American and European companies dominate the top 10 in a ranking of businesses that emit the least amount of carbon per generated revenue.
US software companies Oracle and Adobe, along with the American biotechnology business Biogen, occupy the first three places in the 2016 ranking created by ET Index Research, a startup supported by EU climate innovation initiative Climate-KIC.
Dutch and a Spanish telecommunications companies KPN and Telefonica are also included in the top 10, as are French supermarket chain Carrefour and Belgian biotechnology company UCB.
— ET Index Research (@eti_research) December 6, 2016
The ET Global Carbon Rankings are the most comprehensive public analysis of the world’s largest listed companies based on their carbon efficiency – the amount of carbon they emit for every million dollars of revenue they generate.
Nearly half of the world’s 800 largest listed companies have disclosed their emissions, and have improved their carbon efficiency by 15 per cent in the last year, but there are huge variations in performance according to ET Index
The rankings reveal that out of the world’s 2,000 biggest companies, the 1,000 least carbon-intensive have outperformed the 1,000 most carbon-intensive over the last five years.
ET Index says the analysis highlight how investors can help drive decarbonisation of the economy, and make money by switching investment to favour companies with above-average levels of carbon efficiency.
“It is virtually impossible to imagine a scenario in which carbon-intensive companies, across the entire value chain, are not penalised after the Paris Agreement,” said Sam Gill, co-founder and CEO of ET Index Research.
— ET Index Research (@eti_research) December 5, 2016
If the dirtiest 50 per cent of disclosers achieved just mid-range carbon intensity for their sector, they could cut close to 1.5 billion tonnes of CO2 – as much as Japan emits in a year.
“Some companies can be over 100 times less carbon intensive than others in the very same industry. Backing the champions makes sense because carbon-efficient companies have outperformed the market average over the last five years,” said Chris Huhne, the UK’s former secretary of state for energy and climate change and co-chair of ET Index Research.
Measuring The Value Chain
The rankings are the only public index that incorporates companies’ value chains, using data in areas such as the transportation of raw materials or the use of their products.
Gill points out that Honda’s carbon intensity is 43 times higher when you consider consumer use of its vehicles and other value chain related emissions.
“[These] emissions are vital in understanding the full extent of a company’s exposure to carbon risk because they usually account for by far the largest part of its carbon footprint,” said Gill.
Making the business case for climate action through the development and integration of new metrics, finance and decision-making mechanisms is one of Climate-KIC’s top priorities. Its Low Carbon City Lab programme, for example, explores climate finance solutions at city-level.
Climate-KIC’s Oasis suite of catastrophe modelling and risk analytics tools helps cities, governments and businesses manage catastrophe and climate-related risks.
Find out more about how Climate-KIC works on climate change decision metrics and finance.