Lloyds, Santander, Other Investors Call for Carbon Emissions Reductions

Banco Santander, Axa, Westpac, Lloyds Banking Group and other institutional investors worth a total of $10 trillion have called for 415 of the world’s largest public companies to enact cost-effective management and reductions of their carbon emissions.

The Carbon Disclosure Project sent a letter on behalf of the 92 pension funds, asset managers, insurers and banks as part of its Carbon Action initiative, simultaneously with its annual request for company disclosure of greenhouse gas emissions, climate change strategies and water use.

The letters were tailored according to each company’s circumstances, and included some or all of the following requests: to make year-on-year emissions reductions; invest in emission reduction activities with a positive return on investment; set and publicly disclose emissions reduction targets that cover the principle sources of emissions in their business; and demonstrate management of and steps toward reduction of emissions across their supply chains.

CDP sent letters to companies in two large segments. The first comprised sectors emitting an average of 4 million tons of carbon a year. These 256 companies included independent power producers, energy traders, utilities, airlines, automakers, industrial conglomerates, and companies in the marine, metals and mining, paper, forest products, chemical, construction materials, building products, commercial services, road and rail, air freight and logistics, and oil, gas and consumable fuels industries.

The second group of 159 companies has the potential for large supply chain emissions reductions, CDP said. These are retailers (internet, catalog, multiline, specialty, food and staples), makers of household durables, makers of household and personal products, food and beverage companies, and manufacturers of electronics, semiconductors, communications equipment, computers and peripherals.

CDP says support for Carbon Action has more than doubled since it was launched in April 2011. Original participants were group of 34 institutional investors, including Dutch and British pension funds and asset managers, managing $7.6 trillion.

The biggest new signatories include banks Banco Santander, Banesto and BBVA, fund manager Henderson and asset manager APG. A significant number of new signatories are based in Australia, which passed a carbon tax last year.

The number of signatories in the CDP’s investor program has surged 19 percent over last year, to 655 signatories with $78 trillion in assets, and CDP says 3,700 companies – or 80 percent of the world’s largest firms – now make disclosures through the program. Participation in CDP Water Disclosure has grown even faster, at 33 percent, to 470 companies with $50 trillion in assets.