2016 ET CARBON RANKINGS REPORT

FOREWORD 

1 

2016 ET CARBON RANKINGS REPORT 

TRACKING THE CARBON EFFICIENCY OF THE WORLD’S LARGEST LISTED COMPANIES 

2016 CARBON RANKINGS REPORT 

ET INDEX RESEARCH

2 CONTENTS 

3 About ET Index Research 

4 Foreword 

7 Executive Summary 

Engaged indexes, carbon risk and performance 

10 Index investing and its implications for reducing carbon risk 

11 Engaged Tracking (ET) indexes 

12 Decarbonising portfolios without sacrificing performance 

Understanding the ET Carbon Rankings 

14 Sector breakdown 

16 Disclosure 

21 The importance of Scope 3 (value chain) emissions 

Carbon reduction potential 

24 Benchmarking median carbon efficiency 

25 Carbon reduction potential by sector 

28 Carbon reduction potential by industry 

ET Global Carbon Rankings 2016 

34 ET Global 800 Carbon Leaders 

35 Carbon Efficiency Sector Rankings 

36 ET Carbon Disclosure Leaders 

38 ET Sector Carbon Leaders 

40 ET Industry Carbon Leaders 

ET Carbon Ranking methodology 

43 ET Carbon Ranking Universe 

44 Methodology 

47 Spotlight on Scope 3 

48 Treatment of Scope 3 in the ET Carbon Ranking methodology 

48 Overcoming the lack of data 

49 Disclosure requirements, current emissions and intensity 

Appendix 

50 Regional results 

53 Information for reporting companies 

54 Sustainable Industry Classification System (SICS) taxonomy 

56 The ET Carbon Ranking Quality Assurance Panel 

59 References 

ET INDEX RESEARCH 

2016 CARBON RANKINGS REPORT

3 

ABOUT ET INDEX RESEARCH 

ET Index Research is a mission-driven 

organisation dedicated to helping investors 

and corporates identify, understand, and 

manage climate and carbon-related risks. 

We help investors to reduce their 

exposure to carbon risk without sacrificing 

performance. Our methodology is designed 

to shift investment towards carbon-efficient 

companies across the economy. Engaged 

Tracking (ET) Investors take a systematic 

approach - incentivising the world’s largest 

companies to lower their greenhouse gas 

emissions and to improve the levels of 

transparency in their carbon and climate 

risk reporting. 

We do this by producing the most 

comprehensive public ranking of the 

world’s largest listed companies according 

to the carbon intensity of their activities; by 

analysing carbon risk in investor portfolios; 

and by producing low-carbon and fossilfree 

indexes that can be used by investors 

as benchmarks or to create customisable 

low-carbon investment strategies. 

ET Index Research is supported by family 

office investors and Climate-KIC, the 

European Union’s main climate innovation 

initiative. For more information or to view 

the public ET Carbon Rankings, please 

visit etindex.com. 



4 

FOREWORD 

Investors need to be aware that the 

landmark Paris Climate Agreement has 

changed the macroeconomic environment. 

The world is now set on a pathway towards 

economy-wide decarbonisation. The arrival 

of carbon pricing and mandatory climate 

risk disclosure in key capital markets poses 

new business risks and opportunities. The 

US coal sector is in decline. European power 

utilities face an existential crisis. 1 It is clear 

that industries and companies that choose to 

ignore technological shifts and underestimate 

the rapidity of the shift to a low-carbon 

economy will suffer financially. 

The G7 nations have committed to 

phasing out fossil-fuel subsidies by 2025 

and renewable energy has finally arrived 

at scale. In many countries, clean power 

generation is now cheaper, on average, 

than fossil fuels. Costs of clean power will 

continue to fall as technology and efficiency 

improve. This trend will accelerate as fossil 

fuel subsidies are phased out across the 

G7 economies. 

Carbon-intensive companies that do not 

prepare for the transition will be penalised 

by the market. By ratifying the Paris Climate 

Agreement, governments have provided a 

clear signal to all investors that the economy 

will decarbonise at an ever-increasing rate. As 

a result, we expect to see an ever-accelerating 

shift in the allocation of capital away from highcarbon 

assets towards lower-carbon ones. 

It is clear that there will be winners and 

losers in the race to decarbonise the 

global economy. Prudent investors should 

be seeking to understand what economywide 

decarbonisation will look like. They 

should also consider how to honour 

fiduciary duties to their beneficiaries in that 

context, while noting that the modern legal 

definition of fiduciary duty covers the prudent 

management of all material financial risks, 

including carbon and climate risk. 2 

ET Index Research has demonstrated the 

importance of identifying carbon risk 

and the link between carbon emissions 

and equity returns in a special report. 3 

Consistent with this research, the ET Global 

800 Low Carbon Transition Index tracks the 

world’s 800 largest companies, but reduces 

carbon exposure by 75% by weighting 

investment towards more carbon- efficient 

companies and away from carbon- intensive 

ones. If a pension fund had pursued a lowcarbon 

investment strategy, tracking this 

index from the first ET Carbon Rankings in 

2011 to October 2016, it would have earned 

1.78% more each year than by tracking the 

same companies in a conventional index. 

To make informed decisions about which 

companies are exposed to carbon risk in 

the new market ushered in by the Paris 

Climate Agreement, investors need, as a 

starting point, reliable greenhouse gas 

emissions data on investee companies. 



FOREWORD 

5 

The international Financial Stability 

Board recognises the issue of carbon risk 

and has set up a Task Force on Climate 

Related Financial Disclosures to make 

recommendations on how companies 

should disclose climate-related financial 

information so that investors and other 

capital market participants can “understand 

the concentrations of carbon-related assets 

in the financial sector and their exposures to 

climate-related risk”. 4 

For investors to get a full picture of 

carbon risk they need to go beyond 

direct emissions from a company’s own 

activities (Scope 1 and 2) and understand 

indirect emissions from the activities in 

its value chain (Scope 3), from production 

of the raw materials it uses to the use of the 

goods it sells. Scope 3 emissions are typically 

the largest source of emissions within a 

company’s total footprint, and a major 

source of its carbon and climate-related risk. 

These value chain carbon costs can affect 

a company’s suppliers and customers, and 

the viability of a company’s core business. 

Costs linked to increased regulation and 

explicit emissions pricing cannot always 

be passed through the supply chain or 

to the final consumer. The materiality of 

Scope 3 emissions has been most strongly 

demonstrated in the US coal industry, 

where tightening emissions regulation has 

combined with other factors to decimate 

shareholder value. 5 

The financial importance of Scope 

3 emissions data has been revealed 

by ET Index Research analysis of the 

performance of high-carbon and lowcarbon 

intensity companies. 6 Over the 

2010-2016 period, low-Scope 3 intensity and 

low-Scope 1 and 2 intensity portfolios both 

outperformed high-intensity portfolios, by 

7.2% and 4.8%, respectively. The greater 

performance difference between portfolios 

sorted on Scope 3 intensity further confirms 

the financial materiality of Scope 3 emissions, 

in addition to basic Scope 1 and 2 emissions. 

At present, not every country enforces 

mandatory corporate greenhouse gas 

emissions reporting across Scope 1, 2 and 

3. 7 Therefore, one of the key functions of the 

ET Carbon Rankings is to shine a light on 

companies around the world that are failing 

to place this information into the public 

domain in a clear, comparable, and complete 

format; and to encourage them to disclose. 

Corporate emissions reporting will be a 

central metric in tracking the transition 

to a low-carbon economy and managing 

transition risk. The central function of the 

Paris Climate Agreement is to guide a global 

response to the threat of climate change 

by keeping global temperature rises to well 

below 2 °C. This requires a rapid transition to 

net zero emissions across all sectors of the 

economy. 7 Market pricing of carbon and 

climate-related risk, whether it be direct 

or indirect, will necessarily be focused on 

greenhouse gas emissions. 

For the prudent investor, following a lowcarbon 

investment strategy is a logical 

imperative. However, not all low-carbon 

strategies are created equal. According to 

Martin Skancke, Chair of the UN PRI, investors 

“need to differentiate between products that 

reduce individual exposure to carbon risk 

versus those that reduce collective aggregate 

climate change risk.” An investor who merely 

shifts the weights in their portfolio to lowcarbon 

stocks, without engaging with other 

market participants or investee companies, 

reduces their own exposure to carbon risk 

but does nothing to reduce systemic risk. 

An investor who not only reduces their own 

exposure but also engages with other market 

participants and investee companies to 

encourage the flow of capital to low-carbon 

investments, benefits both themselves and 

the market. 



6 

FOREWORD 

Reducing the systemic threat of climate 

change is a priority for all investors. Empirical 

research has shown that a 1 degree Celsius 

increase in global average temperature leads 

to a 5.7% decline in equity valuations. Thus, 

at current rates, each year’s global emissions 

are reducing stock market returns by 0.1%. 9 

ET Index Research was established 

specifically to address the systemic nature 

of carbon risk. 10 The ET Carbon Rankings 

and the corresponding ET Low Carbon Index 

Series reduce individual investor exposure 

to carbon risk by shifting capital away from 

high-carbon companies in all sectors, while 

closely tracking the market. They reduce 

aggregate exposure to carbon and climate 

risk by clearly signalling to the largest listed 

companies and their supply chains that they 

must decarbonise in order to move up the 

Rankings and gain a greater weighting within 

the Index. A greater weighting in the Index 

means companies receive a larger share 

of invested capital. The ET Index Research 

methodology provides investors with a 

tool to drive capital market alignment with 

economy-wide decarbonisation targets 

agreed to in Paris. 

This mechanism offers investors a systematic 

and cost-effective approach to helping the 

world avoid the worst effects of climate 

change. Let’s use it. 

James Cameron & Chris Huhne, 

Co-Chairs, ET Index Research 

James Cameron 

Chris Huhne 



7 

EXECUTIVE SUMMARY 

The 2016 ET Carbon Rankings are a tool 

for investors to monitor and manage 

exposure to carbon risk, enabling them to 

identify companies that are decarbonising 

their operations. They measure the 

carbon efficiency of the world’s largest 

2,000 listed companies, making up 85% of 

global stock market value. They account 

for approximately $45 trillion in market 

capitalisation and approximately 9.5 billion 

tonnes of CO2 in direct emissions, an 

amount that exceeds the combined total 

emissions of the United States, Canada and 

the European Union. 11 

They are the only publicly available rankings 

to assess both the carbon efficiency of 

companies’ direct operations (Scope 1 

and 2 emissions) and of their full value 

chain (Scope 3), from transportation of raw 

materials to the use of the products they sell. 

Scope 3 emissions are of critical importance 

to investors because they typically make up 

75% of companies’ carbon footprints and 

therefore reveal their exposure to increased 

costs across their value chain. 12 

By focusing on carbon efficiency – how 

much carbon each company emits for 

every $1 million of revenue generated 

– the Rankings allow investors to make 

direct comparisons between companies of 

different sizes and across different sectors. 13 

They look at each of the largest listed 

companies by region, according to market 

capitalisation. They do not exclusively focus 

on leading or laggard companies in terms of 

emissions or disclosure. 

The Paris Climate Agreement came into force 

in November 2016 committing the world’s 

nations to decarbonise the global economy. 

Few, if any, sectors will be unaffected. 14 The 

debate about the low-carbon transition has 

largely focused on fossil fuel companies and 

divestment, but the ET Carbon Rankings 

take a systemic approach that is designed to 

encourage decarbonisation in every sector, 

supporting the transition to a low-carbon 

economy and a climate-secure world. 

The ET Carbon Rankings are designed to 

encourage investors to switch investment 

to more carbon-efficient companies, 

reducing their own exposure to carbon 

risk and rewarding companies that take 

action and disclose. 

The Rankings are produced using a 

transparent methodology and based on 

publicly available carbon data for the 

reporting year ending in 2015. Data is 

subjected to a rigorous verification process 

and reviewed by the ranked companies. The 

Rankings are overseen by an independent 

quality assurance panel which consists of 

professionals from different disciplines and 

backgrounds who review the methodology, 

assisting the process of integrating new 

rules as and when they become feasible and 

appropriate. Please refer to the appendix for 

more details on the Panel. 



8 


Key Findings 

• Carbon-efficient stocks perform 

better than carbon-intensive stocks. 

A portfolio formed of the stocks in 

the most carbon-efficient half of the 

ET Carbon Rankings Universe, has 

outperformed a corresponding portfolio 

formed of the most carbon-inefficient 

half of the universe by 9% over five years. 

• Companies that report their emissions 

are making rapid progress in 

decarbonising their operations. Among 

the world’s 800 largest listed companies, 

363 reported their Scope 1 and 2 

emissions. These disclosers increased 

their carbon efficiency by an average 

of 15% from 2015 to 2016, saving 360 

million tonnes of CO2, equivalent to the 

annual emissions of Turkey. 

• Leading companies could save 

the equivalent of Japan’s annual 

emissions by achieving mid-range 

carbon efficiency for their sector. 

Analysis of just the 363 companies that 

have reported Scope 1 & 2 emissions 

shows that if the most carbon-intensive 

companies achieved the median level of 

carbon efficiency it would save 1.4 billion 

tonnes of CO2, equivalent to the annual 

emissions of Japan. 

• Just 27 companies in five carbon-intensive 

industries could save 1.2 billion tonnes of 

CO2. If these companies achieved the median 

level of Scope 1 and 2 carbon efficiency for 

their industry it would save twice as much 

CO2 as South Korea emits each year. The 

industries are: Electric Utilities; Oil and Gas 

Exploration and Production; Construction 

Materials; Chemicals; and Real Estate Owners, 

Developers and Investment Trusts. 

• Computer software company Oracle is 

the world’s most carbon-efficient 

company, producing just 34 tonnes of 

carbon dioxide across Scopes 1, 2 and 3 for 

every $1 million of revenue. The median 

carbon efficiency across the world’s 2,000 

largest listed companies is 1,538 tonnes 

across Scopes 1, 2 and 3. 

• Most companies are still not aware of the 

benefits of carbon emissions disclosure. 

The number of companies reporting public 

and complete Scope 1 and 2 emissions has 

grown from 38% in 2011 to 41% in 2016. 

• Few companies are reporting emissions 

from their value chain, but this is 

changing rapidly. Reporting of full 

Scope 3 emissions doubled from 1% of 

companies in 2015 to 2% in 2016. 

• 25 companies make it into the ET Carbon 

Disclosure Leaders list, which is reserved 

for companies that disclose complete 

Scope 1 and 2 emissions that have been 

independently assured by a third-party and 

that disclose all 15 Scope 3 Categories. 

“ It is quite clear that the low carbon transition is underway, with carbon 

intensity falling 2.8% globally in 2015. As a result, investors will be increasingly 

asking companies to disclose the risks and opportunities arising from climate 

change. This will include Scope 1, 2 and 3 emissions, and increasingly the wider 

financial impacts of climate change, such as the impact on asset valuations, 

investments, disposals and earnings. Better disclosure by companies is 

therefore a must if markets are to correctly identify and price climate risk and 

direct capital to low carbon opportunities. This is at the core of the work of the 

FSB Task Force on Climate-related Financial Disclosures.” 

Jon Williams, Partner, Sustainability and Climate Change, PwC 




9 

Carbon Context 

The historic Paris Climate Agreement puts 

carbon risk on the agenda for all investors 

with the commitment to keep global 

temperature rises below 2 °C. It includes 

specific reference to ensuring that finance 

flows in alignment with the pathway towards 

low greenhouse gas emissions and climateresilient 

development. 

Mark Carney, Governor of the Bank of 

England and chairman of the international 

Financial Stability Board (FSB), has warned 

that action to limit climate change could 

leave fossil fuels and other high-carbon 

investments as worthless stranded assets 

threatening investors with huge losses. 15 

A task force set up by the FSB is due to make 

recommendations in December 2016 on how 

asset owners and the companies they invest 

in should report on the potential impact of 

climate change on their bottom line. 

