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S&P 500 Companies Faulted For Poor Climate Disclosure

First-Ever Report Shows “Severely Lacking”; Disclosure by S&P 500 Companies; Poor Responses Cited Among Retail, Bank and Insurance Industries

January 31, 2007 – Despite growing financial losses in various business sectors from climate change, over half of the nation’s 500 largest publicly traded companies are doing a poor job of disclosing climate change risks to their investors, according to a first-ever report analyzing climate disclosure practices among S&P 500 companies last year.
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BOSTON, MA & BETHESDA, MD Jan 31, 2007

Despite growing financial losses in various business sectors from climate change, over half of the nation’s 500 largest publicly traded companies are doing a poor job of disclosing climate change risks to their investors, according to a first-ever report analyzing climate disclosure practices among S&P 500 companies last year.

The Ceres/Calvert report released today concludes that America’s largest companies still aren’t taking climate change seriously enough. Less than half (47 percent) of the S&P 500 companies responded to a global survey last year by the Carbon Disclosure Project requesting information about their climate risks and strategies, and those that did respond failed to provide much of the information investors are seeking. Nearly a third (30 percent) of the responders, in fact, declined to publicly release their responses, calling them “confidential.”

“Many US companies are still downplaying climate change and its far-reaching business impacts,” said Mindy S. Lubber, president of Ceres, a leading coalition of investors, environmental groups and other public interest organizations. “More-extreme weather events, regulatory changes and growing global demand for climate-friendly technologies are just a few of the ways that climate change will ripple across all sectors of the economy. Yet, many US companies are not addressing these trends and are leaving investors in the dark about their strategies for mitigating those risks.”

Poor survey responses among lower-emitting companies – in particular, retailers, banks and insurers – was especially conspicuous. Many companies in these sectors provide insufficient climate disclosure to investors, even after suffering large financial losses from climate-related events, such as the 2005 hurricanes. Lubber said that all companies should disclose their risks using the three most common disclosure mechanisms: SEC filings, CDP, and sustainability reports using Global Reporting Initiative guidelines.

“All companies have a duty to provide shareholders with more analysis and disclosure on climate risks and their strategies for managing or mitigating those risks,” said Dr. Julie Fox Gorte, vice president and chief social investment strategist at Calvert. “Lower-CO2-emitting sectors and companies also face potential risks from new regulations, physical changes, and other climate-related impacts. Power and oil companies are improving their climate disclosure and it is now time for retailers, banks and telecommunication companies to start doing the same.”

"This report underscores the need for the SEC to take action to include climate risk as part of their ‘materiality’ standard for corporate reporting, and for the companies of the S&P 500 to take heed,” said Howard Rifkin, Deputy Treasurer, State of Connecticut. “The good news is that a coalition of investors have developed a set of reporting guidelines—the Global Framework for Climate Risk Disclosure—that corporations can use."

The Ceres/Calvert analysis was based on S&P 500 company responses to a questionnaire distributed last year by the Carbon Disclosure Project (CDP), to obtain more information relating to corporate management of climate change. CDP is a coordinated effort by 225 global investors with total assets of $31 trillion. The report authors used the Global Framework for Climate Risk Disclosure to analyze the quality of responses.

Other key findings from the Ceres/Calvert report include:

Poor Greenhouse Gas Emissions Management: 80 percent of the 228 companies that responded to the survey (182 companies) addressed the need to reduce greenhouse gas emissions, but only a quarter (59 companies) disclosed measurable emissions reductions targets and specific time frames for reductions.

Physical Impacts Not on Radar Screen: Nearly 75 percent of the responding companies (171 companies) acknowledged bottom-line risks associated with extreme weather events such as hurricanes, fires and floods. However, very few of the companies surveyed link more-extreme weather to climate change and fewer still—only four percent – disclosed strategies for mitigating and adapting to the growing physical impacts from climate change.

The case for action is clear, since the climate problem for S&P firms – and the shareholders who invest in them – is expected to grow even more severe. The report notes that climate change is expected to increase the severity of future hurricanes, as scientific evidence indicates that ocean warming is increasing their intensity. In fact, the energy released by the average hurricane has risen by about 70 percent in the past three decades, just as sea surface temperatures have increased during the same period. Scientists say warming temperatures are also contributing to record heat waves and more damaging wildfires and hailstorms across the U.S.

International, national and state regulations will have a similar rippling effect, as companies will come under increasing pressure to improve their energy efficiency, switch fuels or invest in emission controls. While momentum for mandatory federal climate legislation is growing, California and seven Northeastern states are already taking regulatory action to reduce global warming pollutants. Meanwhile much of Europe is pushing to reduce GHG emissions under a cap-and-trade carbon emissions trading program already valued at about $30 billion a year. All companies—including retailers, banks, oil producers and utilities—will be affected by these regulations. Understanding how individual companies and industries incorporate these regulations into capital investment decisions and strategic planning is increasingly critical to a complete understanding of a company’s health and financial value.

The executive summary and full Ceres/Calvert report is available online at and


The Ceres/Calvert Report is based on the responses of U.S. companies to the fourth request for information sent by the Carbon Disclosure Project in February 2006, on behalf of 225 investors. The responses were evaluated against the Global Framework for Climate Risk Disclosure, a statement of the information that a growing number of investors now expect from companies on their climate change risks. The Ceres/Calvert report is one of a family of 11 CDP reports that analyze the responses of over 900 companies worldwide and can be found on the CDP Web site at



Ceres is a national coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges such as global climate change. Ceres also directs the Investor Network on Climate Risk, a group of more than 50 institutional investors managing $3.7 trillion in assets. Ceres published a recent report, Corporate Governance and Climate Change: Making the Connection, that evaluates and ranks 100 leading global companies on their climate governance practices. For more information on the March 2006 report, visit


Since 1976, Calvert has set industry standards for asset management excellence - in selecting companies for its portfolios and in serving clients' interests. Calvert’s investment approach emphasizes rigorous fundamental research that goes beyond traditional measures to uncover companies with long-term value. Today, more than 400,000 investors entrust over $14 billion in assets to Calvert. Calvert offers one of the largest families of socially responsible mutual funds whose holdings are screened across seven key areas: Governance/Ethics, Workplace, Environment, Product Safety and Impact, International Operations and Human Rights, Indigenous Peoples' Rights, and Community Relations.

Ceres and Calvert Group commissioned this analysis by David Gardiner & Associates. This report was made possible by the financial support of Calvert, Nathan Cummings Foundation, Rockefeller Brothers Fund, Skoll Foundation and United Nations Foundation.