Facing rising global temperatures and potential supply-chain risks to vital resources like water and electricity, more S&P 500 corporations are actively working to reduce climate risks in their businesses and holding more of their executives accountable for energy efficiency and lowered carbon emissions, according to new data released Monday.
For example, corporate board level responsibility for climate change has soared to 95 percent in 2015 from 67 percent five years ago, according to a 2015 climate change report from the CDP, formerly the Carbon Disclosure Project. Among the other findings, S&P 500 companies actively working to reduce their greenhouse gas emissions have increased to 96 percent from 52 percent.
"We found a dramatic uptick with regard to companies actively managing climate change in their business," said Lance Pierce, president of CDP North America.
The report on greening corporations echoes shifts already underway in the financial sector. In response to investor demand, more financial products — everything from mutual funds to benchmark indexes — feature energy efficient corporations and those with a lower carbon footprint.
By the beginning of 2014, $6.57 trillion — or $1 of every $6 in U.S. assets under professional management — were invested in accordance with a sustainable mandate, according to the Forum for Sustainable and Responsible Investment is the U.S. America, however, still lags Europe, where 61 percent of institutional funds have some form of environmental or social mandate, according to the Global Sustainable Investment Alliance.
"There's a myth you have to sacrifice returns if you invest in a low-carbon alternative," Pierce said. "That's really starting to give way."