CDP-2015-China.pdf

1 CDP Climate Change Report 2015 China Edition Written on behalf 822 of investors with US95 trillion in assets CDP Report | October 20152 CDP 2015 climate change scoring partners CDP works with a number of partners to deliver the scores for all our responding companies. These partners are listed below along with the geographical regions in which they provide the scoring. All scoring partners have to complete a detailed training course to ensure the ology and guidance are applied correctly and the scoring results go through a comprehensive quality assurance process before being published. In some regions there is more than one scoring partner and the responsibilities are shared between multiple partners. In 2015, CDP worked with RepRisk, a business intelligence provider specializing in ESG risks , who provided additional risk research and data into the proposed A-List companies to assess whether they were severe reputational issues that could put their leadership status into question. Australia their inclusion is not an endorsement of them. CDP , their affiliated member firms or companies, or their respective shareholders, members, partners, principals, directors, officers and/or employees, may have a position in the securities of the companies discussed herein. The securities of the companies mentioned in this document may not be eligible for sale in some states or countries, nor suitable for all types of investors; their value and the income they produce may fluctuate and/or be adversely affected by exchange rates. CDP Worldwide’ and ‘CDP’ refer to CDP Worldwide, a registered charity number 1122330 and a company limited by guarantee, registered in England number 05013650. © 2015 CDP Worldwide. All rights reserved. Please note The selection of analyzed companies in this report is based on market capitalization of regional stock indices whose constituents change over time. Therefore the analyzed companies are not the same in 2010 and 2015 and any trends shown are indicative of the progress of the largest companies in that region as defined by market capitalization. Large emitters may be present in one year and not the other if they dropped out of or entered a stock index. ‘Like for like’ analysis on emissions for sub-set of companies that reported in both 2010 and 2015 is included for clarity. Some dual listed companies are present in more than one regional stock index. Companies referring to a parent company response, those responding after the deadline and self-selected voluntary responding companies are not included in the analysis. For more ination about the companies requested to respond to CDP’s climate change program in 2015 please visit https// cutive Chairman CDP foreword Paul Dickinson President and CEO, Hewlett Packard Enterprise foreword Meg Whitman Global overview The Climate A List 2015 2015 Leadership Criteria China Snapshot Commentary Appendix I Investor signatories and members Appendix II Largest non-responders by market capitalization 4 5 6 10 12 14 15 16 174 Paul Dickinson cutive Chairman CDP CDP was set up, almost 15 years ago, to serve investors. A small group of 35 institutions, managing US4 trillion in assets, wanted to see companies reporting reliable, comprehensive ination about climate change risks and opportunities. Since that time, our signatory base has grown enormously, to 822 investors with US95 trillion in assets. And the corporate world has responded to their requests for this ination. More than 5,500 companies now disclose to CDP , generating the world’s largest database of corporate environmental ination, covering climate, water and forest-risk commodities. Our investor signatories are not interested in this ination out of mere curiosity. They believe, as we do, that this vital data offers insights into how reporting companies are confronting the central sustainability challenges of the 21st century. And the data, and this report, shows that companies have made considerable progress in recent years – whether by adopting an internal carbon price, investing in low-carbon energy, or by setting long-term emissions reduction targets in line with climate science. For our signatory investors, insight leads to action. They use CDP data to help guide investment decisions – to protect themselves against the risks associated with climate change and resource scarcity, and profit from those companies that are well positioned to succeed in a low-carbon economy. This year, in particular, momentum among investors has grown strongly. Shareholders have come together in overwhelming support for climate resolutions at leading energy companies BP , Shell and Statoil. There is ever increasing direct engagement by shareholders to stop the boards of companies from using shareholders’ funds to lobby against government action to tax and regulate greenhouse gasses. This activity is vital to protect the public. Many investors are critically assessing the climate risk in their portfolios, leading to select divestment from more carbon-intensive energy stocks – or, in some cases, from the entire fossil fuel complex. Leading institutions have joined with us in the Portfolio Decarbonization Coalition, committing to cut the carbon intensity of their investments. This momentum comes at a crucial time, as we look forward to COP21, the pivotal UN climate talks, in Paris in December. A successful Paris agreement would set the world on course for a goal of net zero emissions by the end of this century, providing business and investors with a clear, long- term trajectory against which to plan strategy and investment. Without doubt, decarbonizing the global economy is an ambitious undertaking, even over many decades. But the actions that companies are already taking, and reporting to CDP , show that corporate leaders understand the size of the challenge, and the importance of meeting it. We are on the threshold of an economic revolution that will trans how we think about productive activity and growth. We are beginning to decouple energy use and greenhouse gas emissions from GDP , through a process of ‘dematerialization’ – where consumption migrates from physical goods to electronic products and services. This will create new assets, multi-billion dollar companies with a fraction of the physical footprint of their predecessors. Similarly, there is a growing realization that ‘work’ is no longer a place, but increasingly an activity that can take place anywhere. And it no longer relies on the physical, carbon-intensive infrastructure we once built to support it. In the 19th century we built railway lines across the globe to transport people and goods. Now we need to create a new of transportation, in the of broadband. Investment in fixed and mobile broadband will create advanced networks upon which the communications-driven economy of the 21st century can be built – an economy where opportunity is not limited by time or geography, and where there are no limits to growth. An economic revolution of this scale will create losers as well as winners. Schumpeter’s ‘creative destruction’, applied to the climate challenge, is set to trans the global economy. It is only through the provision of timely, accurate ination, such as that collected by CDP , that investors will be able to properly understand the processes underway. Our work has just