There is also growing awareness of the 

importance of reporting and reducing 

emissions across companies’ full value 

chain. Dell, Toyota and Unilever are among 

more than 200 companies worldwide that 

have signed up to the Science Based Targets 

initiative and pledged to reduce emissions 

in line with the global commitment to keep 

climate change below 2 °C. 16 This includes 

carrying out a full assessment of their Scope 

3 emissions. 

World leaders have committed to avoiding 

dangerous climate change. It is now vital 

for the world’s largest companies to show 

leadership on emissions accounting and 

reporting, and setting decarbonisation 

targets. Those that act will play an important 

part in achieving that goal. Those that fail to 

act risk seeing their businesses undermined 

by global action to cut carbon. 

The ET Carbon Rankings have three key objectives to support the transition to a 

low-carbon economy and a climate-secure world: 

1. They enable investors to identify 

their exposure to carbon risk and 

manage it by switching investment to 

more efficient companies across the 

economy or within sectors. 

2. They provide investors with an 

engagement tool that incentivises 

companies to reduce and disclose 

their carbon emissions. 

3. They underpin the ET Low Carbon 

and Fossil Free Index Series, allowing 

investors to closely track traditional 

market indexes such as the FTSE 

100 or S&P 500, achieving significant 

carbon reductions without sacrificing 

performance. 

“ As stated in the recent BlackRock Investment Institute paper ‘Adapting portfolios 

to climate change’, we think that incorporating climate considerations in the 

investment process should and can be a fiduciary duty. On top of this, low carbon 

indices have the potential to perform in line with or better than parent indices.” 

Isabelle Rucart, Head of Sustainable ETFs & Index Investments, BlackRock 



10 

ENGAGED INDEXES, CARBON RISK AND 

PERFORMANCE: INDEX INVESTING AND ITS 

IMPLICATIONS FOR REDUCING CARBON RISK 

Index investing strategies – also referred to 

as passive investing – are rapidly growing as 

a proportion of the market. In 2016, passive 

equity vehicles accounted for over 40% of 

total US equity fund assets, up from 18.8% a 

decade ago, according to Morningstar. 17 This 

is representative of the global trend, with over 

$4 trillion in savings now in index funds. 

The reason for this shift in assets is clear. 

Investors are disillusioned with active 

investing strategies that charge higher fees 

and typically fail to perform better than more 

cost-effective index-based counterparts. 18 

In a low-return environment where fees 

and performance come under particularly 

harsh scrutiny, it is hard to see an end to this 

accelerating shift towards passive investing, 

particularly as technology continues to drive 

down costs. This has important ramifications 

for how financial flows can be guided to 

address the financial risks and opportunities 

linked to climate change. 

Firstly, stock market indexes, acting as 

benchmarks for fund performance or as the 

basis of investment strategies, will occupy an 

increasingly important role in the allocation 

of capital across the economy. However, pure 

index investing strategies reward companies 

solely on the basis of current financial 

performance and fail to anticipate future risks 

and opportunities such as those created by 

the low-carbon transition. 

Secondly, the role of investor engagement on 

climate change with investee companies will 

become an increasingly important function 

for index houses and passive investment 

funds. Blackrock, Vanguard and other asset 

management giants have been openly 

criticised for their failure to use their position 

of significant influence to vote on shareholder 

resolutions relating to climate change. 19 



ENGAGED INDEXES, CARBON RISK AND PERFORMANCE 

11 

ENGAGED TRACKING INDEXES 

Engaged Tracking Indexes embed the 

principle of investor engagement directly 

into the index investment strategy. They 

include non-financial criteria, such as 

sustainability indicators, when weighting 

companies within the index. The index 

provider contacts index constituents to 

inform them of the non-financial criteria on 

which they will be ranked and what steps are 

required to improve their position. 

Simply put, companies have to do better on 

non-financial performance to move up the 

rankings and to attract more investor capital. 

This provides an innovative and costeffective 

form of index investing which 

incorporates stewardship principles and 

shareholder engagement. Engaged Tracking 

Indexes clearly communicate investor 

expectations to constituent companies. They 

are a systematic tool for reallocating capital 

according to non-financial performance in a 

transparent manner. 

ET Low Carbon Indexes go beyond 

reweighting companies according to the 

intensity of their direct carbon emissions 

and take into account the full scope of their 

carbon footprint. Reweighting within the 

index is done according to a company’s ET 

Carbon Rank®, which includes Scope 1, 2 

and 3 emissions. The ET Low Carbon Index® 

methodology incentivises ever increasing 

disclosure and lowering of emissions 

since these are the criteria upon which the 

Rankings are based. 

ET Low Carbon Indexes enable investors to 

position themselves in a forward looking 

way to reduce their exposure to systemic 

carbon risk, while simultaneously signalling 

to investee companies that investors expect 

a swift transition to more carbon-efficient 

business models. They provide a systematic 

tool for redistributing capital from high to 

low-carbon companies in the most efficient 

manner possible. 

In the case of the ET Carbon Rankings and 

corresponding ET Low Carbon and Fossil 

Free Index Series, constituent companies are 

informed of the following Engaged Tracking 

Investor expectations: 

• Measure and disclose a full Scope 1, 2 and 

3 greenhouse gas emissions inventory. 

• Disclose in annual reports how action to 

limit global warming as part of the Paris 

Agreement may affect operations. 

• Publish business transition plans that 

explain how the company will manage the 

business risks and opportunities arising 

from a 2 °C regulatory environment, 

including those related to GHG emissions, 

capital expenditure, remuneration policy, 

and political spending, among other 

enterprise risks. 

• Communicate how such a business 

transition plan can be implemented. 



12 


DECARBONISING PORTFOLIOS WITHOUT 

SACRIFICING PERFORMANCE 

ET Index Research offers a suite of indexes 

which track major market indexes like the 

S&P 500 allowing investors to significantly 

reduce their exposure to carbon risk without 

sacrificing performance. Each index provides 

three options allowing investors to balance 

reduction in carbon exposure against tracking 

error (standard deviation from performance 

of the conventional portfolio). Custom 

variations based on the Rankings can also be 

created to suit specific investor requirements. 

ET Low Carbon Tracker Index Series: 

25% reduction in emissions versus the 

conventional index. Very low tracking error – 

suitable for pension funds and other tracking 

error constrained investors. 

ET Low Carbon Benchmark Index Series: 

50% reduction in emissions versus the 

conventional index. Low tracking error based 

on balance between carbon reduction and 

deviation from the conventional index. 

ET Low Carbon Transition Index Series: 

75% reduction in emissions versus 

conventional index. Medium tracking error – 

focused on carbon reduction. 

Table 1 demonstrates that ET Low Carbon 

Indexes can achieve very significant 

reductions in carbon emissions while 

generating similar returns to the conventional 

indexes they track. 

It compares the performance of a 

conventional index of the world’s 800 largest 

listed companies with three ET Low Carbon 

Indexes investing in the same companies, 

but adjusting their weightings based on their 

position in the ET Global 800 Carbon Ranking. 

All three weighted indexes delivered better 

returns over five years and two outperformed 

over three years. 

The Engaged Tracking approach can be used 

to create low-carbon versions of any index. 

Other global indexes such as the FTSE All 

World, MSCI All Country World Index and S&P 

Global 1200 achieved similar performances 

over the same time frame as the ET Global 

800 Low Carbon Index Series, highlighting the 

potential of the ET Global 800 Low Carbon 

Index Series as a viable index benchmark. 




13 

Index 

Carbon 

Intensity 

Reduction 

1Y Total 

Returns 

3Y Total 

Returns 

5Y Total 

Returns 

3Y 

Annualised 

Returns 

5Y 

Annualised 

Returns 

ET Global 800 Low Carbon Tracker 25.00% 0.33% 12.87% 57.78% 4.11% 9.54% 

ET Global 800 Low Carbon Benchmark 50.00% -0.41% 13.29% 61.11% 4.24% 10.00% 

TABLE 1: 

ET GLOBAL 800 LOW 

CARBON INDEX SERIES 

PERFORMANCE OVER 

5 YEARS TO END 

OCTOBER 2016. 

ET Global 800 Low Carbon Transition 75.00% -0.77% 15.10% 67.65% 4.79% 10.87% 

Conventional Global 800 - 2.21% 13.02% 54.56% 4.16% 9.09% 

FTSE All World - 2.77% 12.09% 51.74% 3.87% 8.69% 

MSCI ACWI - 2.63% 11.73% 51.20% 3.76% 8.61% 

S&P Global 1200 - 2.62% 13.82% 57.75% 4.41% 9.53% 

The ET Global Carbon Risk Factor tracks the 

difference in returns between low-intensity 

stocks and high-intensity stocks. 

The ‘risk factor’ is calculated by first 

constructing an equal-weight portfolio of all 

stocks in the ET Carbon Rankings Universe 

and then constructing a low-carbon tilted 

version of this portfolio in the same way the 

ET Low Carbon Indexes are tilted. The carbon 

factor is then calculated as the difference 

in return between the tilted and the equalweight 

portfolios. This can be viewed as the 

difference in return between a low- and a 

high-intensity portfolio, formed of the top 

and bottom halves of the ET Carbon Rankings 

Universe, respectively. This makes the carbon 

factor a pure barometer of the performance 

of carbon-tilted strategies over time. 

Figure 1 shows that the low-intensity portfolio 

has outperformed the high-intensity portfolio 

by 9% over the past five years. 

The ET Global Carbon Risk Factor is now 

available on Bloomberg under the ticker 

“ETIXCRBF Index”. 

ET Index Research analysis reveals that 

companies in the top half of the 2015 ET 

Global 800 Carbon Ranking, that is the most 

carbon-efficient 400 global companies, have 

experienced greater Return on Equity, Return 

on Assets, Growth in Net Income, and Growth 

in Revenue over the past year to October 2016 

than companies in the bottom half. 20 

FIGURE 1: 

THE ET GLOBAL CARBON 

RISK FACTOR 



14 

UNDERSTANDING THE ET CARBON 

RANKINGS: SECTOR BREAKDOWN 

The 2016 ET Carbon Rankings measure 

the carbon efficiency of the world’s largest 

2,000 listed companies, making up 85% of 

global stock market value. They account 

for approximately $45 trillion in market 

capitalisation and approximately 9.5 billion 

tonnes of CO2 in direct emissions, an 

amount that exceeds the combined total 

emissions of the United States, Canada and 

the European Union. 

Figure 2 and Table 2 provide a breakdown 

of the global ET Carbon Ranking Universe, 

highlighting the percentage represented 

by each SICS sector across the 2,000 

largest listed companies. Financials makes 

up 19%, with Infrastructure accounting 

for 13%, followed by Technology & 

Communications with 11%. 

FIGURE 2: 

SECTOR BREAKDOWN 

OF THE ET CARBON 

RANKING UNIVERSE – 

2,000 LARGEST LISTED 

COMPANIES. 

Financials 

Infrastructure 

Technology and 

Communications 

Resource 

Transformation 

Non−Renewable 

Resources 

Consumption II 

Services 

Transportation 

Health Care 

Consumption I 

Renewable 

Resources and 

Alternative Energy 

0 5 10 15 20 

Percentage of companies 



UNDERSTANDING THE ET CARBON RANKINGS 

15 

To understand the Rankings results it 

is important to understand the sector 

composition of the Rankings Universe. For a 

breakdown of the ET Sector Carbon Leaders, 

that is the most carbon efficient companies in 

each SICS sector that report complete data, 

please refer to page 38. 

For the ET Industry Carbon Leaders, the 

list reserved for the most carbon efficient 

company in each SICS industry that discloses 

complete data, please refer to page 40. 

The full ET Carbon Ranking can be viewed 

online at etindex.com. 

SICS sector Number of Companies Percentage 

Consumption I 127 6.4% 

Consumption II 155 7.8% 

TABLE 2: 

SECTOR BREAKDOWN 

OF THE ET CARBON 

RANKING UNIVERSE – 


COMPANIES. 

Financials 380 19.2% 

Health Care 129 6.5% 

Infrastructure 260 13.1% 

Non-Renewable Resources 209 10.5% 

Renewable Resources and Alternative Energy 9 0.5% 

Resource Transformation 210 10.6% 

Services 139 7.0% 

Technology and Communications 228 11.5% 

Transportation 138 7.0% 

The ET Carbon Rankings use the Sustainable industry Classification System 

(SICS®) from SASB®, the Sustainability Accounting Standards Board®. The 

SICS categorises companies into 10 sectors, 35 subsectors and 80+ industries 

in accordance with their resource intensity, sustainability impact, and 

sustainability innovation potential. SASB splits the Consumption sector 

into Consumption I, covering food and drink, and Consumption II, covering 

consumer goods. See page 54 of the appendix for the full taxonomy. 



16 


DISCLOSURE 

Disclosure is the first step towards managing Companies that make public their emissions 

and reducing emissions. The proof is in the data demonstrate that they are monitoring 

data. Companies that report their emissions it and are willing to be judged on their 

are making rapid progress in decarbonising efforts. Investors and other stakeholders will 

their operations. 

form a view of companies that do not make 

their emissions data public, often assuming 

Among the world’s 800 largest listed 

the worst. 

companies 363 reported their Scope 1 and 

2 emissions. These disclosing companies Scope 1 and 2 Disclosure 

increased their carbon efficiency by an 

As shown in Figure 3, the number of 

average of 15% from 2015 to 2016, from 

companies reporting complete Scope 1 and 

221 tonnes of carbon dioxide to 189 tonnes 

2 data has remained virtually static since 

for every million dollars of revenue. This 

2015, down 1% from 42% in 2015 to 41% 

reduction has saved approximately 360 

in 2016. Although it has increased since 

million tonnes of carbon dioxide, roughly 

2011, the first year for which the ET Carbon 

equivalent to the annual emissions of Turkey 

Rankings employed an intensity-based 

(please see infographic on page 27). 

ranking system. 

Across the entire ET Carbon Ranking global 

The trend continues towards a greater 

universe of the world’s 2,000 largest listed 

number of companies having their data 

companies, the 812 companies which 

independently assured each year, with 

disclosed full Scope 1 and 2 emissions 

an increase of 28% since 2011 (from 18% 

increased carbon efficiency by 3%. This figure 

to 23%). ET Index Research expects this 

mirrors the findings of the PwC Low Carbon 

trend to continue as the carbon reporting 

Economy Index, which shows a global fall in 

landscape matures. 

the intensity of country-wide emissions of 

2.8% in 2015. 21 3a_HistoricalDisclosureCategories_S12_all_data_Publication 

FIGURE 3: 

SCOPE 1 AND 2 

DISCLOSURE – 2,000 

LARGEST LISTED 

COMPANIES. 

2016 

2015 

2011 

0 25 50 75 100 


Public, complete and 

third−party assurance 

Public, complete and no 


Incomplete 

No public data 




17 

Scope 3 Disclosure 

Scope 3 disclosure is improving rapidly. The 

proportion of companies reporting all 15 

Scope 3 categories increased from 1% to 

2% between 2015 and 2016. The proportion 

of companies reporting 10 or more Scope 

3 categories has increased from 1% to 3% 

over the same period. 

ET Index Research expects to see the 

number of companies reporting full Scope 

3 data grow exponentially as the Science 

Based Targets Initiative gathers momentum. 

The proportion could quickly reach 10% 

as 200 companies have already signed 

up to the initiative at time of publication, 

committing to set carbon emissions 

reduction targets in line with a 2 °C scenario. 

Of particular relevance to the ET Carbon 

Rankings is the requirement that companies 

carry out a full Scope 3 (value chain) 

emissions inventory in order to participate. 

As shown in Figure 4, a large number of 

companies are still failing to complete 

a full Scope 3 inventory whereby all 15 

Scope 3 categories are disclosed, including 

those that are not relevant or material 

to the company. However, although all 15 

categories are not frequently being disclosed, 

meaningful numbers are being disclosed 

in every Scope 3 category by at least one 

company in every SICS sector. The only Scope 

3 category where ET Index Research was 

unable to find a reasonable number was the 

Financial industry which did not disclose a 

meaningful number for Scope 3 Category 15: 

Investments. Several companies completed 

a partial inventory for this category but 

acknowledged that it was far from complete. 

