Carbon Disclosure Project Report 2007 Asia ex-Japan1].pdf · Fundação CESP Brazil Fundação Codesc de Seguridade Social Brazil Fundação Copel de Previdência e Assistência Social

ASrIA project work funded byThe Sigrid Rausing Trust

Carbon Disclosure Project (CDP)Paul Dickinson+44 7958 [email protected]

Report written by ASrIA withAnalysis by Trucost

Carbon Disclosure ProjectReport 2007Asia ex-JapanOn behalf of 315 investors with assets of $41 trillion

ASrIA project work funded by

The Sigrid Rausing Trust

Report written by ASrIA

Generation InvestmentManagement UK

Hermes Investment ManagementUK

HSBC Holdings plc UK

KLP Insurance Norway

London Pensions Fund AuthorityUK

Merrill Lynch U.S.

Morgan Stanley U.S.

Morley Fund Management UK

Neuberger Berman U.S.

Newton Investment ManagementLimited UK

Pictet Asset ManagementSwitzerland

Rabobank Netherlands

Robeco Netherlands

SAM Group Switzerland

Schroders UK

Signet Capital Management LtdUK

Sompo Japan Insurance Inc.Japan

Swiss Reinsurance CompanySwitzerland

The Ethical Funds CompanyCanada

The RBS Group UK

Zurich Cantonal BankSwitzerland

CDP Members 2007In 2007, CDP launched a Membership optionfor signatories. CDP Membership allowssignatories to have a leading role in thedevelopment of CDP and gives the ability toperform improved comparative analysis ofcompany responses through the new onlinedatabase. The following investors are CDPMembers in 2007:

Carbon DisclosureProject 2007This report is based on submissions of theAsia80 companies in response to the fifthinformation request sent by the CarbonDisclosure Project (CDP5) on 1st February2007. This summary report, the full reportand all responses from corporations areavailable without charge fromwww.cdproject.net. The contents of thisreport may be used by anyone providingacknowledgment is given.

ABN AMRO Bank N.V.Netherlands

ABP Investments Netherlands

AIG Investments U.S.

ASN Bank Netherlands

AXA Group France

BlackRock U.S.

BNP Paribas Asset Management(BNP PAM) France

BP Investment ManagementLimited UK

Caisse de Dépôts et Placementsdu Québec Canada

Caisse des Dépôts France

California Public EmployeesRetirement System U.S.

California State TeachersRetirement System U.S.

Calvert Group U.S.

Canada Pension Plan InvestmentBoard Canada

Catholic Super Australia

Ethos Foundation Switzerland

Folksam Sweden

Carbon Disclosure Project

Association for Sustainable & Responsible Investment in Asia

Credit Suisse SwitzerlandDaegu Bank South KoreaDaiwa Securities Group Inc. JapanDeka FundMaster Investmentgesellschaft

mbH GermanyDeka Investment GmbH GermanyDekaBank Deutsche Girozentrale GermanyDelta Lloyd Investment Managers GmbHGermanyDeutsche Bank GermanyDeutsche Postbank Privat InvestmentKapitalanlagegesellschaft mbH GermanyDevelopment Bank of Japan JapanDevelopment Bank of the Philippines (DBP)PhilippinesDexia Asset Management FranceDnB NOR NorwayDomini Social Investments LLC U.S.DPG Deutsche Performancemessungs-Gesellschaft fur Wertpapierportfolio mbHGermanyDWS Investment GmbH GermanyEnvironment Agency Active Pension FundUKEpworth Investment Management UKErste Bank der OesterreichischenSparkassen AG AustriaEthos Foundation SwitzerlandEureko B.V. NetherlandsEurizon Capital SGR ItalyEvli Asset Management FinlandF&C Asset Management UKFAELCE - Fundação Coelce de Seguridade

Social BrazilFAPES - Fundação de Assistencia ePrevidencia Social do BNDES BrazilFédéris Gestion d’Actifs FranceFIPECq - Fundação de PrevidênciaComplementar dos Empregados e

Servidores BrazilFirst Affirmative Financial Network, LLC U.S.First Swedish National Pension Fund (AP1)

SwedenFirstRand Ltd. South AfricaFive Oceans Asset Management Pty Limited

AustraliaFolksam Sweden Fondaction CanadaFonds de Reserve pour les Retraites - FRR

FranceFortis Investments Belgium

BP Investment Management Limited UKBrasilprev Seguros e Previdencia S.A.BrazilBritish Coal Staff Superannuation Scheme

UKBritish Columbia Investment ManagementCorporation (bcIMC) CanadaBT Financial Group AustraliaBVI Bundesverband Investment und AssetManagement e.V. GermanyCAAT Pension Plan CanadaCaisse de Dépôts et Placements du QuébecCanadaCaisse des Dépôts FranceCaixa Economica Federal BrazilCalifornia Public Employees Retirement

