‘A List’ climate change firms outperform on stock market: Survey , Latest Business News - The New Paper

‘A List’ climate change firms outperform on stock market: Survey

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OSLO: Apple, L'Oreal and Mitsubishi Electric are among more than 120 global companies that scored top marks in a ranking of corporate efforts to slow climate change.

Many companies say they are stepping up action on climate change since almost 200 governments struck the 2015 Paris climate agreement to phase out greenhouse gas emissions this century by shifting from fossil fuels.

But only 2 per cent of 6,800 firms that submitted data made the "A List" of CDP's index, including Johnson & Johnson, Nestle, China Mobile and Microsoft.

London-based CDP, formerly the Carbon Disclosure Project, said its data showed the shares of its index leaders tend to outperform on stock markets. Companies are coming under increasing pressure from shareholders to address climate change.

CDP said the STOXX Global Climate Leaders index, based on the CDP A List, outperformed the STOXX Global 1800 of major firms by 5.4 per cent a year from December 2011 to July last year.

"We think (climate action) is a lead indicator of quality in other areas, especially sustainability and management," Mr Dexter Galvin, global director of corporates and supply chains at CDP, told Reuters ahead of the index publication yesterday.

Mr Galvin said it was hard to compare last year's results with previous years due to changes in the questions posed. As a result, a company that dropped off the list was not necessarily performing worse, he added.

CDP asks companies to disclose their performance on climate change and separately surveys their efforts to limit water use and to protect forests in its study, which is backed by more than 650 investors with assets of US$87 trillion (S$118 trillion) and is meant to spur efforts to protect the planet. - REUTERS