2016 ET CARBON RANKINGS REPORT

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16 UNDERSTANDING THE ET CARBON RANKINGS 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 Percentage of companies Public, complete and third−party assurance Public, complete and no third−party assurance Incomplete No public data ET INDEX RESEARCH 2016 CARBON RANKINGS REPORT
UNDERSTANDING THE ET CARBON RANKINGS 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 – 2,000 LARGEST LISTED COMPANIES. 2011 0 25 50 75 100 Percentage of companies 15 Categories Disclosed 10 to 14 Categories Disclosed 1 to 9 Categories Disclosed No Public Data 2016 CARBON RANKINGS REPORT ET INDEX RESEARCH
Page 1 and 2: FOREWORD 1 2016 ET CARBON RANKINGS
Page 3 and 4: 3 ABOUT ET INDEX RESEARCH ET Index
Page 5 and 6: FOREWORD 5 The international Financ
Page 7 and 8: 7 EXECUTIVE SUMMARY The 2016 ET Car
Page 9 and 10: EXECUTIVE SUMMARY 9 Carbon Context
Page 11 and 12: ENGAGED INDEXES, CARBON RISK AND PE
Page 13 and 14: ENGAGED INDEXES, CARBON RISK AND PE
Page 15: UNDERSTANDING THE ET CARBON RANKING
Page 19 and 20: UNDERSTANDING THE ET CARBON RANKING
Page 25 and 26: CARBON REDUCTION POTENTIAL 25 CARBO
Page 27 and 28: CARBON REDUCTION POTENTIAL 27 Infra
Page 29 and 30: CARBON REDUCTION POTENTIAL 29 TABLE
Page 31 and 32: CARBON REDUCTION POTENTIAL 31 Table
Page 33 and 34: CARBON REDUCTION POTENTIAL 33 Oil a
Page 35 and 36: ET GLOBAL CARBON RANKINGS 2016 35 C
Page 37 and 38: ET GLOBAL CARBON RANKINGS 2016 37 C
Page 39 and 40: ET GLOBAL CARBON RANKINGS 2016 39 T
Page 41 and 42: ET GLOBAL CARBON RANKINGS 2016 41 T
Page 43 and 44: 43 ET CARBON RANKING METHODOLOGY: E
Page 45 and 46: ET CARBON RANKING METHODOLOGY 45 KN
Page 47 and 48: ET CARBON RANKING METHODOLOGY 47 SP
Page 49 and 50: ET CARBON RANKING METHODOLOGY 49 DI
Page 51 and 52: APPENDIX 51 ET Europe 300 Carbon Ra
Page 53 and 54: APPENDIX 53 INFORMATION FOR REPORTI
Page 55 and 56: APPENDIX 55 Level 1 Thematic Sector
Page 57 and 58: APPENDIX 57 Michael is non-executiv
Page 59 and 60: APPENDIX 59 References 1 Carbon Tra
Page 61: FOREWORD 61 2016 CARBON RANKINGS RE

2016 ET CARBON RANKINGS REPORT

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