In a State-by-State analysis of the business response to climate change, a new CDP report shows companies across America are factoring global warming into their business planning because they see climate action as a prudent way to build competitive advantage for their firms nationally and globally.
The new report examines the business response to climate change from 172 S&P 500 companies in nine diverse US States: California, Colorado, Michigan, Minnesota, North Carolina, Ohio, Pennsylvania, Texas and Virginia1.
"Managing global warming impacts delivers competitive advantage to US companies," said Tom Carnac, President of CDP in North America. "We are moving from a world that's projecting future climate risks to one that's experiencing those risks now. Regulation can help level the playing field, allowing more companies to benefit from mitigating the risks, while speeding up the shift to a profitable low carbon economy."
Highlights from the report include insights into:
Companies are innovating to respond to increasing demand for energy efficient products, generating revenue and economic growth. For example, companies in the consumer discretionary sector, particularly those based in Michigan, Ohio and North Carolina, are remaking common household goods – everything from laundry detergent to building insulation to vehicle tires – to ensure they reduce carbon pollution through the full product lifecycle.
California's IT companies, such as HP, are promoting green technology to their customers to enable rapid growth of new data infrastructure.
Of the eleven Texas energy companies represented in this paper, almost all reported that they have incorporated natural gas, wind or solar power into their energy mix. Companies like CONSOL Energy (PA) and Spectra Energy (TX) have made high value investments in renewable and alternative fuel sources.
Ahead of any regulatory requirements, utilities companies like The AES Corporation (VA) and Sempra Energy (CA) are preparing for a low-carbon economy through portfolio diversification.
Risks and Disruptions
Across every State covered in this paper companies report current and near term risks and disruptions from extreme weather. Businesses are responding by investing in resilience to provide some measure of certainty surrounding what is often unpredictable.
All companies expect some form of regulation to manage climate change.
Across all States covered in the report companies already identify that regulations can provide a catalyst to reduce operational costs over the long term to aid a successful transition to a low carbon economy.
Many report regulatory uncertainty has impeded the benefits that may derive from a level playing field.
Major national and global companies, like Bank of America (NC), point to regulatory uncertainty as a factor holding back much-needed low carbon investments.
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