Preserving the Environment

Why Fighting Climate Change is Good Business

November 18, 2014
by
Why Fighting Climate Change is Good Business
Google is one of the companies described as “climate performance leaders” by the Climate Disclosure Project. Justin Sullivan/Getty Images
Turns out, being green doesn't hurt profits.

Tackling climate change isn’t risky businesses. In fact, it’s quite the opposite.

As Co.Exist reports, corporations that are taking action on climate change are seeing more profits, better stability and offer stronger dividends to shareholders compared to other businesses. Climate-aware companies have “an 18 percent higher return on equity (ROE) than their peers, and a 67 percent higher ROE than companies that don’t disclose climate change-related actions,” and have “50 percent lower volatility in earnings over the last 10 years and 21 percent strong dividends to shareholders than companies with less transparency,” the publication writes.

These findings are based on information from the CDP (the not-for-profit organization formerly known as the Climate Disclosure Project, that allows corporations to reveal their environmental information) and its 14th annual CDP Global 500 Climate Change Report.

For the report, the CDP surveyed nearly 2,000 major international companies on their green initiatives and what they’ve done to curb emissions for the past year. From that information, the CDP created its first-ever “A List” — an index of 187 companies that are “climate performance leaders,” according to a press release. About 30 companies on the list are American, including Microsoft, Google, CVS Health, Lockheed Martin and Bank of America.

MORE: 5 Very Simple, Practical Things You Can Do to Curb Climate Change

“The A List represents just nine percent of the 1,971 companies scored this year but accounts for US$23 billion of the annual investment to reduce carbon emissions – just under half of the US$50 billion invested by the full sample,” the release states.

Encouragingly, even businesses in unlikely industries are adapting to the needs of a warming planet. Scientific American reports from the CDP report that General Motors, for example, reduced greenhouse gas emissions by 244,000 metric tons a year by “developing and promoting more fuel-efficient vehicles, adopting energy efficiency programs at its plants, and tweaking its supply chain to move more vehicles by rail instead of on highways,” which ultimately saved the auto-giant $287 million.

It’s more important than ever to be planetary stewards. The overwhelming takeaway from the newest climate report from the Intergovernmental Panel on Climate Change (IPCC) is that there’s no time to lose to mitigate climate change. However, if international governments and corporations act now, the worst can be avoided.

As Paul Simpson, chief executive officer of the CDP, says in a statement,”The businesses that have made it onto our first ever global list of climate performance leaders are to be congratulated for their progress; they debunk economic arguments against reducing emissions. However, global emissions continue to rise at an alarming rate. Businesses and governments must raise their climate ambition. The data shows that there is neither an excuse nor the time for lethargy.”

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