Where no data is available for a given Scope 

3 category at the sector level, the highest 

reported emissions intensity for that category, 

from any company in the universe, is used. 

This is irrespective of the sector. 

Figure 4 shows that 75% of companies 

disclosed no Scope 3 data in 2016; in 2015 

it was 71%. This reflects a tightening of 

ET Index Research criteria rather than a 

fall in disclosure. The Rankings now only 

recognise Scope 3 data that is broken down 

by individual Scope 3 category, whereas in 

previous years a single total Scope 3 number 

was accepted. 

4a_HistoricalDisclosureCategories_S3_all_data_Publication 

2016 

2015 

FIGURE 4: 

SCOPE 3 DISCLOSURE 

BY CATEGORY AND 

TREND OVER TIME – 


COMPANIES. 

2011 

0 25 50 75 100 


15 Categories 

Disclosed 

10 to 14 Categories 

Disclosed 


Disclosed 

No Public Data 



18 


Disclosure by Sector 

As shown in Figure 5, the Renewable 

Resources and Alternative Energy SICS sector 

performs best in terms of the quality of 

disclosure with 67% of companies reporting 

complete data and 44% featuring in the 

top disclosure category: public, complete 

and third-party assured. However, it is 

not particularly surprising that this sector 

performs well, given that being low carbon is 

a key marketing touch point. The ET Carbon 

Rankings feature only nine companies in this 

sector, which includes Vestas Wind Systems. 

The Resource Transformation sector has the 

second-best record with 51% of companies 

disclosing complete data, and 30% having 

their data independently assured. The 

Resource Transformation sector is well 

represented in the Rankings with 210 

companies overall. It includes names such 

as BASF, Dow Chemical and BAE Systems. 

The Transportation sector comes third, with 

39% of companies disclosing complete 

information, and 22% of those having their 

data independently assured. This sector is 

represented by 138 companies and includes 

names such as UPS, Deutsche Post and TNT. 

The Health Care, Financials, and 

Consumption II (consumer goods) sectors 

have the lowest levels of disclosure with 

32%, 34% and 37% disclosing complete data, 

respectively. It could be argued that they are 

traditionally viewed as ‘low risk’ sectors and 

therefore experience less pressure than more 

carbon-intensive sectors to disclose. 

FIGURE 5: 

DISCLOSURE AND 

THIRD-PARTY 

ASSURANCE LANDSCAPE 

AND TREND FOR SCOPE 

1 & 2 DATA BY SECTOR – 


COMPANIES. 

Renewable 

Resources and 


Resource 


Consumption I 


Resources 





Services 


Financials 

Health Care 

0 25 50 75 100 






Incomplete 





19 

Figure 6 shows that Scope 3 disclosure 

follows a similar pattern. The Renewable 

Resources and Alternative Energy sector 

ranks first for the percentage of companies 

disclosing complete Scope 3 data across all 

15 categories, with 11%. It is followed 

by Technology & Communications 

and Transportation with 5% and 4%, 

respectively. 

Renewable 

Resources and 




FIGURE 6: 

SCOPE 3 DISCLOSURE BY 

CATEGORY AND SECTOR 

– 2,000 LARGEST LISTED 

COMPANIES. 


Resource 



Resources 

Consumption I 

Health Care 


Services 

Financials 


0 25 50 75 100 


15 Categories 

Disclosed 


Disclosed 


Disclosed 




20 


Disclosure by Region 

As shown by Figure 7, across the developed 

markets, Europe leads the pack with the 

highest levels of public disclosure of Scope 1 

and 2 data. Two thirds, 67%, of the ET Europe 

300 – Europe’s 300 largest listed companies 

– disclose complete data and 23% disclose 

some data, even though it is classified as 

incomplete according to the ET Carbon 

Ranking methodology. 

3c_DisclosureCategories_S12_Region 

Only 43% of North America’s 300 largest listed 

companies – the ET North America 300 – 

report complete data across Scope 1 and 2. 

The Asia-Pacific region, which is a composite 

of developed and emerging economies, is 

similar to North America, with 41% of the ET 

Asia Pacific 300 disclosing complete Scope 

1 and 2 data. The lowest level of public 

disclosure, 12%, is in the ET BRICS 300 which 

tracks the 300 largest listed companies in 

Brazil, Russia, India, China and South Africa. 

FIGURE 7: 

DISCLOSURE AND 

THIRD-PARTY 

ASSURANCE LANDSCAPE 

AND TREND FOR SCOPE 

1 & 2 DATA BY REGION. 

ET Global 800 

ET Europe 300 

ET North 

America 300 

ET Asia− 

Pacific 300 

ET BRICS 300 

0 25 50 75 100 






Incomplete 


The picture is different for Scope 3 

disclosure (Figure 8): 7% of Asia Pacific 

companies disclose 10 or more categories; 

North America and Europe follow with 

6% and 4%, respectively. Fewer than 1% 

of BRICS companies disclose 10 or more 

Scope 3 categories. 

FIGURE 8: 

DISCLOSURE BY SCOPE 3 

CATEGORY AND REGION 


4c_DisclosureCategories_S3_Region 

ET Europe 300 


America 300 

ET Asia− 

Pacific 300 


0 25 50 75 100 


15 Categories 

Disclosed 


Disclosed 


Disclosed 





21 

THE IMPORTANCE OF SCOPE 3 

(VALUE CHAIN) EMISSIONS 

Scope 3 (value chain) emissions represent 

emissions over which the company has 

influence but not control, ranging from 

production and transportation of raw 

materials to the end use of sold products by 

a company, or business travel. They are of 

critical importance to investors because they 

typically make up 75% of a company’s carbon 

footprint and therefore reveal their exposure 

to increased costs across their value chain. 

Government regulation, the development 

of low-carbon technologies and consumer 

demand are among factors which are 

incentivising low-carbon business models. 

This affects companies in all sectors but the 

impact of these factors is easiest to see in 

high-carbon sectors such as the automobile 

and fossil fuel industries. 

Scope 3 Materiality: Automotive sector 

Automotive companies with higher Scope 

3 emissions are exposed to market risks 

as consumer preference and government 

support switch to lower and zero emissions 

vehicles. 22 Recent scandals, such as those 

involving VW and Mitsubishi Motors, indicate 

how tightening emissions regulations and 

enforcement of existing rules can lead to 

rapid shareholder value destruction. 

Emissions rules are tightening across all G20 

countries and more regulators may follow 

the US Department of Justice in penalising 

misconduct. The world’s largest automotive 

manufacturers must be ready to address the 

environmental and human health impacts 

of excessive air pollution from their product, 

including carbon emissions. 23 

Scope 3 Materiality: Oil, Gas and Coal sector 

Global action to keep climate change below 

2 °C threatens the business model of oil, gas 

and coal companies. Mark Carney, Governor 

of the Bank of England, has warned that vast 

reserves could become unburnable stranded 

assets, threatening investors with huge losses. 

However, companies like Exxon can appear 

carbon-efficient if judged solely on Scope 1 

and 2 emissions. This is particularly true for 

companies that have high revenues and that 

are relatively carbon-efficient in their process 

for extracting and distributing fossil fuels. 

The true impact of a fossil-fuel company is 

in the use of the products it sells (Scope 3 

category 11). 24 Including Scope 3 emissions 

is essential to understanding the carbon 

efficiency of a company such as Exxon and its 

exposure to carbon risk. Furthermore, a drop 

in demand for fossil fuels across the economy 

will directly affect companies in the supply 

chain, so understanding the full extent of a 

company’s carbon exposure throughout the 

value chain is key to understanding the risk. 

Figures 9 and 10 confirm previous analysis by 

ET Index Research and ACCA (the Association 

of Chartered Certified Accountants), finding 

that Scope 3 emissions typically account for at 

least 75% of a company’s carbon footprint. 25 

The data shows that in the relatively small 

sample of companies which have disclosed 

each of the 15 Scope 3 categories, these 

emissions account for 80% of the total 

carbon footprint. Across the larger sample 

of companies that have disclosed at least 10 

Scope 3 categories, that number drops to 

76%. 



22 


FIGURE 9: 

AVERAGE SCOPE 1 

AND 2 INTENSITY 

COMPARED WITH 

SCOPE 3 INTENSITY AS 

A PERCENTAGE OF THE 

TOTAL FOOTPRINT FOR 

COMPANIES DISCLOSING 

ALL 15 SCOPE 3 

CATEGORIES IN THE 

ET CARBON RANKING 

UNIVERSE. 

80% 

20% 

Material Scope 3 categories by sector 

Table 3 seeks to highlight which of the 

15 Scope 3 categories are more likely to 

be material for any given sector. In every 

sector, for each Scope 3 category, the 

maximum percentage of total Scope 3 

intensity represented by that category for a 

single company is shown. The three highest 

categories for each sector are highlighted in 

the table and are likely to be ‘material’. 

FIGURE 10: 

AVERAGE SCOPE 1 

AND 2 INTENSITY 

COMPARED WITH 

SCOPE 3 INTENSITY AS 

A PERCENTAGE OF THE 

TOTAL FOOTPRINT FOR 

COMPANIES DISCLOSING 

AT LEAST 10 SCOPE 3 

CATEGORIES IN THE 

ET CARBON RANKING 

UNIVERSE. 

Average Scope 3 as 

% of Total Intensity 

76% 

Average Scope 3 as 

% of Total Intensity 

Average Scope 1 and 2 

as % of Total Intensity 

24% 

Average Scope 1 and 2 

as % of Total Intensity 

Thus, in the Infrastructure sector we can 

see that Fuel and Energy-related Activities 

make up 99% of one company’s Scope 3 

emissions and Downstream Leased Assets 

make up 97% of another company’s Scope 3 

emissions. Both these categories are likely to 

be highly material. Conversely, Business Travel, 

Employee Commuting, Processing of Sold 

Products and Upstream Leased Assets make 

up no more than 1% of any company’s Scope 

3 emissions within the sector, suggesting these 

may not be material categories for this sector. 

The data sample includes all companies that 

are disclosing 10 or more Scope 3 categories. 

Thus, the percentages can be considered 

to be calculated on fairly complete Scope 

3 disclosures only. If relatively incomplete 

disclosures were included, then a sector 

with a company which disclosed only one 

category would have a 100% maximum 

percentage for that particular category. 

There are likely to be some categories which 

are material but are not highlighted in 

this table, because there has not yet been 

adequate disclosure. The ET Carbon Ranking 

methodology includes all Scope 3 categories 

in the analysis of companies in each sector. 




23 

SICS sector 

Business travel 

Capital goods 

Downstream leased assets 

Downstream transportation and distribution 

Employee commuting 

End of life treatment of sold products 

Franchises 

Fuel-and-energy-related activities 

Investments 

Processing of sold products 

Purchased goods and services 

Upstream leased assets 

Upstream transportation and distribution 

Use of sold products 

Waste generated in operations 

Infrastructure 1% 29% 97% 2% 1% 7% 0% 99% 17% 1% 44% 0% 14% 83% 7% 

Financials 49% 12% 0% 33% 81% 1% 0% 34% 0% 0% 51% 0% 0% 1% 19% 

Resource Transformation 1% 17% 0% 9% 1% 34% 0% 74% 2% 0% 51% 0% 2% 99% 2% 



52% 92% 9% 5% 26% 7% 1% 65% 8% 1% 70% 6% 18% 88% 1% 

Transportation 1% 23% 0% 1% 12% 7% 0% 59% 1% 0% 87% 0% 84% 100% 0% 

Consumption I 5% 16% 0% 8% 1% 34% 0% 2% 34% 0% 72% 0% 7% 5% 1% 

Health Care 6% 36% 1% 5% 4% 4% 0% 7% 6% 0% 76% 2% 16% 60% 5% 

Non-Renewable Resources 0% 1% 0% 9% 2% 4% 0% 43% 0% 96% 53% 0% 19% 99% 0% 

Services 2% 4% 0% 13% 1% 10% 98% 0% 0% 0% 68% 0% 9% 84% 0% 

Consumption II 0% 26% 14% 0% 1% 1% 0% 5% 1% 0% 48% 0% 4% 0% 1% 

Renewable Resources and 


0% 0% 0% 9% 0% 0% 0% 15% 0% 20% 28% 0% 28% 0% 1% 

TABLE 3: MAXIMUM PERCENTAGE OF TOTAL SCOPE 3 EMISSIONS INTENSITY BY CATEGORY. 



24 

CARBON REDUCTION POTENTIAL: 

BENCHMARKING MEDIAN 

CARBON EFFICIENCY 

The ET Carbon Rankings are designed to 

encourage investors to shift investment to 

more carbon-efficient companies, reducing 

their own exposure to carbon risk and 

rewarding companies that take action 

and disclose it. This is intended to drive 

decarbonisation across the economy, by 

incentivising each company to become more 

carbon-efficient. 

The ET Low Carbon Index Series, which is 

based on the ET Carbon Rankings, weights 

investment towards the 50% of companies 

that are less carbon-intensive and away from 

the 50% that are more carbon-intensive. Thus, 

the Index Series rewards companies that 

achieve greater than median carbon efficiency. 

In this section, the median carbon-efficiency 

is used as a benchmark to get a sense of the 

carbon reduction potential associated with 

this approach (see Figure 11). 

Analysis of just the 363 companies that have 

disclosed complete Scope 1 and 2 emissions 

in the ET Global 800 reveals that in each 

sector, if the 50% which are more carbonintensive 

were to achieve the median level 

of carbon efficiency, it would save 1.4 billion 

tonnes of carbon dioxide a year, equivalent 

to the emissions of Japan, the world’s third 

largest economy. 26 

Further analysis reveals that 86% of these 

savings – 1.2 billion tonnes of carbon dioxide, 

equivalent to twice the emissions of South 

Korea – could be made by companies in just 

five industries: Electric Utilities; Oil and Gas 

Exploration and Production; Construction 

Materials; Chemicals; and Real Estate Owners, 

Developers and Investment Trusts. 27 

This analysis only looks at those companies 

that have disclosed complete Scope 1 and 2 

emissions, and does not consider the impact 

of Scope 3 emissions which typically account 

for 75% of companies’ total emissions. It is 

safe to assume that far greater savings could 

be made if the world’s largest companies took 

action to increase their carbon efficiency to 

the median level in their sector across the full 

range of their direct and value chain emissions. 

FIGURE 11: 

CARBON REDUCTION 

POTENTIAL. 

Highest 

Reduction 

to median 

Intensity 

Median 

Reduction 

to lowest 

Lowest 



CARBON REDUCTION POTENTIAL 

25 

CARBON REDUCTION 

POTENTIAL BY SECTOR 

Table 4 shows the potential to reduce 

emissions across the 11 SICS sectors of the 

economy if every company with an emissions 

intensity greater than the median value for 

their sector were to reduce their emissions 

to achieve that level of carbon efficiency. 

Three sectors account for 86% of the entire 

emissions reduction potential, 1.26 billion 

tonnes of carbon dioxide a year. This is one 

and a half times the total emissions from 

global aviation. 28 

The Infrastructure sector is the most 

carbon-intensive of all. If the least carbonefficient 

companies achieved the median 

level it would cut the sector’s emissions by 

53%, saving 579 million tonnes of carbon 

dioxide per year, slightly more than the total 

annual emissions of Canada. 29 AvalonBay 

Communities, Swire Pacific and Vinci are 

among 33 companies disclosing complete 

data in this sector. 

TABLE 4: 

EMISSIONS REDUCTION 

POTENTIAL ACROSS 

THE 11 SECTORS 

(COMPANIES 

DISCLOSING COMPLETE 

SCOPE 1 & 2 DATA) – 

WORLD’S 800 LARGEST 

LISTED COMPANIES. 