System U.S.California State Teachers RetirementSystem U.S.California State Treasurer U.S.Calvert Group U.S.Canada Pension Plan Investment Board

CanadaCanadian Friends Service CommitteeCanadaCarlson Investment Management SwedenCarmignac Gestion FranceCatholic Superannuation Fund (CSF)

AustraliaCCLA Investment Management Ltd UKCentral Finance Board of the Methodist

Church UKCeres U.S.CERES-Fundação de Seguridade Social

BrazilCheyne Capital Management (UK) LLP UKChristian Super Australia CI Mutual Funds

Signature Funds Group CanadaCIBC CanadaCitizens Advisers Inc U.S.ClearBridge Advisers Social AwarenessInvestment U.S.Close Brothers Group plc UKComité syndical national de retraite BâtirenteCanadaCommerzbankAG GermanyConnecticut Retirement Plans and TrustFunds U.S.Co-operative Insurance Society UKCredit Agricole Asset Management France

CDP Signatories 2007315 investors were signatories to the CDP5

information request dated 1st February 2007including:

Aachener GrundvermogenKapitalanlagegesellschaft mbH GermanyAberdeen Asset Managers UKABN AMRO Bank N.V. NetherlandsABP Investments NetherlandsABRAPP - Associação Brasileira das

Entidades Fechadas de PrevidênciaComplementar BrazilAcuity Investment Management Inc CanadaAegon N.V. Netherlands Aeneas Capital Advisors U.S.AIG Investments U.S.Alcyone Finance FranceAllianz Group GermanyAMP Capital Investors AustraliaAmpegaGerling Investment GmbH GermanyANBID - National Association of BrazilianInvestment Banks BrazilASN Bank NetherlandsAstra Investimentos Ltda BrazilAustralia and New Zealand Banking Group

Limited AustraliaAustralian Ethical Investment LimitedAustraliaAustralian Reward Investment Alliance(ARIA) AustraliaAviva plc UK AXA Group FranceBaillie Gifford & Co. UKBanco Bradesco S.A. BrazilBanco do Brazil BrazilBanco Fonder SwedenBanco Pine S.A. BrazilBank Sarasin & Co, Ltd SwitzerlandBarclays Group UKBayernInvest Kapitalanlagegesellschaft mbHGermanyBBC Pension Trust Ltd UKBeutel Goodman and Co. Ltd CanadaBlackRock U.S.BMO Financial Group CanadaBNP Paribas Asset Management (BNP PAM)FranceBoston Common Asset Management, LLCU.S.


Midas International Asset Management

South KoreaMitsubishi UFJ Financial Group (MUFG)JapanMitsui Sumitomo Insurance Co Ltd JapanMizuho Financial Group, Inc. JapanMonte Paschi Asset Management S.G.R. -

S.p.A ItalyMorgan Stanley Investment ManagementU.S.Morley Fund Management UKMunchner Kapitalanlage AG GermanyMunich Re Group GermanyNational Australia Bank Limited AustraliaNational Bank of Kuwait KuwaitNational Pensions Reserve Fund of Ireland

IrelandNatixis FranceNedbank Group South AfricaNeedmor Fund U.S.Neuberger Berman U.S.New York City Employees Retirement

System U.S.New York City Teachers Retirement SystemU.S.New York State Common Retirement FundU.S.Newton Investment Management Limited UKNFU Mutual Insurance Society UKNikko Asset Management Co., Ltd. JapanNorinchukin Zenkyouren Asset Management

Co., Ltd JapanNorthern Trust U.S.Old Mutual plc UKOntario Municipal Employees RetirementSystem (OMERS) CanadaOntario Teachers Pension Plan CanadaOpplysningsvesenets fond (The NorwegianChurch Endowment) NorwayOregon State Treasurer U.S.Orion Energy Systems, Ltd U.S.Pax World Funds U.S.Pension Plan for Clergy and Lay Workers of

the Evangelical Lutheran Church in CanadaCanadaPETROS - The Fundação Petrobras de

Seguridade Social BrazilPGGM NetherlandsPhillips, Hager & North Investment

Management Ltd. Canada

Hospitals of Ontario Pension Plan (HOOPP)

CanadaHSBC Holdings plc UKI.DE.A.M - Integral Development Asset

Management FranceIlmarinen Mutual Pension InsuranceCompany FinlandIndexchange Investment AG GermanyIndustry Funds Management AustraliaING Investment Management Europe

NetherlandsInhance Investment Management IncCanadaInsight Investment Management (Global) LtdUKInstituto Infraero de Seguridade Social -

