Leadership
L'Oréal, Firmenich Top CDP’s A-Lists for Climate, Water, Deforestation

CDP named the businesses showing consistent performance on environmental issues today, as the non-profit global environmental disclosure platform, releases its prestigious annual rankings.

This year's 'A-Lists' come as the World Economic Forum Annual Meeting in Davos brings together international leaders for a week of high-level discussions on the future of the global economy, with a key topic being the threat ecological challenges pose to economic development.

Designed to harness the competitive spirit of business to raise ambition and spur action on corporate sustainability, CDP’s annual rankings score the thousands of companies that disclose their environmental action to the organization. Split across climate change, water security and forests, the A Lists provide a holistic picture of how the corporate world is addressing environmental issues. 

In a nutshell:

• 120+ companies receive an A for their action on climate change, including China Mobile, Danone, Infosys Limited, Klabin and Microsoft.

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  ACCIONA, Gap, Ford and KAO Corporation are among the 25+ companies on the A List for action on water security.

• Seven companies — including Beiersdorf, Tetra Pak and UPM-Kymmene — receive an A for their efforts to address deforestation.

• Firmenich, the world’s largest privately owned fragrance & flavor company; and French cosmetics giant L'Oréal are the only companies to get As across the board for their actions in all three categories.

Dexter Galvin, Global Director of Corporates and Supply Chains at CDP, commented: “As the recent report from the IPCC showed, the next decade is crucial in our shift to a sustainable economy, and we believe corporates are at the heart of this transition. By ranking companies, we aim not just to highlight leaders’ best practice, but to inspire all businesses to aim higher and take more action.

“That the STOXX Global Climate Change Leaders Index $$$$ which is based on the CDP A List — outperformed the STOXX Global 1800 by 5.4 percent per annum from December 2011 to July 2018, demonstrates that the leadership on environmental issues shown by the A List goes hand in hand with being a successful and profitable business.”

In the last year, over 6,800 responses from the world’s largest companies were analyzed against a diverse range of metrics including transparency, target-setting and awareness of risks and opportunities. Using a robust methodology, companies were scored from A to D- by CDP. Only the very best made the A Lists. 

“As a family-owned company, with a legacy of responsible growth, I believe that business has a critical role to play to tackle climate change with a sense of urgency,” said Firmenich CEO Gilbert Ghostine. “Building on our consistent ‘A’ rankings with CDP, we are very proud of our triple ‘A’ score this year.

“Today, all of our manufacturing sites in the U.S. and Europe are 100 percent powered by renewable electricity, on our way to reaching our goal of 100 percent worldwide by 2020. To further scale up our impact across our value chain, we are the first perfume and taste company to be mobilizing our suppliers to also disclose with CDP, as well as one of only 149 companies worldwide to have approved science-based targets.”

The companies that disclosed to CDP in 2018 did so at the request of over 650 investors with assets of US$87 trillion, and/or 115 major purchasing organizations with a combined spend of US$3.3 trillion. The data these investors and purchasers gather from CDP is crucial to inform their decision-making, help them engage with companies, reduce risks and identify opportunities.

Tegwen Le Berthe, Head of ESG Development at CPR Asset Management, commented: “The corporate environmental data CDP collects forms the backbone of the responsible investing market — without this data, investors wouldn’t have the information they require to offer ESG products and services. At CPR Asset Management, we believe that the integration of ESG data into investment processes generates value in the long term. We need to know how exposed a company is to environmental risks and their long-term strategy for the low-carbon transition, in order to identify future market leaders.

“CDP’s disclosure data underpins our ESG analysis, and the scores provide a valuable framework when comparing companies and selecting stocks.”

Other A List standouts, according to CDP, include:

• By promoting ENERGY STAR-certified products, Best Buy US helped its US customers realize utility bill savings of more than US$45 million in FY18, an energy saving which equates to removing nearly 55,000 cars from the road for a year.

• Brazilian petrochemicals company Braskem has developed Green PE, a polyethylene produced from sugarcane ethanol (a renewable feedstock), which captures and fixes CO2 from the atmosphere during its production, helping to reduce greenhouse gas emissions.

• Its state-of-the-art wastewater treatment plant in China allows Firmenich to operate a manufacturing plant that provides almost double the company’s previous manufacturing capacity. This additional capacity supports a targeted growth rate of as much as 8 percent per annum (through 2025), while efficiencies and increased sales may reduce unit costs by more than 10 percent (by 2021).

• Japanese technology company Fujitsu is working to apply artificial intelligence (AI) to a diverse array of fields, including climate change adaptation measures. It has developed technology that uses AI-powered big data analysis to enable accelerated development of recovery plans when disasters occur.

• UK property company Landsec has reduced its energy intensity by 14.3 percent (kWh/m2) by introducing energy savings initiatives; a reduction which equated to estimated cost savings of GBP£2.8 million (US$3.6 million) in 2017. 

• Danish toy maker LEGO Group launched the first LEGO elements made from plant-based plastic sourced from sugar cane, and has committed to making all LEGO products from sustainable materials by 2030.

• From 2013 to 2017, Korean electronics company LG Display developed and invested in 156 water-reuse technologies, to save about KRW 4.61 billion (US$4 million).

• Through its participation in RE100, Danish healthcare company Novo Nordisk is already sourcing 79 percent of its power for production from renewable sources and has a target of 100 percent power from renewable sources by 2020.

• Australian IT company Telstra has created a Cloud Calculator Tool which helps businesses to transition to cloud technology through quantifying GHG emissions.

• Swedish packaging business Tetra Pak has achieved 100 percent fulfilment of its chain of custody certification and now only accepts paperboard that is certified by the Forest Stewardship Council, as well as managed or controlled wood sources.

• In addition to Best Buy, Braskem, Danone, Ford and L'Oréal, other Sustainable Brands member companies to top the rankings include AT&T, Caesars Entertainment, Cisco, CVS Health, Humana, Johnson & Johnson, Kimberly-Clark, PepsiCo, Procter & Gamble, Stanley Black & Decker, Steelcase and UPS.

“Congratulations to the companies on the CDP A List for their environmental leadership impacting businesses and supply chains globally. As a CDP Supply Chain member, the wealth of information provided by CDP disclosure is critical in helping us understand how our suppliers are performing, and where we can engage with them to reduce environmental impacts and costs,” said Alexandra Palt, Chief Corporate Responsibility Officer at L'Oréal. “We particularly look to the CDP A List and scoring process to help improve the environmental performance of our suppliers, actively managing risks and identifying future opportunities.”

CDP's publicly released scores highlight increased corporate transparency and measurement of environmental action across the board, the number of organizations reporting to CDP rising 55 percent (from 4539) since 2013.