SICS sector 

Number of Companies 

Weighted Average Carbon 

Intensity (Scope 1 & 2 

tCO2e/$m Revenue) 

Total Scope 1+2 Emissions of 

Disclosing Companies (tCO2e) 

Total Revenue ($m) 

Median Intensity for sector 

(Scope 1 & 2 tCO2e/$m 

Revenue) 

Average Intensity for sector 


Revenue) 

% Reduction if every Company 

lowers Emissions to level of 

Median Intensity (Scope 1 & 2 


GHG Emissions Reduction 

Potential if every Company 


Median (tCO2e) 

Infrastructure 33 694 1,095,182,247 1,578 327 467 53 579,182,625 

Non-Renewable Resources 31 595 1,753,953,949 2,950 431 488 28 483,076,854 

Resource Transformation 46 198 356,475,870 1,803 91 122 54 192,817,032 



52 44 134,408,182 3,032 25 29 43 57,974,508 

Consumption I 37 90 97,653,019 1,091 63 70 29 28,392,328 

Transportation 28 152 400,877,838 2,637 144 141 5 20,590,672 

Health Care 32 21 37,430,119 1,809 11 13 44 16,639,459 

Financials 59 5 28,257,454 5,457 3 4 37 10,514,678 

Consumption II 23 38 87,684,138 2,326 36 36 6 4,973,246 

Services 20 62 42,279,592 685 55 56 11 4,614,909 

Renewable Resources and 


2 166 2,733,861 16 166 166 – – 

Average 33 188 366,994,206 2,126 123 145 28 127,161,483 

Total 363 2,065 4,036,936,269 23,384 1,352 1,592 310 1,398,776,311 



26 


Non-Renewable Resources is the second 

most carbon-intensive SICS sector. If the least 

carbon-efficient companies achieved the 

median level it would cut sector emissions 

by 28%, saving 483 million tonnes of carbon 

dioxide a year, roughly equivalent to the 

annual emissions of Saudi Arabia. 30 Royal 

Dutch Shell, Siam Cement and Rio Tinto are 

among 31 companies disclosing complete 

data in this sector. 

The Resource Transformation sector has 

the potential to achieve the third greatest 

savings in emissions and the greatest 

percentage reduction. If the least carbonefficient 

companies achieved the median 

level it would cut sector emissions by 54%, 

saving 193 million tonnes of carbon dioxide a 

year, half the annual emissions of Australia. 31 

Mitsubishi Electric Corp, Siemens and General 

Electric are among 46 companies disclosing 

complete data in this sector. 

FIGURE 12: 

SECTORS WITH THE 

GREATEST ABSOLUTE 


POTENTIAL (COMPANIES 







Resources 

Resource 


Consumption I 



Health Care 


Services 


Financials 

Renewable 

Resources and 


0 500,000,000 1,000,000,000 1,500,000,000 

GHG Emissions (tCO2e) 

GHG Emissions after Reduction Potential Achieved 

Potential Reduction in GHG Emissions (tCO2) 

Figure 12 shows the 11 SICS sectors in 

order of their potential to reduce absolute 

carbon emissions, if every company with an 

emissions intensity greater than the median 

value were to achieve the same level as the 

median company within the sector. 

FIgure 13 shows the 11 SICS sectors ranked 

in order of their potential to reduce carbon 

emissions relative to total emissions intensity 

for the sector, under the same scenario as 

Figure 12 and Table 4. The emissions-intensity 

reduction potential is shown by calculating 

the emissions that could be saved if every 

company with an emissions intensity greater 

than the median value were to achieve the 

same level as the median company within the 

sector. 

Figure 14 displays country level emissions 

figures that these reductions can be 

compared to. 




27 



Resources 

Resource 


Consumption I 

FIGURE 13: 

SECTORS WITH 

THE GREATEST 

PROPORTIONAL 









Health Care 


Services 


Financials 

Renewable 

Resources and 


0 200 400 600 800 

Carbon intensity (tCO2e/$m Revenue) 

Carbon Intensity after Reduction 

Potential Achieved 

Potential Reduction in Carbon 

intensity (tCO2e/$m Revenue) 

FIGURE 14: 

GLOBAL CO2 EMISSIONS 

FROM FOSSIL FUEL 

USE AND CEMENT 

PRODUCTION 2014 

CANADA 

566 MT CO2 

GERMANY 

767 MT CO2 

TURKEY 

353 MT CO2 

IRAN 

618 MT CO2 

RUSSIAN FEDERATION 

1,766 MT CO2 

SOUTH KOREA 

610 MT CO2 

UK 

415 MT CO2 

Mt CO2 (million tonnes) 

0 – 100 

MEXICO 

456 MT CO2 

UNITED STATES 

5,335 MT CO2 

BRAZIL 

501 MT CO2 

SAUDI 

ARABIA 

495 

MT CO2 

INDIA 

2,342 

MT CO2 

CHINA 

10,541 MT CO2 

INDONESIA 

453 MT CO2 

JAPAN 

1,279 MT CO2 

100 – 500 

500 – 700 

700 – 1500 

1500 – 5000 

SOUTH AFRICA 

393 MT CO2 

AUSTRALIA 

409 MT CO2 

> 5000 

Source: Emission Database for Global Atmospheric Research (EDGAR) 



28 



BY INDUSTRY 

Infrastructure, Non-Renewable Resources and 

Resource Transformation are the three SICS 

sectors with the greatest opportunity to cut 

carbon. Table 5 delves deeper, looking at the 

SICS industries within these sectors that have 

the greatest potential to reduce emissions if 

every company with an emissions intensity 

greater than the median value were to 

achieve the same level as the median 

company within the sector. 

The Electric Utilities industry, which includes 

companies such as American Electric Power, 

E.ON and Enel, has the greatest potential to 

reduce emissions. If the least carbon-efficient 

companies achieved the median level it 

would save 462 million tonnes of carbon a 

year, slightly more than the annual fossil fuel 

and industrial process emissions of Mexico. 32 

The Oil and Gas Exploration and Production 

industry, which includes companies such 

as Royal Dutch Shell, Total and Conoco 

Phillips, has the next greatest potential to 

reduce emissions. If the least carbon-efficient 

companies achieved the median level it 

would save 294 million tonnes of carbon a 

year, almost the annual electricity emissions 

of Poland. 33 

The third greatest potential for emissions 

reduction is in the Construction Materials 

industry, which includes cement 

companies such as CRH, Siam Cement and 

LafargeHolcim. This industry could save 175 

million tonnes of carbon a year, slightly less 

than the emissions of Vietnam, if the least 

carbon-efficient companies achieved the 

median level. 34 

These three industries together with two 

others, the Chemicals industry and the Real 

Estate Owners, Developers and Investment 

Trusts industry have the potential to save 

nearly 1.2 billion tonnes of carbon a year - 

equivalent to the emissions of Japan - if the 

least carbon-efficient companies achieved 

the median level. 35 

Figure 15 shows the SICS industries within 

the Infrastructure, Non-Renewable Resources 

and Resource Transformation SICS sectors 

in order of their potential to reduce absolute 

carbon emissions, if every company with an 

emissions intensity greater than the median 

value were to achieve the same level as the 

median company within the industry. 





emissions relative to the total emissions 

intensity for the industry. The emissionsintensity 

reduction potential is shown by 

calculating the emissions that could be 

saved if every company with an emissions 

intensity greater than the median value were 

to achieve the same level as the median 

company within the industry. 




29 

TABLE 5: 

EMISSIONS REDUCTION POTENTIAL ACROSS 18 INDUSTRIES IN THE INFRASTRUCTURE, 

NON-RENEWABLE RESOURCES AND RESOURCE TRANSFORMATION SECTORS (COMPANIES 

DISCLOSING COMPLETE SCOPE 1 & 2 DATA) – WORLD’S 800 LARGEST LISTED COMPANIES. 

SICS industry 



Intensity (Scope 1 & 2 tCO2e/$m 

Revenue) 

Total Emissions of Disclosing 

Companies (tCO2e) 


Median Intensity for industry 


Revenue) 

Average Intensity for industry 


Revenue) 



Median Intensity (Scope 1 & 2 



Potential if every company 


Median (tCO2e) 

Electric Utilities 13 1,030 871,567,417 846 484 723 53 462,340,833 

Oil and Gas – Exploration and 

Production 

15 547 1,243,022,897 2,273 418 482 24 294,165,687 

Construction Materials 4 2,239 274,397,777 123 807 1,153 64 175,476,159 

Chemicals 16 629 261,941,435 417 273 393 56 147,989,602 

Real Estate Owners, Developers 

and Investment Trusts 

9 621 107,138,767 172 79 149 87 93,513,175 

Industrial Machinery and Goods 8 158 44,092,472 279 33 50 79 34,784,243 

Gas Utilities 3 382 28,863,371 76 102 194 73 21,134,869 

Oil and Gas – Midstream 3 1,357 90,340,081 67 1,232 1,084 9 8,311,307 

Containers and Packaging 2 363 19,130,478 53 275 275 24 4,669,812 

Electrical and Electronic 

Equipment 

12 35 21,574,662 615 30 31 15 3,266,246 

Metals and Mining 5 463 137,853,744 298 454 408 2 2,665,132 

Oil and Gas – Services 3 80 6,796,369 84 51 59 36 2,458,569 

Engineering and Construction 

Services 

5 49 19,446,541 399 43 42 11 2,193,748 

Aerospace and Defense 8 22 9,736,823 440 17 18 22 2,107,128 

Waste Management 1 1,672 36,915,487 22 1,672 1,672 – – 

Integrated Utilities 1 5,231 31,000,022 6 5,231 5,231 – – 

Iron and Steel Producers 1 15 1,543,082 106 15 15 – – 

Home Builders 1 4 250,642 57 4 4 – – 

Average 12 828 178,089,559 352 623 666 39 88,320,199 

Total 220 15,725 3,383,701,626 6,685 11,843 12,649 586 1,324,802,983 



30 


FIGURE 15: 

INDUSTRIES WITH THE 








Electric Utilities 

Oil and Gas − Exploration & Production 

Construction Materials 

Chemicals 



Industrial Machinery and Goods 

Gas Utilities 

Oil and Gas − Midstream 

Containers and Packaging 

Electrical and Electronic Equipment 

Metals and Mining 

Oil and Gas − Services 

Engineering and Construction Services 

Aerospace and Defense 

Integrated Utilities 

Waste Management 

Home Builders 

Iron and Steel Producers 

0 400,000,000 800,000,000 1,200,000,000 


Carbon emissions after Reduction 


Potential Reduction in 


FIGURE 16: 

INDUSTRIES WITH 

THE GREATEST 

PROPORTIONAL 











Chemicals 

Gas Utilities 








Electrical and ElectronicEquipment 




Home Builders 


0 2,000 4,000 6,000 

Carbon Intensity (tCO2e/$m Revenue) 








31 

Table 6 shows the best and worst performers 

in the five most carbon-intensive industries, 

illustrating the huge differences in Scope 1 

and 2 carbon efficiency. In Electric Utilities, the 

worst performer, Electric Power Development 

of Japan, is 16 times less carbon-efficient 

than the industry median and 133 times less 

efficient than the best performer, Italy’s Terna 

Rete Eletrrica Nazionale. A similar picture 

emerges in other industries. 

It should be noted that the worst performers in 

this table are at least measuring and disclosing 

their emissions, an indication that they are 

also likely to be managing them. In every 

industry there are many more companies 

which are not even disclosing their emissions. 

The best Scope 1 and 2 performers are not 

necessarily the best when Scope 3 is taken 

into account. For example, when value chain 

emissions are added Germany’s E.On is the 

industry leader in Electric Utlities with a carbon 

efficiency of 1,869 tCO2e/$m revenue compared 

with Terna Rete’s 6,588 tCO2e/$m revenue. 

Table 7 shows the reduction potential if every 

company within the industries highlighted 

below were to reduce its emissions to the 

level of the most carbon-efficient company 

within the same industry (the ‘lowest’ is 

illustrated in Figure 11). Companies should 

compete on carbon efficiency as they 

compete in other areas and target industryleading 

emissions intensity. 

Analysis of the 363 companies that have 

disclosed complete Scope 1 and 2 emissions 

in the ET Global 800 reveals that if every 

company were to achieve the carbon 

efficiency of the industry leaders it would save 

2.8 billion tonnes of carbon dioxide a year, 

just below the annual emissions of India. 36 

The greatest gains can be made within the Oil 

and Gas – Exploration and Production industry. 

If every company were to lower its emissions 

to the level of the best in the industry, savings 

of 1.22 billion tonnes of carbon dioxide could 

be made. This is equivalent to twice the annual 

emissions of South Korea. 37 

The Electric Utilities industry could save 0.78 

billion tonnes of carbon dioxide, equivalent 

to the emissions of Germany while the 

Chemicals industry could save 0.25 billion 

tonnes carbon dioxide, equivalent to the 

emissions of Ukraine. 38 

These are not trivial sums and highlight 

that investors have a key role to play in 

encouraging all investee companies to align 

with industry best practice. 

TABLE 6: 

BEST AND WORST 

CARBON EFFICIENCY 

PERFORMERS IN THE 

FIVE MOST CARBON- 

INTENSIVE INDUSTRIES 

(COMPANIES 





Name Country SICS industry 

Scope 1 & 2 Intensity 

(tCO2e/$m Revenue) 

Industry Median 

Intensity Scope 1 & 2 

(tCO2e/$m Revenue) 

% of 

Median 

Terna Rete Elettrica Nazionale SpA Italy Electric Utilities 61 484 13% 

Electric Power Development Co Ltd Japan Electric Utilities 8,127 484 1,679% 

Genel Energy Plc UK Oil and Gas Exploration and Production 5 418 1% 

Cairn Energy Plc UK Oil and Gas Exploration and Production 4,123 418 986% 

Sika AG Switzerland Construction Materials 28 807 3% 

UltraTech Cement Ltd India Construction Materials 9,443 807 1,170% 

Johnson Matthey Plc UK Chemicals 29 273 11% 

Petronas Chemicals Group Bhd Malaysia Chemicals 13,961 273 5,114% 

Prologis Inc 

US 

Real Estate Owners, Developers and 

Investment Trusts 

3 79 4% 

Hopewell Holdings Ltd 

Hong Kong 



16,440 79 20,810% 



32 


TABLE 7: 


POTENTIAL ACROSS 

18 INDUSTRIES IN THE 

INFRASTRUCTURE, NON- 

RENEWABLE RESOURCES 

AND RESOURCE 

TRANSFORMATION 

SECTORS IF ALL COMPANIES 

LOWERED EMISSIONS 

TO THE LEVEL OF THE 

MOST CARBON-EFFICIENT 

COMPANY (COMPANIES 





SICS industry 

Figure 17 shows the SICS industries within the 

Infrastructure, Non-Renewable Resources and 

Resource Transformation SICS sectors in order 

of their potential to reduce absolute carbon 

emissions, if all companies reduced their 

emissions intensity to the level of the most 

carbon-efficient company within their industry. 





Intensity (Scope 1 & 2 tCO2e/$m 

Revenue) 

Total Emissions of Disclosing 

Companies (tCO2e) 




emissions relative to the total emissions 

intensity for the industry. The emissionsintensity 

reduction potential is shown by 

calculating the emissions that could be saved 

if every company reduced its emissions 

intensity to the level of the most carbonefficient 

company within its industry. 

