Climate change spurs industry restructuring: survey

OSLO (Reuters) - Climate change is spurring a “worldwide economic and industrial restructuring” as more and more of the world’s largest companies seek to confront global warming, an investor survey said on Monday.

A swallow flies past smoke billowing from the chimneys of a cement plant on the outskirts of Xiangfan, central China's Hubei province May 12, 2007. The battle to beat climate change has come down to one weapon -- the price of carbon. And analysts say it is not working. REUTERS/Stringer

Even so, some big firms were still doing far too little to identify risks and opportunities from climate change, according to the Carbon Disclosure Project (CDP), representing more than 315 institutional investors managing $41 trillion in assets.

A record 77 percent of the world’s top 500 firms, rated by market capitalization in the FT500, answered a request for information about their responses to global warming, up from 72 percent in 2006, it said.

“One trend above all is becoming increasingly clear: climate change and the various regulatory, policy and business responses to it are driving what amounts to a worldwide economic and industrial restructuring,” a 92-page survey said.

“That restructuring has already begun to redefine the very basis of competitive advantage and financial performance for both companies and their investors,” it said.

The project, in its fifth year, seeks to guide investors by getting companies to give details of their greenhouse gases and strategies for everything from energy efficiency to recycling.

“Seventy-six percent of responding companies reported implementing a greenhouse gas emissions reduction initiative,” up from 48 percent in the previous FT500 survey, it said.

U.N. climate experts say that warming, blamed mainly on greenhouse gases emitted by burning fossil fuels, will bring more droughts, heatwaves, floods, rising seas.

At the launch of the survey in New York, former U.S. President Bill Clinton said it was unrealistic to believe governments would do anything to tackle climate change if it would hurt economic growth.

But he said he believed that a properly organized attack on global warming would provide wealthy countries with “the biggest economic boom since we mobilized for World War Two” and would spread benefits of economic growth further among developing countries than normal expansion of trade and investment.

“You have got oil over $70 (a barrel), most of what we need to do is economical right now if we were properly organized, financed and there was sufficient market knowledge of what the real options are,” Clinton said.


In a series of examples of change, the survey said brewer Anheuser-Busch BUD.N was trying to develop crops resistant to extreme weather. Oil group Total TOTF.PA aimed to cut flaring of associated gas 50 percent by 2012 compared to 2005.

Alcoa AA.N had increased its purchase of recycled aluminum by 20 percent in 2006 while a range of carmakers was working to develop more hybrid electric-fuel vehicles.

“Investors are looking for the next big thing. If the company is part of the problem on climate change, it hasn’t a clear run at the markets of the 21st century,” Paul Dickinson, chief executive officer of the CDP, told Reuters.

The CDP sent requests to 2,400 companies around the world and got 1,300 responses. In the FT500, Europe-based companies led in response rates. U.S.-based firms lagged and none of seven Chinese companies replied.

The CDP also published a first index of firms with what it said were best carbon disclosure practices, including mining group Rio Tinto RIO.AX, energy firm Iberdrola IBE.MC, computer firm Hewlett Packard HPQ.N or Westpac Banking


Still, it said too many firms failed to reply, such as Apple Computer AAPL.O, Bank of China .3988.HK, Berkshire Hathaway BRKa.N, Gazprom GAZP.MM or Philips Electronics


“We find it absolutely incomprehensible why a company will fail to respond to a legitimate request from its shareholders,” said Dickinson. “Have they got something to hide? Do they think they operate in a complete vacuum?”

In a linked survey of top U.S. companies in the SP500, response rates were 56 percent -- a majority for a first time and up from 47 percent a year earlier. The United States is outside the U.N.’s Kyoto Protocol for curbing emissions.

Additional reporting by Michelle Nichols in New York