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TBLI CONFERENCE™ NORDIC 2014 Our first ESG & Impact Investing conference in the Nordic region, hosted by the BI Norwegian Business School in Oslo. For 2 days, the conference offered a platform to learn about current trends in sustainable investing and CSR in the Nordic region – and ample opportunity to find new business partners. Unique to this event, selected entrepreneurs have been invited to present their innovative green technology and climate change related projects to the investor community.
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www.cdp.net | @CDP 1
Beyond fossil fuels
Emma Henningsson, Director, CDP Nordic
www.cdp.net | @CDP
CDP’s mission !• To transform the global economic system to prevent dangerous
climate change and value our natural resources by putting relevant information at the heart of business, investment and policy decisions !
CDP collects information on: • Climate Change • Water • Forests !From: • Publicly listed companies • Their suppliers • World’s largest cities !
Mission and what we do !
Forests
WaterClimate Change
INVESTORS
SUPPLY CHAIN MEMBERS
www.cdp.net | @CDP
CDP: Driving Sustainable Economies
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>4.500 companies = 60% of the global market cap &
110 cities
767 Investors with 92 Trillion USD AUM &
68 Corporations with > €1.000 Billion Purchasing Value
4.200 Climate Disclosure Scores2.500 Climate Performance Bands
Climate Change, CO2, Water, Forest
Transparency & Actions
www.cdp.net | @CDP
The Stranded Assets Debate! Carbon Tracker Initiative report on fossil fuel reserves versus
the ‘carbon budget’ for a 2 degree temperature rise
! Argument that cap ex spent today by oil and gas companies is
wasted and should be invested in other opportunities instead
! What should investors do? Engage with companies or divest?
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www.cdp.net | @CDP 5
www.cdp.net | @CDP
Positive link between climate transparency and financial indicators
Source: CDP & SCIM Linking Climate Engagement to Financial Performance Report 2013
+5.2% return on equity
+18.1% cash flow stability
+1.6% dividend growth
www.cdp.net | @CDP
Rapid developments
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“We expect the state AP pension funds […] to lead
the way and set a good example in their work on
climate change and other sustainability issues.
Therefore, we urge the AP pension funds and other
institutional investors, as a first step, to increase
transparency and to explore the possibilities for
reporting the CO2 emissions associated with their
investment portfolios.”
www.cdp.net | @CDP 8
www.cdp.net | @CDP
Divest or engage (or both)! Some investors simply divest from all fossil fuel companies
! Other responsible investors in oil & gas companies are
engaging with the companies to discuss their strategy and how
they are managing risks, including stranded assets
! Either way, dialogue is important to achieve change (if you
divest tell them you’re doing it)
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www.cdp.net | @CDP
Oil & gas sector engagement! Oil & gas majors, they have easier choices to make about where to invest capital and can divert finance to lower carbon options as part of their integrated energy strategy ! Specialist companies, such as exploration and production companies or pure-play coal producers, have little choice other than to change their business completely and therefore meaningful engagement is harder for investors
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www.cdp.net | @CDP
3 questions investors should ask companies! What is your strategy to deliver long-term value to shareholders? ! Where do you see major growth opportunities over the coming decades? ! What oil price and carbon price are you assuming for capex decisions?
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www.cdp.net | @CDP
CDP’s O&G information request! CDP is gradually increasing its focus on a number of key sectors over the next 3 years
! This development will be piloted on the Oil & Gas sector (O&G), which has been
prioritized for its relevance to climate change
! Identify the most meaningful metrics for investors, address concerns on reporting
burden, and build a scoring methodology that incentivizes transparency and relevant
sector-specific action
! Includes questions on stranded assets e.g. scenario analysis, breakeven costs, capital
expenditure
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www.cdp.net | @CDP
O&G working group! CDP is currently running a working group to inform our developments on the O&G sector
! 5 industry representatives & 5 investor representatives
! Contribute to development of improved CDP climate change questionnaire for O&G sector, by:
• Reviewing previous climate change questionnaire
• Providing advice, guidance and recommendations to CDP, as it defines a new O&G climate change questionnaire for 2015
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www.cdp.net | @CDP
Holding and engaging
! Transparency ! Oil and gas reserves ! Current emissions ! Direction in which the business is heading e.g. climate targets, investments, risks & opps
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www.cdp.net | @CDP
!!
!!!Ingo Speich, Senior Fondsmanager, CFA Union Investment (200 bln. USD AuM)
CDP is crucial in assessing the CO2 intensity and consequently the risk profile of a company. Hence Union Investment declines to discharge the supervisory and the management board of a DAX30 company, if it did not follow on the request to disclose its emissions to CDP.
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www.cdp.net | @CDP
Example: CDP Carbon Action Program 2012
350+ selected companies200+ dedicated large asset managers...and this is the result one year later!
497 Million Tonnes Reduction von Treibhausgasen allein in einem Jahr
(CDP Carbon Action 2012)= this accord for half of the annual emissions of Germany
www.cdp.net | @CDP
CDP Carbon Action: Investors asks certain companies to set targets
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+3.0% Points p.a.!higher emission reductions
+0.7% Points p.a.!higher annual RoI per activity
Source: CDP Carbon Action Report 2013
www.cdp.net | @CDP
“Aiming for A” initiative A coalition of UK asset owners and managers convening for collective engagement with ten major listed companies in the utilities and extractive sectors.
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