Companies reporting effects of climate change
Companies, including longstanding Columbus-based institutions, are bracing for what climate change could mean for their bottom line.
CDP, A London-based nonprofit group formerly known as the Carbon Disclosure Project, surveys thousands of companies each year, asking what they’re doing to lower emissions and whether they anticipate financial losses and risks because of changing weather and regulations. This was the first year the group asked companies to calculate potential losses.
“What we saw last year, for the first time, was companies trying to put some numbers next to what they believe their risks and opportunities are. And I think for us, it’s too early to understand because we don’t have all of the specific sector expertise to know if that number is big enough or small enough. That’s part of the process,” said Bruno Sarda, the North America CDP president based in New York.
In results from its 2018 survey, CDP found that 215 of the world’s largest 500 companies face $1 trillion in losses unless they take steps to prepare, Sarda said.
More than 7,000 companies around the world participated, representing half of the global market in 2018, he said. Two Columbus-based companies, L Brands and Huntington Bancshares, participated in the survey.
Investors often request that companies participate.
“A lot of our work is on behalf of investors; some of it is also on behalf of other businesses looking into their supply chains,” he said.
Huntington, which has $104 billion in assets, anticipated it could lose $23.6 million if no action is taken on the climate, according to the survey responses. The company cited extreme weather events, energy costs and regulations as factors. The bank holding company received a B grade for its responses. A spokesperson declined an interview request from The Dispatch.
The company touted projects including the rooftop solar installation at the Gateway operations center on the North Side. Huntington reported 92,058 metric tons of carbon dioxide pollution, which contributes to global warming. The company broached replacing existing assets with lower emissions options when it comes to energy.
L Brands, which has stores in more than 70 countries, did not respond to an interview request. The company, known for its apparel lines and home fragrance products, received a C grade for its responses.
“The risks we do anticipate, to a lesser degree, are those around changes in both consumer and investor behavior,” the company said in its survey. “For example, it is possible that consumers will modify their shopping habits and product selection based on potential relation to climate change.”
L Brands acknowledged potential for disruptions because of “changes in average temperatures and temperature extremes, precipitation patterns and increases in frequency and severity of severe weather events such as floods, hurricanes, cyclones, tornadoes and droughts (that) will likely impact our business.”
The company did not provide an estimate for financial losses based on potential disruptions to supply chains.
“We do not feel any of these potential risks are likely to create a substantive change in our business activities or financial operations,” according to the survey.
The company reported 283,874 metric tons of carbon dioxide emissions, and a 4.7% decrease in those emissions from 2016 to 2017 because of energy-efficiency projects including at the Columbus home office.
Sarda said that percentage “isn’t necessarily a large number when compared to what some other companies have done.”
“They talk a lot about things like energy-efficiency projects, changing HVAC systems or lighting retrofits in their buildings. We applaud all of those things, but at the level of disclosure now, how are you preparing for climate impacts for your core business?” he said.
Those modifications would not be at the “level that they need to address the climate crisis as it exists today,” Sarda said.