Minimum Intensity for Industry 

(Scope 1 & 2 tCO2e/$m Revenue) 

Average Intensity for industry 

(Scope 1 & 2 tCO2e/$m Revenue) 


lowers Emissions to level of most 

Carbon Efficient Intensity (Scope 

1 & 2 tCO2e/$m Revenue) 


Potential if every Company 

lowers emissions to level of of 

most carbon efficient (tCO2e) 


Production 

15 547 1,243,022,897 2,273 10 482 98 1,220,978,775 

Electric Utilities 13 1,030 871,567,417 846 109 723 89 779,768,017 

Chemicals 16 629 261,941,435 417 32 393 95 248,730,805 

Construction Materials 4 2,239 274,397,777 123 296 1,153 87 238,176,753 



9 621 107,138,767 172 3 149 99 106,586,984 

Metals and Mining 5 463 137,853,744 298 221 408 52 72,162,609 

Oil and Gas – Midstream 3 1,357 90,340,081 67 451 1,084 67 60,302,305 

Industrial Machinery and Goods 8 158 44,092,472 279 10 50 93 41,196,052 

Gas Utilities 3 382 28,863,371 76 94 194 75 21,780,144 


Equipment 


Services 

12 35 21,574,662 615 15 31 59 12,655,628 

5 49 19,446,541 399 25 42 50 9,682,108 

Containers and Packaging 2 363 19,130,478 53 186 275 49 9,339,624 

Aerospace and Defense 8 22 9,736,823 440 13 18 42 4,054,821 

Oil and Gas – Services 3 80 6,796,369 84 35 59 57 3,865,787 

Waste Management 1 1,672 36,915,487 22 1,672 1,672 – – 

Integrated Utilities 1 5,231 31,000,022 6 5,231 5,231 – – 

Iron and Steel Producers 1 15 1,543,082 106 15 15 – – 

Home Builders 1 4 250,642 57 4 4 – – 

Average 12 828 178,089,559 352 468 666 71 199,097,510 

Total 220 15,725 3,383,701,626 6,685 8,890 12,649 1,068 2,986,462,657 




33 



Chemicals 







Gas Utilities 

Electrical and Electronic Equipment 

FIGURE 17: 

INDUSTRIES WITH THE 



POTENTIAL IF ALL 

COMPANIES LOWERED 

EMISSIONS TO THE 

LEVEL OF THE MOST 

CARBON-EFFICIENT 

COMPANY IN THEIR 

INDUSTRY (COMPANIES 











Home Builders 


0 400,000,000 800,000,000 1,200,000,000 


Carbon emissions after Reduction 


Potential Reduction in 







Chemicals 


Gas Utilities 





FIGURE 18: 

INDUSTRIES WITH 

THE GREATEST 

PROPORTIONAL 


POTENTIAL IF ALL 

COMPANIES LOWERED 

EMISSIONS TO 

THE LEVEL OF THE 

MOST EFFICIENT 

COMPANY IN THEIR 

INDUSTRY (COMPANIES 






Electrical and ElectronicEquipment 




Home Builders 


0 2,000 4,000 6,000 

Carbon intensity (tCO2e/$m Revenue) 







34 

ET GLOBAL CARBON RANKINGS 2016: 

ET GLOBAL 800 CARBON LEADERS 2016 

The ET Global 800 Carbon Rankings rank the 

800 largest listed companies in the world 

according to their carbon efficiency, based 

on the intensity of their combined Scope 1, 2 

and 3 emissions. 

Computer software company Oracle tops 

the Rankings. It generates just 34 tonnes 

of carbon dioxide for every $1 million of 

revenue, making it nearly four times as 

carbon-efficient as the company in tenth 

place. Other companies have lower Scope 1 

and 2 emissions but its Scope 3 performance 

puts it firmly at the front of the pack. 

Table 8 shows the ET Global 800 Carbon 

Leaders, the top ten most carbon-efficient 

companies in the ET Global 800. They include 

four each from North America and Europe 

and two from Asia Pacific. Five are from the 

Health Care sector, four from Technology 

& Communications and one from the 

Consumption sector covering the manufacture 

and retail of consumer goods, which are among 

the most carbon-efficient sectors. 

TABLE 8: 

ET GLOBAL 800 CARBON 

LEADERS 

ET Global 

800 

Carbon 

Rank 

Company name 

Scope 1, 2 & 

3 Intensity 

(tCO2e/$m 

Revenue) 

Scope 1 & 

2 Intensity 

(tCO2e/$m 

Revenue) SICS sector Region 

1 Oracle Corp 34 10 



North America 

2 Biogen Inc 40 5 Health Care North America 

3 Adobe Systems Inc 41 9 



North America 

4 UCB SA 73 15 Health Care Europe 

5 Amgen Inc 74 17 Health Care North America 

6 Astellas Pharma Inc 75 22 Health Care Asia-Pacific 

7 CSL Ltd 99 43 Health Care Asia-Pacific 

8 Telefonica SA 110 33 



Europe 

9 Carrefour SA 131 37 Consumption II Europe 

10 Koninklijke KPN NV 133 5 



Europe 



ET GLOBAL CARBON RANKINGS 2016 

35 

CARBON EFFICIENCY SECTOR RANKINGS 

Some sectors are inherently more carbonintensive 

than others, so it is no surprise 

that the financial sector is the most 

carbon-efficient sector and Resource 

Transformation, Infrastructure and Non- 

Renewable Resources are at the bottom. 

Table 9 shows the average rank of each 

sector across the 2016 ET Global 800 

Carbon Ranking along with the average 

Scope 1, 2 and 3 intensity. As one would 

expect, the average rank is roughly in line 

with the average Scope 1, 2 and 3 intensity 

for each sector. 

Notably, Technology & Communications, 

despite having many highly-ranked 

companies, has a relatively poor average 

rank and relatively high average Scope 1, 2 

and 3 intensity. This is because this sector 

also has many companies that are either 

relatively carbon-intensive, or that are poor 

disclosers. The same can be said for the 

Services sector. 

Sector rank SICS sector Average Rank 

Average Scope 1, 2 & 3 

Intensity 

1 Financials 141 359 

TABLE 9: 

AVERAGE ET GLOBAL 

800 CARBON RANK BY 

SECTOR 

2 Consumption II 39 194 969 

3 Health Care 294 629 

4 Technology and Communications 332 1091 

5 Renewable Resources and Alternative Energy 397 837 

6 Consumption I 40 411 1343 

7 Transportation 480 2440 

8 Resource Transformation 615 13367 

9 Services 628 6409 

10 Infrastructure 668 14686 

11 Non-Renewable Resources 686 18779 



36 


ET CARBON DISCLOSURE LEADERS 2016 

ET Carbon Disclosure Leaders are the 

companies that are doing most to measure 

and communicate their carbon exposure. 

These are companies that are reporting 

public, complete data for Scope 1 and 

2 emissions, obtaining independent 

assurance of this data, and disclosing all 

15 Scope 3 Categories. 

In 2016 there are 25 companies that make 

it into the list. Many of them are never 

likely to feature as one of the top ten most 

carbon-efficient companies because they 

are in more carbon-intensive sectors such as 

Resource Transformation and Infrastructure. 

Most of them are not even leaders in their 

own sector. However, these are companies 

that are proactively seeking to manage their 

carbon risk exposure. 

By measuring and reporting on carbon 

emissions across their operations they are 

demonstrating that they are taking the issue 

seriously and gathering the information 

they will need to improve their carbon 

efficiency. Companies that disclose their 

Scope 1 and 2 emissions increased their 

carbon efficiency by 15% from 2015 to 2016, 

going from 221 tonnes of CO2 per million 

dollar of revenue to 189. 

The Asia-Pacific region is the most heavily 

represented region with 10 companies, 

followed by Europe with 8, North America 

with 6, and BRICS with 1. 

Table 10 includes companies from the ET 

Carbon Ranking Universe, which covers 

the world’s 2,000 largest listed companies. 

Companies in the ET Global 800 Rankings 

have their rank listed. 




37 

Company name SICS sector Region Revenues $m 

Scope 1, 2 & 

3 Intensity 

(tCO2e/$m 

Revenue) 

Scope 1 & 

2 Intensity 

(tCO2e/$m 

Revenue) 


Carbon Rank 

Mondelez International Inc Consumption I North America 29,636 573 52 300 

Aeon Co Ltd Consumption II Asia-Pacific 57,458 124 20 NA 

Baxter International Inc Health Care North America 9,968 540 70 284 

Biogen Inc Health Care North America 10,764 40 5 2 

Sanofi Health Care Europe 38,696 282 28 34 

British Land Co PLC/The Infrastructure Europe 897 14,162 56 NA 

Exelon Corp Infrastructure North America 29,447 4,086 426 570 

Ferrovial SA Infrastructure Europe 10,768 394 56 175 

Gas Natural SDG SA Infrastructure Europe 28,948 5,494 833 599 

Cemex SAB de CV Non-Renewable Resources North America 14,254 4,095 3,388 NA 

Kumba Iron Ore Ltd Non-Renewable Resources BRICS 2,847 43,664 422 NA 

Royal Dutch Shell PLC Non-Renewable Resources Europe 264,960 2,594 306 511 

TOTAL SA Non-Renewable Resources Europe 143,421 4,057 319 569 

Akzo Nobel NV Resource Transformation Europe 16,494 1,533 215 443 

BASF SE Resource Transformation Europe 78,199 1,846 275 448 

Omron Corp Resource Transformation Asia-Pacific 7,746 1,122 36 NA 

Toshiba Corp Resource Transformation Asia-Pacific 60,849 1,318 50 NA 

Canon Inc 

Konica Minolta Inc 

NTT DOCOMO Inc 

Sony Corp 









Asia-Pacific 31,405 246 39 29 

Asia-Pacific 9,167 149 44 NA 

Asia-Pacific 40,074 219 42 22 

Asia-Pacific 75,111 310 16 64 

Honda Motor Co Ltd Transportation Asia-Pacific 121,848 1,878 43 453 

Mazda Motor Corp Transportation Asia-Pacific 27,736 1,258 27 NA 

Nissan Motor Co Ltd Transportation Asia-Pacific 103,994 1,413 32 423 

United Parcel Service Inc Transportation North America 58,363 489 223 262 

TABLE 10: ET CARBON DISCLOSURE LEADERS 2016 



38 


ET SECTOR CARBON LEADERS 2016 

TABLE 11: 

ET SECTOR CARBON 

LEADERS 2016 

ET Sector Carbon Leaders are the three most 

carbon-efficient companies in each sector 

(based on the intensity of their combined 

Scope 1, 2 and 3 emissions) that disclose 

complete data for Scope 1 and 2. They are 

drawn from the ET Carbon Ranking Universe, 

which covers the world’s 2,000 largest listed 

companies. 


Scope 1, 2 & 

3 Intensity 

(tCO2e/$m 

Revenue) 


Carbon Rank 

Diageo PLC Consumption I 17,036 497 46 273 

Imperial Brands PLC Consumption I 19,628 558 14 291 

Uni-President Enterprises Corp Consumption I 13,109 534 11 NA 

Aeon Co Ltd Consumption II 57,458 124 20 NA 

J Sainsbury PLC Consumption II 38,534 129 36 NA 

METRO AG Consumption II 68,033 129 35 NA 

AXA SA Financials 123,745 292 1 35 

Hartford Financial Services Group Inc Financials 18,377 293 2 36 

T&D Holdings Inc Financials 21,653 292 3 NA 

Amgen Inc Health Care 21,662 74 17 5 

Biogen Inc Health Care 10,764 40 5 2 

UCB SA Health Care 4,302 73 15 4 

Barratt Developments PLC Infrastructure 5,923 582 5 NA 

Ferrovial SA Infrastructure 10,768 394 56 175 

Sekisui Chemical Co Ltd Infrastructure 10,173 445 83 NA 




39 

TABLE 11: ET SECTOR CARBON LEADERS 2016 (CONTINUED) 


Scope 1, 2 & 

3 Intensity 

(tCO2e/$m 

Revenue) 


Carbon Rank 

Cie de Saint-Gobain Non-Renewable Resources 43,982 1,005 296 416 

CRH PLC Non-Renewable Resources 26,235 1,541 831 444 

Sika AG Non-Renewable Resources 5,706 681 28 NA 

Vestas Wind Systems A/S 

Weyerhaeuser Co 

Renewable Resources and Alternative 

Energy 

Renewable Resources and Alternative 

Energy 

9,350 653 8 377 

7,082 1,020 376 417 

Mitsubishi Electric Corp Resource Transformation 39,522 1,227 31 420 

Omron Corp Resource Transformation 7,746 1,123 36 NA 

Sumitomo Chemical Co Ltd Resource Transformation 21,728 1,166 153 NA 

Liberty Global PLC Services 18,280 5,995 27 602 

Sky PLC Services 15,738 5,972 4 601 

Twenty-First Century Fox Inc Services 28,987 5,998 6 610 

Adobe Systems Inc Technology and Communications 4,796 41 9 3 

Oracle Corp Technology and Communications 38,226 34 10 1 

Proximus SADP Technology and Communications 6,673 92 19 NA 

Daimler AG Transportation 165,910 541 20 285 

MTR Corp Ltd Transportation 5,379 471 244 252 



40 


ET INDUSTRY CARBON LEADERS 2016 

TABLE 12: 

ET INDUSTRY CARBON 

LEADERS 2016 

ET Industry Carbon Leaders are the most 

carbon-efficient companies in each industry 

(based on the intensity of their combined 

Scope 1, 2 and 3 emissions) that disclose 

complete data for Scope 1 and 2. They are 

drawn from the ET Carbon Ranking Universe, 

which covers the world’s 2,000 largest listed 

companies. 

Company name SICS industry Region 

Revenues 

$m 

Scope 1, 2 & 

3 Intensity 

(tCO2e/$m 

Revenue) 

Scope 1 & 

2 Intensity 

(tCO2e/$m 

Revenue) 

ET Global 

800 Carbon 

Rank 

WPP PLC Advertising and Marketing Europe 18,700 6,003 7 612 

Boeing Co/The Aerospace and Defense North America 96,114 2,242 14 477 

Archer-Daniels-Midland Co Agricultural Products North America 67,702 788 265 388 

United Parcel Service Inc Air Freight and Logistics North America 58,363 489 223 262 

Japan Airlines Co Ltd Airlines Asia-Pacific 12,294 1,248 683 NA 

Diageo PLC Alcoholic Beverages Europe 17,036 497 46 273 

Christian Dior SE 

Apparel, Accessories and 

Footwear 

Europe 42,195 333 7 100 

Stanley Black & Decker Inc Appliance Manufacturing North America 11,172 5,352 31 597 

Bank of New York Mellon Corp/The 

Asset Management and Custody 

Activities 

North America 15,494 340 1 107 

Toyota Industries Corp Auto Parts Asia-Pacific 19,808 901 1 407 

Daimler AG Automobiles Europe 165,910 541 20 285 

Biogen Inc Biotechnology North America 10,764 40 5 2 

LIXIL Group Corp Building Products and Furnishings Asia-Pacific 15,591 573 49 NA 

Sky PLC Cable and Satellite Europe 15,738 5,972 4 601 

Kangwon Land Inc Casinos and Gaming Asia-Pacific 1,444 6,537 49 NA 

Sumitomo Chemical Co Ltd Chemicals Asia-Pacific 21,728 1,166 153 NA 

Intesa Sanpaolo SpA Commercial Banks Europe 26,928 294 3 50 

Sika AG Construction Materials Europe 5,706 681 28 NA 

Cielo SA Consumer Finance BRICS 3,389 317 1 67 




41 

TABLE 12: ET INDUSTRY CARBON LEADERS 2016 (CONTINUED) 

3M Co Containers and Packaging North America 30,274 42,899 186 781 

Carnival PLC Cruise Lines North America 15,714 7,148 660 655 

Galenica AG 

Drug Retailers and Convenience 

Stores 

Europe 4,101 2,976 2 NA 

E.ON SE Electric Utilities Europe 129,003 1,869 649 452 

Mitsubishi Electric Corp 

Ferrovial SA 


Equipment 


Services 

Asia-Pacific 39,522 1,227 31 420 

Europe 10,768 394 56 175 

METRO AG Food Retailers and Distributors Europe 68,033 129 35 NA 

Weyerhaeuser Co Forestry and Logging North America 7,082 1,020 376 417 

Hong Kong & China Gas Co Ltd Gas Utilities BRICS 3,817 4,755 94 590 

Ricoh Co Ltd Hardware Asia-Pacific 20,405 154 25 NA 

McKesson Corp Health Care Distributors North America 179,045 585 1 306 

Sekisui Chemical Co Ltd Home Builders Asia-Pacific 10,173 445 83 NA 

Hilton Worldwide Holdings Inc Hotels and Lodging North America 11,272 6,723 236 646 

