbon neutrally: Océ Black Label Zero, 80g/sqm.

www.oce.com

Layout

Floda31

Marije de Haas,
Designer

Foreword – DG Climate Action

Connie Hedegaard,
European Commissioner for Climate Action
CDP contacts

Carbon Disclosure Project Paul Dickinson Sue Howells

40 Bowling Green Lane Executive Chairman Head of Global Operations
London, EC1R 0NE sue.howells@cdproject.net
United Kingdom Paul Simpson
Tel: + 44 (0) 20 7970 5660 Chief Executive Officer Cassie Chessum
Fax: + 44 (0) 20 7691 7316 Head of Government Relations
www.cdproject.net Nigel Topping cassie.chessum@cdproject.net
info@cdproject.net Chief Innovation Officer
Marianne Gillis
Joanna Lee Project Manager – Government Relations
Chief Partnerships Officer marianne.gillis@cdproject.net

Report writer contacts

Stéphane Voisin Erwan Créhalet

Head of Sustainability Research Climate Change Analyst
svoisin@cheuvreux.com ecrehalet@cheuvreux.com

CDP Board of Trustees

Chair: Robert Napier Christoph Schröder Chris Page

The Met Office TVM Capital Rockefeller Philanthropy
Advisors
Martin Wise Alan Brown
Relationship Capital Partners Schroders Tessa Tennant
The Ice Organisation
Jeremy Smith James Cameron
Berkeley Energy Climate Change Capital Takejiro Sueyoshi

Important Notice

The contents of this report may be used by anyone providing acknowledgement is given to Carbon Disclosure Project. This does not represent a license to repackage
or resell any of the data reported to CDP and presented in this report. If you intend to do this, you need to obtain express permission from CDP before doing so. CA
Cheuvreux and CDP prepared the data and analysis in this report based on responses to the CDP 2010 information request. CA Cheuvreux and CDP do not guarantee
the accuracy or completeness of this information. CA Cheuvreux and CDP make no representation or warranty, express or implied, and accept no liability of any kind in
relation to the report including concerning the fairness, accuracy or completeness of the information and opinions contained herein. All opinions expressed herein by CDP
and/or CA Cheuvreux are based on their judgment at the time of this report and are subject to change without notice due to economic, political, industry and firm-specific
factors. Guest commentaries where included in this report reflect the views of their respective authors.

CA Cheuvreux and CDP and their affiliated member firms or companies, or their respective shareholders, members, partners, principals, 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.

‘Carbon Disclosure Project’ and ‘CDP’ refers to Carbon Disclosure Project, a United Kingdom company limited by guarantee,
registered as a United Kingdom charity number 1122330.

© 2010 Carbon Disclosure Project.