INFRAPREV BrazilInstituto Sebrae De Seguridade Social -SEBRAEPREV BrazilInterfaith Center on Corporate ResponsibilityU.S.Internationale Kapitalanlagegesellschaft mbH

GermanyJarislowsky Fraser Limited CanadaJupiter Asset Management UKKBC Asset Management NV BelgiumKLP Insurance Norway KPA AB SwedenLa Banque Postale AM FranceLBBW - Landesbank Baden-WürttembergGermanyLegal & General Group plc UKLibra Fund U.S.Light Green Advisors, LLC U.S.Local Authority Pension Fund Forum UKLocal Government Superannuation SchemeAustraliaLombard Odier Darier Hentsch & Cie

SwitzerlandLondon Pensions Fund Authority UKMacif Gestion FranceMaine State Treasurer U.S.Man Group plc UKMaryland State Treasurer U.S.Meag Munich Ergo KapitalanlagegesellschaftmbH GermanyMeeschaert Asset Management FranceMeiji Yasuda Life Insurance Company JapanMeritas Mutual Funds CanadaMerrill Lynch U.S.Metzler Investment Gmbh Germany

Fourth Swedish National Pension Fund, AP4

SwedenFrankfurt Trust Investment-GesellschaftmbH GermanyFrankfurter Service Kapitalanlage-Gesellschaft mbH GermanyFranklin Templeton Investment Services

GmbH GermanyFrater Asset Management South AfricaFUNCEF BrazilFundação Assistencial e Previdenciária daExtensão Rural no Rio Grande do Sul-FAPERS BrazilFundação Atlântico de Seguridade SocialBrazilFundação Banrisul de Seguridade Social

BrazilFundação CESP BrazilFundação Codesc de Seguridade Social

BrazilFundação Copel de Previdência eAssistência Social BrazilFundação Corsan - dos Funcionários daCompanhia Riograndense de SaneamentoBrazilFundação Real Grandeza BrazilFundação Rede Ferroviaria de SeguridadeSocial - Refer BrazilFundação São Francisco de SeguridadeSocial BrazilFundação Vale do Rio Doce de Seguridade

Social - VALIA BrazilGartmore Investment Management plc UKGeneration Investment Management UKGenus Capital Management CanadaGjensidige Forsikring NorwayGoldman Sachs & Co. U.S.Green Century Capital Management U.S.Green Kay Asset Management UKGroupe Investissement Responsable Inc.

CanadaGuardians of New Zealand SuperannuationNew ZealandHastings Funds Management LimitedAustraliaHelaba Invest Kapitalanlageggesellschaft

mbH GermanyHenderson Global Investors UKHermes Investment Management UKHESTA Super Australia



Tri-State Coalition for Responsible Investing

U.S.UBS AG SwitzerlandUnibanco Asset Management BrazilUniCredit Group ItalyUnion Asset Management Holding GermanyUnitarian Universalist Association U.S.United Methodist Church General Board ofPension and Health Benefits U.S.Universal Investment Gesellschaft mbH

GermanyUniversities Superannuation Scheme (USS)UKVancity Group of Companies CanadaVermont State Treasurer U.S.VicSuper Proprietary Limited AustraliaVital Forsikring ASA NorwayWachovia Corporation U.S.Walden Asset Management, a division of

Boston Trust and Investment ManagementCompany U.S.Warburg-Henderson

Kapitalanlagegesellschaft mbH GermanyWest Yorkshire Pension Fund UKWestLB Mellon Asset Management (WMAM)

GermanyWinslow Management Company U.S.YES BANK Limited IndiaYork University Pension Fund CanadaZurich Cantonal Bank Switzerland

Société Générale FranceSociété Générale Asset Management UK UKSompo Japan Insurance Inc. JapanStandard Chartered PLC UKStandard Life Investments UKState Street Corporation U.S.State Treasurer of North Carolina U.S.Storebrand Investments NorwayStratus Banco de Negócios BrazilSumitomo Mitsui Financial Group JapanSumitomo Trust & Banking JapanSuperfund Asset Management GmbHGermanySwedbank SwedenSwiss Reinsurance Company SwitzerlandSwisscanto SwitzerlandTD Asset Management Inc. and TD AssetManagement USA Inc. CanadaTeachers Insurance and Annuity Association

- College Retirement Equities Fund (TIAA-CREF) U.S.Terra Kapitalforvaltning ASA NorwayTfL Pension Fund UKThe Bullitt Foundation U.S.The Central Church Fund of Finland FinlandThe Collins Foundation U.S.The Co-operative Bank UKThe Co-operators Group Ltd CanadaThe Daly Foundation CanadaThe Dreyfus Corporation U.S.The Ethical Funds Company CanadaThe Local Government Pensions Institution(LGPI)(keva) FinlandThe RBS Group UKThe Russell Family Foundation U.S.The Shiga Bank, Ltd (Japan) JapanThe Standard Bank Group Limited