L'Oreal SA Household and Personal Products Europe 28,036 2,726 4 514 

Omron Corp Industrial Machinery and Goods Asia-Pacific 7,746 1,122 36 NA 

T&D Holdings Inc Insurance Asia-Pacific 21,653 292 3 NA 

Itau Unibanco Holding SA Integrated Banks BRICS 50,428 350 2 135 

WEC Energy Group Inc Integrated Utilities North America 5,926 13,436 5,231 716 

Auto Trader Group PLC Internet Media and Services Europe 413 2,157 2 NA 

Deutsche Bank AG Investment Banking and Brokerage Europe 52,274 332 4 98 

Mitsui & Co Ltd Iron and Steel Producers Asia-Pacific 49,413 60,386 15 791 

Merlin Entertainments PLC Leisure Facilities Europe 1,955 6,559 72 NA 

Humana Inc Managed Care North America 54,289 583 2 304 

Babcock International Group PLC Marine Transportation Europe 6,446 4,983 27 NA 

Danone SA Meat, Poultry and Dairy Europe 24,878 583 60 305 



42 


TABLE 12: ET INDUSTRY CARBON LEADERS 2016 (CONTINUED) 

Twenty-First Century Fox Inc Media Production and Distribution North America 28,987 5,998 6 610 

Coloplast A/S Medical Equipment and Supplies Europe 2,144 222 20 23 

Vale SA Metals and Mining BRICS 26,055 11,589 622 700 

Aeon Co Ltd 

Multiline and Specialty Retailers 

and Distributors 

Asia-Pacific 57,458 124 20 NA 

Coca-Cola European Partners PLC Non-Alcoholic Beverages Europe 7,011 881 18 NA 

Royal Dutch Shell PLC 


Production 

Europe 264,960 2,594 306 511 

Snam SpA Oil and Gas – Midstream Europe 4,280 8,093 451 664 

DCC PLC 

Oil and Gas – Refining and 

Marketing 

Europe 17,106 7,710 8 NA 

Baker Hughes Inc Oil and Gas – Services North America 15,742 7,941 35 660 

Astellas Pharma Inc Pharmaceuticals Asia-Pacific 11,403 75 22 6 

Uni-President Enterprises Corp Processed Foods Asia-Pacific 13,109 534 11 NA 

Dai Nippon Printing Co Ltd Professional Services Asia-Pacific 13,367 6,265 69 NA 

MTR Corp Ltd Rail Transportation BRICS 5,379 471 244 252 

Klepierre 



Europe 1,453 9,631 88 NA 

Daito Trust Construction Co Ltd Real Estate Services Asia-Pacific 12,371 14,765 4 NA 

Starbucks Corp Restaurants North America 19,163 6,557 70 628 

Hong Kong Exchanges & Clearing 

Ltd 

Security and Commodity 

Exchanges 

BRICS 1,578 328 13 97 

QUALCOMM Inc Semiconductors North America 25,281 2,016 9 457 

Oracle Corp Software and IT Services North America 38,226 34 10 1 

Proximus SADP Telecommunications Europe 6,673 92 19 NA 

Imperial Brands PLC Tobacco Europe 19,628 558 14 291 

Republic Services Inc Waste Management North America 9,115 1,881 1,672 454 

United Utilities Group PLC Water Utilities Europe 2,774 5,538 151 NA 

Vestas Wind Systems A/S Wind Energy Europe 9,350 653 8 377 



43 

ET CARBON RANKING METHODOLOGY: 

ET CARBON RANKING UNIVERSE 

The ET Carbon Ranking Universe covers the largest 2,000 listed companies by market 

capitalisation in each jurisdiction. The ET Carbon Rankings are comprised of the following 

global, regional and national Rankings, with carbon data covering the reporting year ending in 

2015. 

THE ET CARBON RANKINGS: 

ET Global 800 Carbon Ranking 

ET North America 300 Carbon Ranking 

ET Asia-Pacific 300 Carbon Ranking 

ET Europe 300 Carbon Ranking 

ET BRICS 300 Carbon Ranking 

ET US 250 Carbon Ranking 

ET UK 100 Carbon Ranking 

ET Carbon Disclosure Leaders 

ET Sector Carbon Leaders 

ET Industry Carbon Leaders 

Please see the appendix for the full results. 



44 

ET CARBON RANKING METHODOLOGY 

METHODOLOGY 

Companies are analysed using a strict 

quality control framework in order to 

ascertain a greenhouse gas emissionsintensity 

metric (tCO2e/$m revenue). 

The analysis framework for gathering this 

information is based on the Greenhouse 

Gas Protocol, the most widely used 

international accounting tool for 

greenhouse gas (GHG) emissions. The 

GHG Protocol classifies GHG emissions 

according to three Scopes. See Figure 19. 

Data sources include annual reports, 

sustainability reports and company 

websites. The completeness of the data 

and whether the information has been 

audited by an independent third party is 

also recorded. For each company, a Scope 

1 and 2 intensity figure is calculated 

based on the total disclosed Scope 1 and 

2 emissions divided by USD million of 

revenue (Scope 1 and 2/$m revenue). The 

same applies to Scope 3. 

In cases where a company is not reporting 

complete information, an inference system 

is applied. The highest reported emissionsintensity 

figure from a disclosing company 

within the most appropriate peer group is 

applied to the non-disclosing company. This 

inference is carried out at the most granular 

industry level possible. For Scope 3, the 

inference system is applied to each category. 

This is not an estimate of the company’s 

emissions; rather it is a means of penalising 

non-disclosure in order to provide an 

incentive for disclosure. 

The ET Carbon Rankings integrate the 

Sustainable Industry Classification System 

(SICS®) from SASB®, the Sustainability 

Accounting Standards Board®. The SICS 

categorises 10 sectors and 80+ industries 

in accordance with their resource intensity, 

sustainability impact, and sustainability 

innovation potential. 




45 

KNOW YOUR ‘SCOPES’ 

Scope 1 Emissions – direct emissions 

from a company’s operational activities. 

Scope 2 Emissions – indirect emissions 

generated from the purchase of electricity. 

Scope 3 Emissions – all other emissions 

over which the company has influence 

but not control, such as distribution 

of goods, transportation of purchased 

goods, transportation of waste, disposal 

of waste, employee commuting, business 

travel or investments. 

The Greenhouse Gas Protocol, developed 

by the World Resources Institute and the 

World Business Council on Sustainable 

Development, sets the global standard 

for how to measure, manage, and report 

greenhouse gas emissions. Figure 19 shows 

how greenhouse gases are broken down into 

three ‘Scopes’. 

FIGURE 19: 

GREENHOUSE GAS 

PROTOCOL SCOPE 1, 2 

AND 3 EMISSIONS. 

CO2 

CH4 

HFCs PFCs SF6 

N2O 

NF3 

SCOPE 2 

INDIRECT 

PURCHASED 

ELECTRICITY, STEAM, 

HEATING & COOLING 

FOR OWN USE 

1. PURCHASED 

GOODS AND 

SERVICES 

5. WASTE 

GENERATED IN 

OPERATIONS 

SCOPE 3 

INDIRECT 

2. CAPITAL 

GOODS 

6. BUSINESS 

TRAVEL 

4. UPSTREAM 

TRANSPORTATION 

AND DISTRIBUTION 

3. FUEL AND 

ENERGY RELATED 

ACTIVITIES 

7. EMPLOYEE 

COMMUTING 

8. UPSTREAM 

LEASED ASSETS 

SCOPE 1 

DIRECT 

COMPANY 

FACILITIES 

COMPANY 

VEHICLES 

9. DOWNSTREAM 

TRANSPORTATION 

AND DISTRIBUTION 

10. DOWNSTREAM 

LEASED ASSETS 

SCOPE 3 

INDIRECT 

10. PROCESSING 

OF SOLD 

PRODUCTS 

14. FRANCHISES 

12. END-OF-LIFE 

TREATMENT OF 

SOLD PRODUCTS 

11.USE 

OF SOLD 

PRODUCTS 

15. INVESTMENTS 

UPSTREAM ACTIVITIES 

REPORTING 

COMPANY 

DOWNSTREAM ACTIVITIES 

SOURCES: ET INDEX RESEARCH, GREENHOUSE GAS PROTOCOL 



46 


Disclosure categories 

1. Public, complete Scope 1 and 2 data, third-party assurance 

2. Public, complete Scope 1 and 2 data, no third-party assurance 

3. Incomplete Scope 1 and 2 data, no third-party assurance 

4. No public data 

Definitions 

• Complete data is defined as data 

covering at least 95% of a company’s 

worldwide Scope 1 and 2 emissions 

within an appropriately chosen 

reporting boundary. Where there is 

only partial data available, the ET 

Carbon Ranking methodology accepts 

a company reporting extrapolated 

data to achieve 100% coverage for 

their operations, as this is permissible 

under the GHG Protocol Corporate 

Standard, providing the end result is 

a faithful reflection of a company’s 

emissions. 

• Incomplete data is defined as data 

which represents less than 95% of 

a company’s worldwide operations; 

data that is expressed as an intensity 

metric, such as the amount of CO2 

emitted per product produced, rather 

than as an absolute figure; or data 

which is not reported clearly under 

the GHG Protocol definition of Scopes 

1, 2 and 3. 

• Assured data is defined as having a 

bona fide independent assurance 

statement without significant 

qualification. 

• Public data is defined as freely available 

information reported in a company’s 

sustainability report, annual report, 

or sustainability-related section of its 

website (or any other relevant section 

of the company’s website). 

• Third-party reporting on behalf 

of a company, which may involve 

restrictions or permissions (e.g. 

reporting to the CDP), is not defined as 

publicly and freely available. 

Greenhouse Gas Emissions are expressed in terms of carbon dioxide equivalent 

(CO2e). To compare companies of different sizes within one ranking, a 

company’s total greenhouse gas emissions figure is divided by its revenue to 

provide an intensity metric for each company (CO2e/$ revenue). In other words, 

companies are ranked according to the carbon efficiency of their operations. 




47 

SPOTLIGHT ON SCOPE 3 

Scope 3 emissions can represent the majority of 

a company’s emissions. This is confirmed within 

the ET Carbon Rankings data set and is echoed 

by other groups, including the GHG Protocol. 41 

It is often among the most challenging areas of 

carbon accounting. Suppliers in the value chain 

may, for example, have data confidentiality 

concerns, and the complexity of a corporation’s 

value chain means it can be difficult and 

expensive to find accurate primary data. 42 

Yet, understanding Scope 3 emissions 

enables a corporation to pursue the most 

cost-effective carbon mitigation strategies. 43 

Accounting for and disclosing Scope 3 

enables companies to understand their 

activities better. 44 It also enables companies to 

benchmark themselves against their peers. 

Whilst the number of companies reporting 

some or all elements of Scope 3 is now 

increasing, it lags behind those reporting 

Scope 1 and 2, and few corporations calculate 

and disclose all 15 Scope 3 categories. 

However, this is likely to improve rapidly 

with the proliferation of the Science Based 

Targets initiative, which makes carrying out a 

complete assessment of each of the 15 Scope 

3 categories a mandatory requirement. 

performing an assessment of all categories 

it is difficult to identify which categories are 

material for any given sector. 

As Carbon Clear highlighted in their 

September 2016 report ‘Sustainability 

Reporting Performance of the FTSE 100’, the 

highest number of companies to date (66) 

are now reporting some Scope 3 emissions 

(with over 70% of these reporting beyond 

business travel alone) and yet: “Only a quarter 

of companies in the FTSE 100 are performing 

materiality assessments of their Scope 3 

emissions, suggesting that in many cases the 

reported Scope 3 categories may be the ones 

that are the most readily available, rather 

those which are most significant within the 

businesses.” 45 

Calculating Scope 3 emissions in a cost-effective manner 

The Scope 3 Evaluator is a free, web-based tool from 

Greenhouse Gas Protocol and Quantis that makes it easy 

for companies to measure, report, and reduce emissions 

throughout their value chain. www.ghgprotocol.org 

The notion of materiality is central to Scope 3 

accounting. Guidance from the GHG Protocol 

states that companies may exclude categories 

if their calculation is not feasible, relevant, or 

material. Currently, most corporations that 

report Scope 3 only report a few categories 

as evidenced by the Scope 3 data highlighted 

in this report. The objective of the full 

assessment for the purposes of Science 

Based Targets and for the purposes of the ET 

Carbon Rankings is to enable a data-driven 

assessment of which Scope 3 categories are 

material to a particular business. Without 



48 


TREATMENT OF SCOPE 3 IN THE ET 

CARBON RANKING METHODOLOGY 

Since Scope 3 is material from a carbon 

risk exposure point of view, and typically 

represents the greatest component of a 

company’s carbon footprint, the objectives of 

the ET Carbon Rankings in this regard are: 

1. To include Scope 3 emissions in the 

assessment of a company’s total GHG 

emissions; rather than ignore them 

altogether. 

2. To encourage complete Scope 3 disclosure 

across all 15 GHG Protocol categories with 

a view to having a data driven assessment 

of which Scope 3 categories are material 

for any given sector. 

OVERCOMING THE LACK OF DATA 

In the case where a company is reporting 

a carbon emissions figure for a Scope 3 

category, e.g. business travel, this number 

is accepted. In the case where a company is 

reporting each of the 15 Scope 3 emissions 

disclosure categories, each of these 

emissions figure totals are accepted. 

In the case where a company is not reporting a 

carbon emissions number for any given Scope 

3 emissions category, the ET Index Research 

inference system is applied. The highest 

reported Scope 3 emissions-intensity figure 

for that Scope 3 category, within the most 

granular industry level possible, is applied to 

the non-disclosing company. 

This is the same logic that is applied across 

the universe for Scope 1 and 2 emissions and 

is designed to make use of as much reported 

Scope 3 data as possible. It also enables 

Scope 3 data to be included in the overall 

calculation of a company’s carbon footprint, 

even though the data disclosed is not yet 

perfect across the board. 

there was no meaningful data disclosed for 

Scope 3 category 15: Investments. Several 

companies completed a partial inventory for 

this category but acknowledged that it was 

far from complete. 

Where no data is available for a given 

Scope 3 category at the sector level, the 

highest reported emissions intensity for that 

category, from any company in the Rankings 

Universe, is used. This is irrespective of the 

sector. 

In the case of Financials, a Scope 3 Investment 

category emissions-intensity of 285.8 

tCO2e/$m Revenue was applied, which was 

the highest reported Investment category 

emissions-intensity in the ET Carbon Ranking 

Universe (disclosed by a company in the 

Resource Transformation sector). By way 

of comparison, the average Scope 1 and 2 

emissions intensity across the entire universe, 

which is a realistic representation of the global 

economy in which financial firms invest, was 

173.9 tCO2e/$m Revenue. 

The only Scope 3 category where no data was 

available was in the Financials sector where 




49 

DISCLOSURE REQUIREMENTS, CURRENT 

EMISSIONS AND INTENSITY 

From a technical point of view, the ultimate 

metric for investors to consider when 

incorporating carbon risk into their valuations 

of companies would be the net present value 

of emissions over time. That is, the expected 

discounted value of the change in cash flows, 

relative to business as usual, of a company 

due to its GHG emissions exposure. 

The current emissions-intensity of a company 

is a key input into the equation for this 

net present value of emissions, just as an 

estimate of a company’s current dividend 

amount is a core parameter in the dividend 

discount model of stock prices. 46 While 

analysts may debate the right dividend 

growth rate number or the right emissions 

cost growth rate, the current dividend 

amount and the current emissions-intensity 

of a company are observable. These 

observable quantities set the starting point 

for forecasts of future dividends and future 

emissions amounts, respectively. 