begun. Decarbonizing the global economy is an ambitious undertaking, even over many decades corporate leaders understand the size of the challenge, and the importance of meeting it. We are on the threshold of an economic revolution that will trans how we think about productive activity and growth.5 Meg Whitman President and CEO, Hewlett Packard Enterprise Climate change is one of the most complex challenges facing business and governments. At Hewlett Packard Enterprise, we believe that by uniting people, ideas and technology, we can help solve many of the world’s challenges, including climate change. The way we respond will have a profound and permanent impact on the health and prosperity of future generations. As country leaders gather at COP21 to discuss a new global agreement to combat climate change, the message from climate scientists is clear greenhouse gases are contributing to the warming of our planet at an alarming rate. We must take swift and bold action to address the root causes of climate change. This means disrupting the status quochanging the way we do business, holding ourselves and others accountable, and creating innovative solutions that drive a low-carbon economy. The Ination and Communication Technology ICT industry is uniquely suited to combat climate change by enabling more sustainable business models and revolutionizing industries at speed and scale. But even as technology transs other industries, we also must work to reduce the carbon footprint of the ICT industry. By 2020, 30 billion connected devices will generate unprecedented amounts of data. And this will only increase. This massive amount of data is collected, processed, stored and managed in large- scale data centers around the world, which collectively consume a tremendous amount of energy. Soon, we may not be able to make enough energy to keep up with the needs of these enormous data centers. Today, data centers that power the public cloud use more energy than the countries of Germany and Japan combined, and may soon require more energy than we can even produce each year. Clearly, we must reduce the energy demand and space requirements of data centers. That’s why Hewlett Packard Labs is focused on reimagining computing at its core. The Machine is our transative research initiative that we believe will fundamentally change the architecture of computing which has stood unchallenged for 60 yearsenabling a quantum leap in perance and efficiency. We estimate that The Machine will use only 1 percent of the energy per calculation achievable today. We believe this is the type of disruptive innovation that is required to sustainably meet the data needs of the future. At the same time, we must address data center energy at the source. In July, we signed a 12-year power purchase agreement for 112 megawatts MW of wind power with SunEdison, Inc. This agreement is sufficient to power 100 percent of our Texas-based data center operations, which support Hewlett Packard Enterprise’s entire internal global ination technology IT requirements and the delivery of IT services to a portion of our customers. I’m thrilled to say that this agreement will help us reach our 2020 operational greenhouse gas emissions reduction goal by the end of fiscal year 2015, five years ahead of schedule. This action also makes us the first global IT company to set and achieve a science-based operational target in part using CDP and World Wildlife Fund’s The 3 Solution 1 . The 3 Solution provides corporations with a guide for setting targets on a track to stay below the 2 degrees Celsius increase identified as a critical threshold, while driving profits. Science-based goals help promote accountability and maximize impact, which is why we joined CDP and other business leaders in supporting the We Mean Business ‘Commit to Action’ initiative, in which we committed to develop corporate environmental goals that are based on climate science. We invite other forward-thinking companies to join us in supporting We Mean Business, sending a clear signal to global leaders that we are taking bold and meaningful action to combat climate change. We are proud to stand with CDP , both as Hewlett Packard in the past and in the future as Hewlett Packard Enterprise, to help create a more secure, prosperous future for all. It is our hope that when future generations look back at 2015, they recognize this as the year that business and government leaders took the necessary action to combat climate change and drive a sustainable economy. We must take swift and bold action to address the root causes of climate change. This means disrupting the status quochanging the way we do business, holding ourselves and others accountable, and creating innovative solutions that drive a low-carbon economy. 1 https// cent-solution-r eport.pdf 6 Global overview And they are acting to seize this opportunity. The latest data from companies that this year took part in CDP’s climate change program – as requested by 822 institutional investors, representing US95 trillion in assets – provide evidence that reporting companies are taking action and making investments to position themselves for this transition. Growing momentum from the corporate world is coinciding with growing political momentum. Later this year, the world’s governments will meet in Paris to forge a new international climate agreement. Whatever the contours of that agreement, business will be central to implementing the necessary transition to a low-carbon global economy. The case for corporate action on climate change has never been stronger and better understood. With the scientific evidence of manmade climate change becoming ever more incontrovertible, leading companies and their investors increasingly recognize the strategic opportunity presented by the transition to a low-carbon global economy. Business is already stepping up. The United Nations Environment Programme estimates that existing collaborative emissions reduction initiatives involving companies, cities and regions are on course to deliver the equivalent of 3 gigatons of carbon dioxide reductions by 2020. That’s more than a third of the ‘emissions gap’ between existing government targets for that year and greenhouse gas emissions levels consistent with avoiding dangerous climate change. Those investors who understand the need to decarbonize the global economy are watching particularly closely for evidence that the companies in which they invest are positioned to transition away from fossil fuel dependency. By requesting that companies disclose through CDP , these investors have helped create the world’s most comprehensive corporate environmental dataset. This data helps guide businesses, investors and governments to make better-ined decisions to address climate challenges. This report offers a global analysis of the current state of the corporate response to climate change. For Board or senior management responsibility for climate change incentives for the management of climate change issues Active emissions reduction initiatives Engagement with policymakers on climate issues Emissions data for 2 or more Scope 3 categories Intensity emissions reduction targets Scope 1 data independently verified Absolute emission reduction targets Scope 2 data independently verified 8000 80 9400 94 4700 47 7500 75 6000 60 8400 84 2