An annual survey challenging the world's largest companies to quantify their greenhouse gas emissions, assess their risks and opportunities due to climate change and outline their strategies for operating in a post-carbon world, has been run by the UK-based Carbon Disclosure Project (CDP) since 2000.

The logic is simple: A meaningful response to the climate change challenge is dependent upon effective dialogue between shareholders and corporations, and between businesses, government and NGOs, supported by high quality information. The CDP's mission is to facilitate such dialogue and contribute to providing quality information from which a feasible and effective response to climate change can emerge.

This year the CDP sent questionnaires to over 3,000 of the world's largest corporations in 20 countries across six continents. For the second year running, South Africa has been included within the global programme, the survey extending from the JSE Top 40 last year to now include the JSE Top 100 companies.

The outcomes are being released at a series of international launch events, having started with the Global Forum in New York on 22 September, followed by high-profile launches in such cities as London, Tokyo, Rio de Janeiro, Sydney, Beijing, Hong Kong and Johannesburg.

The Global Forum event, which featured a lively debate between the policy advisers to US Presidential candidates Barack Obama and John McCain, saw the launch of the CDP's consolidated global report which reviews the outcome of the more than 1,550 company responses globally, as well as two reports on the Global 500 and US S&P 500 companies. These reports will be followed by the publication of twenty country-specific CDP reports reviewing the outcomes of the individual national CDP initiatives.

Hearteningly, the recently released Global 500 Report shows increasing levels of climate awareness and activity by the world's top companies. The response rate was an encouraging 77% in 2008, with European and North American companies setting the pace in terms of transparency. Most companies are now taking concrete steps to reduce their emissions, with 74% of the respondents reporting emissions-reduction targets. Within Retail, more than 90% of companies report such targets, with 76% in Chemicals and Pharmaceuticals and 70% in Oil and Gas.

While most companies see anticipated climate regulation as a significant risk factor, many companies have identified exciting business opportunities associated with the changing regulatory environment, including opportunities to commercialise new products and services, generate income through carbon credits, and invest in financially rewarding renewable energy projects. The construction industry, for example, cites energy efficient buildings and energy upgrades as representing significant opportunities, while the technology, media and telecoms industry sees profitable opportunities for travel substitution through teleconferencing and increased use of mobile devices. Global financial services firms recognise the impact climate change will have on capital markets and cite the need to finance initiatives that encourage groundbreaking changes in energy transmission to create a low carbon economy. They also consider reputation and the credit worthiness of investments in the portfolio as key risk areas.

Numerous sectors identified the physical risk of climate change as being material to investors. The manufacturing sector cites temperature changes, increased storm intensity, the spread of disease and changes in local weather patterns as significant physical risks, with water supply cited as an increasingly critical risk by the raw material, mining, paper & packaging and utilities sectors.

The 2008 South African CDP Report prepared by Cape Town consultancy Incite Sustainability, will be launched in Johannesburg on 19 November at an event which will include the announcement of the South African Carbon Disclosure Leadership Index (CDLI) identifying the top ten South African companies from both the carbon-intensive and low-carbon sectors.

South Africa's second CDP generated a response rate of 59%. While this was lower than last year's 74% response rate, the total number of responding companies this year was more than double that of last year when the CDP was circulated within a much smaller sample. There is also a fairly good representation of local companies within and across most sectors. The insurance and industrial sectors, for example, have a 100% response rate, while the more sizeable metals & mining sector has a 75% response rate. The response rate in some sectors remains disappointing, most notably: real estate; leisure, entertainment & hotels; and media, photography & publishing.

While the detailed analysis of the responses will only be made available following the launch of the report, the individual company-specific reports of the responding JSE 100 companies are already available on the CDP website (www.cdproject.net).

Jonathon Hanks is a visiting lecturer at the UCT Graduate School of Business. This article appeared in the September issue of Mindshift.