ET Index Research asserts that the process 

of calculating and publishing Scope 1, 2 and 

3 emissions-intensities is consistent with 

the seven fundamental principles identified 

by the FSB Task Force on Climate-related 

Financial Disclosures to: 47 

• present relevant information; 

• be specific and complete; 

• be clear, balanced, and understandable; 

• be consistent over time; 

• be comparable among companies within a 

sector, industry, or portfolio; 

• be reliable, verifiable, and objective; and 

• be provided on a timely basis. 

The ET Carbon Rankings seek to enhance 

the disclosure of accurate Scope 1, 2 and 3 

emissions data to an ever-higher standard 

each year across all public companies. 

To assess the current emissions-intensity 

of a company, information on the current 

emissions of that company is required. This 

must include all relevant Scope 1, 2 and 3 

emissions, so that both direct and indirect 

costs can be estimated. 



50 

APPENDIX: REGIONAL RESULTS 

TABLE 13: 

ET ASIA-PACIFIC 300 

CARBON LEADERS 

ET Asia- 

Pacific 

300 

Carbon 

Rank 

Company name 

Scope 1, 2 & 

3 Intensity 

(tCO2e/$m 

Revenue) 

Scope 1 & 

2 Intensity 

(tCO2e/$m 

Revenue) 

SICS sector 

1 Astellas Pharma Inc 75 22 Health Care 

2 CSL Ltd 99 43 Health Care 

3 Nomura Research Institute Ltd 107 26 Technology and Communications 

4 Aeon Co Ltd 124 20 Consumption II 

5 Mitsubishi Corp 141 48 Consumption II 

6 Woolworths Ltd 151 61 Consumption II 

7 Ricoh Co Ltd 154 25 Technology and Communications 

8 Wesfarmers Ltd 154 77 Consumption II 

9 Seven & i Holdings Co Ltd 172 78 Consumption II 

10 Olympus Corp 207 149 Health Care 

TABLE 14: 



ET 

BRICS 

300 

Carbon 

Rank 

Company name 

Scope 1, 2 & 

3 Intensity 

(tCO2e/$m 

Revenue) 

Scope 1 & 

2 Intensity 

(tCO2e/$m 

Revenue) 

SICS sector 

1 Dairy Farm International Holdings Ltd 229 135 Consumption II 

2 Magnit PJSC 229 135 Consumption II 

3 Jardine Strategic Holdings Ltd 229 135 Consumption II 

4 China Grand Automotive Services Co 294 118 Consumption II 

5 Suning Commerce Group Co Ltd 294 118 Consumption II 

6 Jardine Matheson Holdings Ltd 294 118 Consumption II 

7 Sanlam Ltd 306 6 Financials 

8 Cielo SA 317 1 Financials 

9 Housing Development Finance Corp Ltd 324 5 Financials 

10 China Taiping Insurance Holdings Co 328 28 Financials 



APPENDIX 

51 

ET 

Europe 

300 

Carbon 

Rank 

Company name 

Scope 1, 2 & 

3 Intensity 

(tCO2e/$m 

Revenue) 

Scope 1 & 

2 Intensity 

(tCO2e/$m 

Revenue) 

SICS sector 

TABLE 15: 

ET EUROPE 300 


1 UCB SA 73 15 Health Care 

2 Proximus SADP 92 19 Technology and Communications 

3 Telefonica SA 110 32 Technology and Communications 

4 METRO AG 129 35 Consumption II 

5 Carrefour SA 131 37 Consumption II 

6 Kingfisher PLC 132 25 Consumption II 

7 Koninklijke KPN NV 133 5 Technology and Communications 

8 Jeronimo Martins SGPS SA 133 72 Consumption II 

9 Tesco PLC 142 48 Consumption II 

10 Deutsche Telekom AG 176 57 Technology and Communications 


America 

300 

Carbon 

Rank 

Company name 

Scope 1, 2 & 

3 Intensity 

(tCO2e/$m 

Revenue) 

Scope 1 & 

2 Intensity 

(tCO2e/$m 

Revenue) 

SICS sector 

TABLE 16: 

ET NORTH AMERICA 300 


1 Oracle Corp 34 10 Technology and Communications 

2 Biogen Inc 40 5 Health Care 

3 Adobe Systems Inc 41 9 Technology and Communications 

4 Amgen Inc 74 17 Health Care 

5 Kroger Co/The 153 59 Consumption II 

6 Wal-Mart de Mexico SAB de CV 186 41 Consumption II 

7 Home Depot Inc/The 208 32 Consumption II 

8 Wal-Mart Stores Inc 219 43 Consumption II 

9 Loblaw Cos Ltd 224 135 Consumption II 

10 Sysco Corp 229 135 Consumption II 



52 

APPENDIX 

TABLE 17: 

ET US 250 CARBON 

LEADERS 

ET US 

250 

Carbon 

Rank 

Company name 

Scope 1, 2 & 

3 Intensity 

(tCO2e/$m 

Revenue) 

Scope 1 & 

2 Intensity 

(tCO2e/$m 

Revenue) 

SICS sector 

1 Oracle Corp 34 10 Technology and Communications 

2 Biogen Inc 40 5 Health Care 

3 Adobe Systems Inc 41 9 Technology and Communications 

4 Amgen Inc 74 17 Health Care 

5 Kroger Co/The 153 59 Consumption II 

6 Home Depot Inc/The 208 32 Consumption II 

7 Wal-Mart Stores Inc 219 43 Consumption II 

8 Sysco Corp 229 135 Consumption II 

9 Target Corp 229 53 Consumption II 

10 Lowe's Cos Inc 294 118 Consumption II 

TABLE 18: 

ET UK 100 CARBON 

LEADERS 

ET UK 

100 

Carbon 

Rank 

Company name 

Scope 1, 2 & 

3 Intensity 

(tCO2e/$m 

Revenue) 

Scope 1 & 

2 Intensity 

(tCO2e/$m 

Revenue) 

SICS sector 

1 J Sainsbury PLC 129 36 Consumption II 

2 Kingfisher PLC 132 25 Consumption II 

3 Tesco PLC 142 48 Consumption II 

4 Marks & Spencer Group PLC 188 12 Consumption II 

5 Bunzl PLC 189 13 Consumption II 

6 Prudential PLC 294 2 Financials 

7 Legal & General Group PLC 294 1 Financials 

8 St James's Place PLC 295 1 Financials 

9 Aviva PLC 296 2 Financials 

10 Direct Line Insurance Group PLC 305 4 Financials 



APPENDIX 

53 

INFORMATION FOR REPORTING COMPANIES 

In order to enhance a company’s position in 

the Carbon Ranking, ET Index recommends 

the following: 

• Companies publish emissions data for 

Scope 1, 2 and 3 in a clear and accessible 

manner, either on the company website, 

in the sustainability report, integrated 

report, annual report or across all of the 

sources mentioned. 

• Companies should ensure this information 

has been externally verified to a 

reasonable standard of assurance, ideally 

against a specific GHG standard such as 

ISO 14064-3, but at least against a general 

assurance standard such as ISAE 3000. 

• Companies should calculate and publish 

comprehensive Scope 3 emissions data 

according to the GHG protocol Corporate 

Value Chain (Scope 3) Accounting and 

Reporting Standard. This includes 

explaining and justifying any Scope 3 

categories which have not been included. 

The latest information on verification of 

Scope 3 can be found at the GHG Protocol 

and ISO websites. 

• Make sure that any verification statement 

is publicly available and is included in the 

company sustainability report, integrated 

report or annual report or can be found 

easily on the company’s website. 

ET Index Research offers a service for companies wishing to improve their 

public reporting and to showcase the actions they are taking on climate 

change to their stakeholders, including benchmarking against competitors. 

Please email info@etindex.com for further information about this service. 



54 

APPENDIX 

SUSTAINABLE INDUSTRY CLASSIFICATION 

SYSTEM (SICS) TAXONOMY 

Level 1 

Thematic Sectors 

Non-Renewable Resources 

Renewable Resources & Alternative 

Energy 

Resource Transformation 

Consumption 

Technology and Communications 

Level 2 

Sub-Sectors 

Oil & Gas 

Coal 

Metals & Mining 



Forestry & Paper 

Chemicals 

Industrials 

Food 

Beverages 

Tobacco 

Retailers 

Apparel & Textiles 

Consumer Discretionary Products 

Technology 

Semiconductors 

Telecommunications 

Internet Media & Services 

Level 3 

Industries 

Oil & Gas – Exploration & Production 

Oil & Gas – Midstream 

Oil & Gas – Refining & Marketing 

Oil & Gas – Services 

Coal Operations 

Iron & Steel Producers 

Metals & Mining 


Biofuels 

Solar Energy 

Wind Energy 

Fuel Cells & Industrial Batteries 

Forestry & Logging 

Pulp & Paper Products 

Chemicals 

Aerospace & Defense 

Electrical & Electronic Equipment 

Industrial Machinery & Goods 

Containers & Packaging 

Agricultural Products 

Meat, Poultry, & Dairy 

Processed Foods 

Non-Alcoholic Beverages 

Alcoholic Beverages 

Tobacco 

Food Retailers & Distributors 

Drug Retailers & Convenience Stores 

Multiline and Specialty Retailers & 

Distributors 

E-commerce 

Apparel, Accessories & Footwear 

Appliance Manufacturing 

Household & Personal Products 

Building Products & Furnishings 

Toys & Sporting Goods 

Electronic Manufacturing Services & 

Original Design Manufacturing 

Software & IT Services 

Hardware 

Semiconductors 

Telecommunications 

Internet Media & Services 



APPENDIX 

55 

Level 1 

Thematic Sectors 

Services 



Financials 

Health Care 

Level 2 

Sub-Sectors 

Consumer Services 

Hospitality & Recreation 

Media 

Utilities 



Real Estate 

Automobiles 

Air Transportation 

Marine Transportation 

Land Transportation 

Banking & Investment Banking 

Specialty Finance 

Insurance 

Biotechnology & Pharmaceuticals 

Medical Technology 

Health Care Providers 

Level 3 

Industries 

Education 

Professional Services 

Hotels & Lodging 

Casinos & Gaming 

Restaurants 

Leisure Facilities 

Cruise Lines 

Advertising & Marketing 

Media Production & Distribution 

Cable & Satellite 


Gas Utilities 

Water Utilities 


Engineering & Construction Services 

Home Builders 



Real Estate Services 

Automobiles 

Auto Parts 

Car Rental & Leasing 

Airlines 

Air Freight & Logistics 

Marine Transportation 

Rail Transportation 

Road Transportation 

Commercial Banks 

Investment Banking & Brokerage 

Asset Management & Custody Activities 

Consumer Finance 

Mortgage Finance 

Security & Commodity Exchanges 

Insurance 

Biotechnology 

Pharmaceuticals 

Medical Equipment & Supplies 

Health Care Delivery 

Health Care Distributors 

Managed Care 



56 

APPENDIX 

THE ET CARBON RANKING QUALITY 

ASSURANCE PANEL 

The Quality Assurance Panel consists of 

professionals from different disciplines and 

backgrounds who review the ET Carbon 

Ranking methodology, assisting the process 

of integrating new rules as and when they 

become feasible and appropriate. 

The Panel meets at least once a year to 

discuss, review and vote on any changes 

made to the methodology. The Panel 

also has a responsibility to deal with 

submissions under the ET Carbon Ranking 

Appeal Procedure. 

ET Index Research distinguishes between 

issues of methodology and issues of data 

accuracy. In the case of a methodology 

submission, such as comments on disclosure 

categories or the inference methodology 

employed, these will be presented to the 

Panel for review and determination. 

In the case of a Data Appeal where a 

company feels its publicly reported 

information has been inaccurately 

represented in the Carbon Rankings (e.g. 

a decimal place is in the wrong place) the 

Chairman of the Panel will act as the arbiter 

in any case where ET Index Research and 

the company in question cannot resolve the 

issue under the existing Appeal Procedure. 

Michael Mainelli, Panel Chair 

Alderman Professor Michael Mainelli is 

Emeritus Mercers’ School Memorial Professor 

of Commerce at Gresham College, having held 

the chair from 2005 to 2009. His first degree 

was in Government from Harvard, followed by 

mathematics and engineering studies at Trinity 

College Dublin and a PhD from the London 

School of Economics in chaotic systems, 

where he was also a Visiting Professor. 

Professor Mainelli is Executive Chairman 

of Z/Yen, the City of London’s leading 

commercial think-tank and venture firm, 

which he co-founded in 1994 to promote 

societal advance through better finance 

and technology. A qualified accountant 

(FCCA), securities professional (FCSI), 

computer specialist (FBCS) and management 

consultant (FIC), Michael began his career 

as a research scientist in aerospace (rockets) 

and computing (architecture & mapping). 

He later became a senior partner with 

accountants BDO Binder Hamlyn directing 

global consulting projects. During the 1990s 

he worked for the UK Ministry of Defence 

as Corporate Development Director for 

Europe’s then largest R&D firm, the Defence 

Evaluation & Research Agency leading to 

two privatisations. Career highlights include 

directing Z/Yen’s Long Finance initiative with 

Gresham College and the City of London 

Corporation asking “when would we know 

our financial system is working?” as well as 

creating the Global Financial Centres Index, 

Global Intellectual Property Index, London 

Accord and Farsight Award. Michael also 

conceived and produced the first complete 

digital map of the world in 1983, Mundocart 

(a 1980’s Google Earth), and the $20 million 

Geodat consortium cartography project. 



APPENDIX 

57 

Michael is non-executive Director of the 

United Kingdom Accreditation Service (UK’s 

national body for standards and laboratories) 

and AIM-listed Wishbone Gold Plc. 

Adam Rose, Panel Secretary 

An LSE (London School of Economics and 

Political Science) economic geography 

graduate, with postgraduate qualifications 

in management, marketing and corporate 

governance. Adam is an experienced provider 

of research services for government, corporate 

bodies and the investment sectors and 

has specialized in Risk Management and 

Socially Responsible Investment research 

techniques for over 10 years. He has built up 

several research teams, has been a freelance 

consultant and research advisor for the SERM 

Rating Agency, and is now currently corporate 

governance executive and ratings officer at 

Pensions Investment Research Consultants 

Ltd (PIRC). He is co-author of The Handbook 

of Business Risk Management: A sustainable 

approach (CIMA/Elsevier), and is contributor 

to The Due Diligence Handbook (CIMA/ 

Elsevier). He is currently writing on the subject 

of corporate governance risk and developing 

training material for a Sustainable Enterprise 

Risk Management framework. Adam is also an 

Affiliate Member of the Institute of Chartered 

Secretaries and Administrators. 

Cary Krosinsky, panel member 

Cary Krosinsky is Executive Officer of the 

Network for Sustainable Financial Markets. 

He is lead editor of Evolutions in Sustainable 

Investing, (along with NSFM participants 

Nick Robins & Stephen Viederman), a recent 

book (Wiley, 2012) on the positive strands 

of SRI, including 15 case studies, regional 

perspectives and thought leadership from 

Dan Esty, Paul Hawken, Rory Sullivan, Roger 

Urwin and a host of others. Cary is also 

co-editor of a previous book on this subject 

– Sustainable Investing: the Art of Long 

Term Performance, also with Nick Robins 

(Earthscan, 2008). 

Until October 2012, Cary was Senior Vice 

President & member of the Management 

team for Trucost. He also teaches 

sustainability & investing at Columbia 

University’s Earth Institute, and an MBA 

course on the same subject at the University 

of Maryland’s Robert H. Smith School of 

Business, and is a frequent speaker on the 

intersection of sustainability & ownership. 

He was a member of the Expert Group that 

helped create the United Nations Principles 

for Responsible Investment. 

