Improved climate performance for Orkla
Orkla’s climate performance is better than the average for Nordic listed companies and its greenhouse gas emissions are declining, according to the report from CDP’s review of 5,500 of the world’s largest listed companies.
CDP is a global, independent, not-for-profit organisation that holds the world’s largest database with information on companies’ emissions and climate change management. The CDP analysis covers policy, climate and energy accounts, initiatives and improvements. The number of companies that report to CDP is increasing every year, and around 5,500 of the world’s largest listed companies now participate in the survey. Based on their responses, the companies are given a score, the highest being 100A.
As one of the largest companies on the Oslo Stock Exchange, Orkla has reported to CDP since 2008, and was one of the first companies in Norway to do so. This year, Orkla achieved a score of 90B. This is a marked improvement from last year, when the Group’s score was 79C. The average for Nordic companies this year is 80C. This means that Orkla has a clearer strategy for addressing climate change, has a better overview of its own greenhouse gas emissions, and has a greater understanding of the company’s exposure to climate change challenges than the average for Nordic listed companies. An improvement from C to B means that the company’s greenhouse gas emission trend is moving in the right direction. This is a consequence of all the actions, large and small, that are taken by Orkla companies, such as increasing energy efficiency and replacing fossil fuels.
“We are pleased with this result. It gives us a clear indication of where we stand and what we have to focus more attention on,” says Inger Johanne Eikeland, SVP Environment, Health and Safety at Orkla ASA.
“This reporting system enables Orkla to measure its performance against that of other companies in the same sector, and provides a good tool for implementing our own measures and highlighting Orkla’s exposure to the threat posed by climate change. The reporting to CDP is currently a significant part of Orkla’s general corporate responsibility and sustainability work,” says Inger Johanne Eikeland.
In 2014, for the first time, Orkla has participated in CDP’s forests programme, which was established in 2012. Deforestation is the cause of 10–15% of global greenhouse gas emissions. CDP will assist companies and investors in understanding and managing their exposure to risk associated with five agricultural commodities: timber products, biofuel, palm oil, soya oil and cattle products. A total of 148 companies have reported on their policies, risks and actions, and the results are described in the report "Deforestation-free supply chains. From commitment to action" (PDF).
Adaptation to climate change is profitable
Climate change adaptation is profitable because it reduces companies’ energy costs. At the same time, CDP analyses show that companies that achieve high scores in CDP’s global ranking also generate a higher return on average for their shareholders. This trend appears to be continuing and could indicate that tomorrow’s winners are among the companies that adopt a proactive approach to the climate change threat. This is good for both society at large and the shareholders.
A total of 767 institutional investors stand behind CDP, representing banks, pension funds, insurance companies and fund managers around the world. Every year, inquiries are sent to companies to ask how they are addressing the climate change threat. The investors’ objective is to gain a better understanding of how vulnerable they are to climate change through their investment portfolio. They then use this information to help ensure that companies take action to reduce emissions. Investors are making increasingly active use of the information, among other things to reduce their own risk, which in turn means that companies who score poorly or choose not to respond may be deleted from investment portfolios. In Norway, CDP is supported by Folketrygdfondet, NBIM, KLP, Storebrand and DNB. Other Nordic investors include Nordea, SEB and Danske Bank.