Climate is central to business strategy of 68% of the world's 500 largest companies, compared with 48% last year

This article is more than 9 years old

This article is more than 9 years old

A majority of the world's largest firms are taking action on climate change as part of their business strategy for the first time, a survey has found.

The 10th annual Carbon Disclosure Project, which analysed responses from 396 of the 500 largest companies in the world, found more than two-thirds (68%) now say they put climate change central to their business, compared with 48% last year.

Almost half (45%) are now reporting they have cut their greenhouse gas emissions as a result of steps they have taken to tackle carbon, up from less than a fifth (19%) in 2010.

The Carbon Disclosure Project report, written by PwC, also said there was a link between higher stock market performance and action on climate change, with those that have a strong focus on the issue providing investors with approximately double the average return over the period 2005 to 2011.

Tesco was the only big player from the UK which made it into the top 10 for both disclosing information and taking action on climate change, joining the likes of Bank of America, BMW, Sony and Philips Electronics.

But UK companies British American Tobacco, natural gas business BG Group and GlaxoSmithKline also made it into the list of major corporations which performed well on addressing climate change, entering the 2011 Carbon Performance Leadership Index which includes just 29 top businesses.

Major companies which are still not disclosing climate change information include Amazon.com, Apple, Bank of China and Russian government-owned oil giant Rosneft.

The CDP report suggests that rising oil prices, risky energy supplies and growing recognition of the returns on investment in cutting emissions have made climate change a more important issue in the boardroom.

It says that 59% of companies reported that the cost of schemes to reduce emissions such as energy saving projects in buildings, installing low-carbon power and changing the behaviour of staff, were recouped within three years.

Almost three-quarters of businesses (74%) who responded to the survey now have emissions reductions targets, up from two-thirds (65%) in 2010.

Utilities companies have the best average climate change performance while energy companies lag behind other sectors, with fewer setting targets, taking action or disclosing information.

Paul Simpson, chief executive of the Carbon Disclosure Project, an independent organisation which tracks corporate information on climate change, said: "The improved financial performance of companies with high carbon performance is a clear indicator that it makes good sense to manage and reduce carbon emissions.

"This is a win-win for business - the short returns on investment many emissions-reducing activities have, can help increase profitability.

"Companies yet to take action on climate change will have to work hard to remain competitive as we head towards an increasingly resource-constrained, low carbon economy."

David North, global climate change champion at Tesco, said: "We have been cutting emissions for years, and as a result have reduced our energy costs by more than £200m annually - a win-win for business and the environment."

The report found that the vast majority (93%) of companies who responded with information have senior executives or board members responsible for climate change.

And almost two-thirds (65%) offer financial rewards to staff for taking action on climate change.

Alan McGill, PwC sustainability and climate change partner, said: "We're seeing the highest levels of board oversight and engagement on climate change strategy ever, with significant increases in the levels of monetary incentives linked to achieving targets.

"Companies are linking action on climate change to their employees' work and wallets, from the boardroom to the office floor. It's a shift we could not have imagined 15 years ago."