Cynthia Cummis, panel member 

Cynthia Cummis is the Deputy Director of 

GHG Protocol within WRI’s Climate and 

Energy Program. In this role she manages 

GHG Protocol’s corporate work which 

includes activities related to the Corporate, 

Scope 3 and Product Life Cycle Standards. 

Cynthia is a well-known expert in GHG 

accounting and brings more than 15 years 

of experience working on the issue of global 

climate change. Prior to WRI, Cynthia was 

the Director of Carbon Management at Clear 

Carbon Consulting where she managed 

carbon quantification and management 

projects for multiple Fortune 500 clients 

as well as large public institutions. Ms. 

Cummis was the Founding Director of U.S. 

EPA’s Climate Leaders Program, a voluntary 

program that partnered with businesses 

to develop corporate-wide greenhouse 

gas inventories and reduction goals. For 

more than 5 years, she led the design and 

implementation of the program and oversaw 

the growth of the program to more than 90 

corporate Partners. 

Cynthia holds a MPA in environmental policy 

from Columbia University in New York City and 

a B.S. from Cornell University in Ithaca N.Y. 



58 

APPENDIX 

Stanislas Dupré, panel member 

Stanislas Dupré initiated the 2° Investing 

Initiative and now serves as Director. 

Previously Stanislas Dupré was Executive 

Director of Utopies (a CSR consultancy) after 

a career as CSR consultant and R&D manager. 

Stanislas has been working on 2° investing 

topics since 2007 when he developed the 

first assessment methodology for ’financed 

emissions’ of banks and diversified portfolios 

(for Caisse d’Epargne/Natixis, the ADEME, 

WWF and Friends of the Earth). In 2010, he 

wrote a book about the role of financial 

institutions in financing the energy transition. 

Stanislas is also Non-Executive Director of a 

green private equity fund (NEF-CEM), lecturer 

at Paris-Dauphine University and member on 

the expert committees of the NYSE-Euronext 

Low-Carbon Index and Novethic. He holds 

stakes in several specialized consultancy firms. 

Julie Raynaud, panel member 

Julie Raynaud is a senior sustainability 

analyst in Kepler cheuvreux’s ESG team, 

specialising in environmental research. Prior 

to this, she was a research analyst for Trucost 

helping organisations measure and manage 

the environmental impacts associated with 

their own operations, supply chains and 

investment portfolios. 

Julie is an expert in greenhouse gas emissions 

accounting, assurance and Life Cycle 

Assessments. She has worked with Puma to 

produce an environmental profit and loss 

account, quantifying and valuing in financial 

terms the cradle-to-gate environmental 

damages of 19 products and the cradle-to-grave 

environmental damages of 6 products. She 

has regularly performed limited assurances 

(AA1000) of GHG emissions for reporting to the 

Carbon Disclosure Project, and has screened 

Life Cycle Assessments in partnership with NSF 

and the Carbon Fund for GHG compensation 

and offsetting. Julie was responsible for 

the data analysis, quality control and 

communication with 65+ largest companies by 

market capitalization within the consumer good 

sectors for the Newsweek Green Ranking which 

had 1.5 million hits on its webpage. 

Matthew Brander, panel member 

Matthew is a Senior Research Fellow at the 

Centre for Business and Climate Change 

at the University of Edinburgh’s Business 

School. He has moved to academia from a 

career in consultancy, with over seven years’ 

experience in greenhouse gas accounting and 

climate change policy appraisal. 

He has worked on projects for the UK’s 

Department for Energy and Climate Change 

(DECC), the Department for Transport, the 

Scottish Government, and the Government 

of Norway, as well as for numerous corporate 

clients. He is on the peer-review panel for Defra’s 

conversion factors for company reporting. 

Matthew is a member of two GHG Protocol 

technical working groups, one for the 

forthcoming Policy and Actions Standard, and 

the second on green power accounting. 

He has a MSc in Environmental Sustainability 

from the University of Edinburgh, an MSc 

by research in philosophy, and an MA in 

philosophy. He is currently undertaking 

his doctoral research on the application 

of consequential methods to corporate 

greenhouse gas accounting. 

Julian Poulter, panel member 

Julian Poulter is the Founder and Executive 

Director of the Asset Owners Disclosure 

Project. He is also Business Director of research 

and advocacy group The Climate Institute, 

based in Australia. Julian is an experienced 

business executive with his primary experience 

in strategy and change consulting combined 

with several CEO and director roles. He has 

managed companies and projects in many 

diverse industries including investment, 

finance, manufacturing, energy, oil and gas, 

distribution, retail, telecoms, IT, tourism, 

transportation, commercial property, and 

media. He is a stakeholder council member of 

the Global Reporting Initiative and Chair of the 

GRI Investor Working Group. 



APPENDIX 

59 

References 

1 

Carbon Tracker (2015) Coal: Caught in the EU Utility Death Spiral. 

Available at: http://www.carbontracker.org/report/eu_utilities/; 

Randall, T. (2015) The Latest Sign That Coal Is Getting Killed. 

Bloomberg July 13, 2015. Available at: http://www.bloomberg. 

com/news/articles/2015-07-13/the-latest-sign-that-coal-isgetting-killed; 

HSBC (2015) Stranded Assets, what next? Available 

at: http://www.businessgreen.com/digital_assets/8779/hsbc_ 

Stranded_assets_what_next.pdf. 

2 

The Law Commission (2014) ‘Fiduciary Duties of Investment 

Intermediaries:’ http://www.lawcom.gov.uk/wp-content/ 

uploads/2015/03/lc350_fiduciary_duties.pdf; Six Pump Court 

Chambers (2016) ‘Ignoring climate risk risks liability for pension 

fund trustees and fund managers:’ http://www.6pumpcourt. 

co.uk/2016/07/ignoring-climate-risk-risks-liability-for-pensionfund-trustees-and-fund-managers-3/; 

Center for International 

Environmental Law (2016) ‘Fiduciary Duty, Divestment and Fossil 

Fuels in an Era of Climate Risk:’ http://www.ciel.org/wp-content/ 

uploads/2016/09/Pensions-4Pagerv4.pdf 

3 

ET Index Research (2015) Special Report 01: The Emerging 

Importance of Carbon Emission-Intensities and Scope 3 (Supply 

Chain) Emissions in Equity Returns. Available at: http://etindex. 

com/images/assets/ET_Index_Special_Report_01_Emerging_ 

Importance_of_Carbon_and_Scope_3_in_Equity_Returns.pdf 

4 

https://www.fsb-tcfd.org/publications/# 

5 

The fines exceeding $15 billion that Volkswagen has agreed to 

pay for falsifying emissions related to use of their product are also 

an example of the importance of value chain. Note though that 

emissions Volkswagen falsely reported were not GHG emissions. 

Nevertheless, the scale of the response to their falsification 

of NOx emissions, indicates the potential future scale of the 

response to false GHG emissions information. 

6 

Special Report 04: The Carbon Risk Factor (EMI – ‘Efficient Minus 

Intensive’). Available at: http://etindex.com/images/assets/ 

ET_Index_Special_Report_04_The_Carbon_Risk_Factor.pdf 

7 

For a detailed list of disclosure rules by jurisdiction, see Phase I 

Report of the Task Force on Cimate-Related Financial Disclosures: 

https://www.fsb-tcfd.org/wp-content/uploads/2016/03/Phase_I_ 

Report_v15.pdf, at 42-43. 

8 

http://www.wri.org/blog/2015/12/cop21-qa-what-ghgemissions-neutrality-context-paris-agreement 

9 

Current levels of global carbon dioxide emissions are decreasing 

annual market returns by an estimated 0.1% per year. This is a 

very conservative estimate as it does not account for the effect of 

greenhouse gases other than carbon dioxide. This drag on returns 

is set to increase due to the increasingly nonlinear link between 

emissions and an increasing global temperature (Bansal et al, 

2016; Matthews et al, 2009; Myles et al, 2009; MacDougall et al, 

2016; Leduc et al, 2016; Quéré et al, 2015; PBL NEAA, 2015). 

10 

Dietz et al. (2016) ‘Climate value at risk’ of global financial 

assets:’ http://www.nature.com/nclimate/journal/vaop/ncurrent/ 

full/nclimate2972.html 

11 

Based on industry averages, the ET Carbon Rankings Universe 

is estimated to emit roughly 9.5 billion tonnes of CO2e. The 

European Commission estimates that total 2014 fossil fuel and 

industrial emissions for the United States, European Union and 

Canada to be 5.3, 3.4 and 0.6 billion tonnes CO2, respectively. 

Olivier JGJ, Janssens-Maenhout G, Muntean, M & Peters JAHW 

(2015) Trends in global CO2 emissions 2015 Report. The Hague: 

PBL Netherlands Environmental Assessment Agency; Brussels: 

Joint Research Centre. Available at: http://edgar.jrc.ec.europa. 

eu/news_docs/jrc-2015-trends-in-global-co2-emissions-2015- 

report-98184.pdf 

12 

ACCA (2011) The carbon we’re not counting. Available at: http:// 

www.accaglobal.com/content/dam/acca/global/PDF-technical/ 

climate-change/not_counting.pdf 

13 

CO2e is an abbreviation of ‘carbon dioxide equivalent’ and is 

the internationally recognised measure of greenhouse emissions. 

There are many types of greenhouse gases, but 6 such gases are 

controlled by the Kyoto Protocol and the Paris Agreement. This 

report refers to “carbon” and “greenhouse gas” interchangeably, 

both referring to CO2e. 

14 

SASB (2016) Technical Bulletin on Climate Risk. Available at: 

http://using.sasb.org/sasb-climate-risk-framework/ 

15 

Clark, P (2015) Mark Carney warns investors face ‘huge’ climate 

change losses. Financial Times September 30, 2015. Available 

at: https://www.ft.com/content/622de3da-66e6-11e5-97d0- 

1456a776a4f5 

16 

sciencebasedtargets.org/companies-taking-action/ 

17 

Wigglesworth, R & Foley, S (2016) Active asset managers 

knocked by shift to passive strategies FTfm April 16, 2016. 

Available at: https://www.ft.com/content/2e975946-fdbf-11e5- 

b5f5-070dca6d0a0d; Mooney, A (2016) Passive funds grow 230% 

to $6trn FTfm May 29 2016 Available at https://www.ft.com/ 

content/2552ce62-2400-11e6-aa98-db1e01fabc0c 

18 

Marriage, M (2016) 86% of active equity funds underperform. 

FTfm March 20, 2016. Available at: https://www.ft.com/content/ 

e555d83a-ed28-11e5-888e-2eadd5fbc4a4 

19 

Fernyhough, J (2016) Vanguard and BlackRock branded 

‘hypocritical’ FTAdvisor 6 September 2016. Available at: https:// 

www.ftadviser.com/2016/09/06/investments/vanguard-andblackrock-branded-hypocritical-uIBVgC0QmE2gNpc5jwF90M/ 

article.html 

20 

Bloomberg, ET Index Research calculations. 

21 

PwC (2016) Low Carbon Economy Index 2016. Avaialble at: 

http://www.pwc.co.uk/services/sustainability-climate-change/ 

insights/low-carbon-economy-index.html 

22 

Moody’s (2016) Auto sector faces rising credit risks due to 

carbon transition. Available at: https://www.moodys.com/ 

research/Moodys-Auto-sector-faces-rising-credit-risks-dueto-carbon--PR_354984; 

IIGCC (2016) Investor Expectations of 

Automotive Companies. Available at: http://www.iigcc.org/ 

files/publication-files/IIGCC_2016_Auto_report_v13_Web.pdf; 

Taylor, E (2016) German push to ban combustion-engine cars 

by 2030 wins support Reuters October 8, 2016. Available at: 

http://www.reuters.com/article/us-autos-emissions-germanyidUSKCN1280G7 

23 

Department of Justice ‘Volkswagen to Spend Up to $14.7 

Billion to Settle Allegations of Cheating Emissions Tests and 

Deceiving Customers on 2.0 Liter Diesel Vehicles’ (28 06 2016): 

https://www.justice.gov/opa/pr/volkswagen-spend-147-billionsettle-allegations-cheating-emissions-tests-and-deceiving; 

‘VW 

Engineer Pleads Guilty in Emissions-Cheating Scandal’ (09 09 

2016): http://www.wsj.com/articles/former-vw-engineer-to-pleadguilty-in-emissions-cheating-scandal-1473433341. 

24 

IEA (2016) IEA releases Oil Market Report for September. 

Available at: https://www.iea.org/newsroom/news/2016/ 

september/iea-releases-oil-market-report-for-september.htm; 

Carbon Tracker (2015) Fossil fuel sector in denial over demand 

destruction. Available at: http://www.carbontracker.org/in-themedia/fossil-fuel-sector-in-denial-over-demand-destruction/ 

25 

ACCA (2011) The carbon we’re not counting. Available at: http:// 

www.accaglobal.com/content/dam/acca/global/PDF-technical/ 

climate-change/not_counting.pdf 



60 

APPENDIX 

26 

http://uk.reuters.com/article/us-japan-carbonidUKKCN0PR0A220150717 

27 

IBID Reference 15. 

28 

2015 Avivation emissions = 781 million tonnes of CO2e. http:// 

www.atag.org/facts-and-figures.html 

29 


30 


31 


32 


33 


34 


35 


36 

IBID Reference 15 

37 


38 


39 

SASB SICS Consumption II includes: Food Retailers & 

Distributors, Apparel, Accessories & Footwear, Drug Retailers 

& Convenience Stores, Appliance Manufacturing, Multiline 

and Specialty Retailers & Distributors, Building, Products & 

Furnishings, E-Commerce, Toys & Sporting Goods. 

40 

SASB SICS Consumption I includes: Agricultural Products, 

Alcoholic Beverages, Meat, Poultry & Dairy, Tobacco, Processed 

Food, Household & Personal Products, Non-Alcoholic Beverages. 

41 

The Greenhouse Gas (GHG) Protocol (2011) Corporate Value 

Chain (Scope 3) Accounting and Reporting Standard. Available 

at: http://www.ghgprotocol.org/standards/scope-3-standard; 

Downie, J. & Stubbs, W. (2011) Evaluation of Australian 

companies’ scope 3 greenhouse gas emissions assessments. 

Journal of Cleaner Production. 56(1): 156–163; Stechemesser, K. 

& Guenther, E. (2012) Carbon accounting: a systematic literature 

review Journal of Cleaner Production. 36:17-38 

42 

(Schaltegger, S. and Csutora, M. (2012) Carbon accounting for 

sustainability and management. Status quo and challenges. 

Journal of Cleaner Production. 36: 1-16 

43 

Schaltegger, S. and Csutora, M. (2012) Carbon accounting for 

sustainability and management. Status quo and challenges. 

Journal of Cleaner Production. 36: 1-16 

44 

Lesourd, J. & Schilizzi, S. (2001) The Environment in Corporate 

Management. New Directions and Economic Insights. Edward 

Elgar: London. 

45 

Carbon Clear (2016) Sustainability Performance of the FTSE 

100. Available at: https://carbon-clear.com/files/FTSE_100_ 

Report_2015.pdf 

46 

The net present value of emissions can be calculated as the 

discounted sum of the product of emissions-intensity, revenue 

and the cost of emissions at each future date. Cost of emissions 

scenarios play out on a global or regional scale – they are not 

company specific. Investors may form a view on likely emissions 

cost scenarios and apply this same view to calculations for all 

companies. The risk-adjusted discount rate and revenue numbers 

are very company specific, but this is a part of traditional financial 

disclosure and analysis, not climate-related disclosure. Thus, the 

only climate-related element of this equation that a company 

can inform is its current level of emissions-intensity and the 

expected changes in this level. While future changes in emissions 

intensities may be more forecastable than profits, they can only 

ever be estimates. Thus, the core climate-related disclosure 

information that a company can produce for these purposes are 

its current emissions and emissions intensities. 

47 

https://www.fsb-tcfd.org/publication/phase-i/# 

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