South AfricaThe Travelers Companies, Inc. U.S.The United Church of Canada - General

Council CanadaThe Wellcome Trust UKThird Swedish National Pension Fund (AP3)

SwedenThreadneedle Asset Management UKTokio Marine & Nichido Fire Insurance Co.,

Ltd. JapanTrillium Asset Management Corporation U.S.Triodos Bank Netherlands

PhiTrust Active Investors FrancePictet Asset Management SwitzerlandPioneer InvestmentsKapitalanlagegesellschaft mbH GermanyPortfolio 21 and Progressive InvestmentManagement U.S.Portfolio Partners AustraliaPrado Epargne FrancePREVI Caixa de Previdência dosFuncionários do Banco do Brasil BrazilPrudential Plc UKPSP Investments CanadaRabobank NetherlandsRailpen Investments UKRathbone Investment Management /Rathbone Greenbank Investments UKReynders McVeigh Capital Management U.S.RLAM UKRobeco NetherlandsRock Crest Capital LLC U.S.Royal Bank of Canada CanadaSAM Group SwitzerlandSamsung Investment Trust Management Co.,Ltd. South KoreaSanlam Investment Management

South AfricaSauren Finanzdienstleistungen GmbH & Co.KG GermanySavings & Loans Credit Union (S.A.) Limited.AustraliaSchroders UKScotiabank CanadaScottish Widows Investment Partnership UKSEB Asset Management AG GermanySecond Swedish National Pension Fund(AP2) SwedenSeligson & Co Fund Management Plc

FinlandService Employees International Union U.S.Seventh Swedish National Pension Fund

(AP7) SwedenShinhan Bank South KoreaShinkin Asset Management Co., Ltd JapanShinsei Bank JapanSiemens Kapitalanlagegesellschaft mbHGermanySierra Club Mutual Funds U.S.Signal Iduna Gruppe GermanySignet Capital Management Ltd UKSNS Asset Management Netherlands


Executive SummaryThe goal of the Carbon Disclosure Project is “to facilitate a dialogue, supported byquality information, from which a rational response to climate change will emerge.”In 2007, this dialogue between Asian companies and global investors took asignificant step forward. CDP5 includes responses from 44 Asia ex-Japancompanies and, for the first time, offers compelling insights into Asian companies’emerging policy responses to climate change. This is meaningful because most ofthese companies do not have the benefit of government policy guidance or carbontrading markets which would create transparent price incentives for action. Instead,they are responding to a range of pressures—from customers, competitors,investors, and global regulators—which promise to shape their long-termcompetitiveness.

In CDP5, the most important trends reflect the growing breadth and depth of theresponses. Although Asia continues to have the lowest regional response ratewithin the CDP universe at 26%, our new sample in 2007 attracted responses froma range of leading Asian companies. Stated simply, it will matter to the Asianclimate change debate what companies like Posco, TSMC, ICBC, Cathay Pacific,Siam Cement, and Infosys decide to do about their carbon emissions. They arecountry champions and important global brand names.

For investors, the key conclusions to emerge from ASrIA’s analysis of the 2007CDP responses are:

• Rising Materiality A range of Asian companies are providing more material responses which

describe strategic business initiatives to curtail carbon emissions ordevelop new process and product strategies;

• New Industry Resources Companies working on climate change strategies often rely on industry

associations and global NGOs to provide guidance on carbon disclosureand policy options;

• Governance Matters Corporate governance and the degree of top management engagement

are critical determinants in the management and disclosure of carbonemissions and the development of formal initiatives;

• Watch Korea and India Korean companies are the Asian leaders in more comprehensive carbon

reporting while Indian companies were the largest group of newrespondents; and

• Tech and Telecoms Lead, Banks and Utilities Lag The quality and quantity of responses from Asia’s tech and telecoms

companies is notable, while Asia’s banks and utilities lag their globalcounterparts in responding to CDP.

CDP5 also provides some valuable insights into future Asian climate changereporting and strategy development. In particular, thanks to the increase in theAsian sample in 2007, we have more tools to assess peer group competition oncarbon fundamentals. With initial responses from a sample of Chinese state-owned enterprises in 2006 and 2007, it appears that the CSR reporting process

In CDP5, the most importanttrends reflect the growingbreadth and depth of theresponses



which China’s leading companies are beginning to embrace may provide newdisclosures on carbon emissions. And finally, the 2007 responses offer initial datapoints on the growing impact of supply chain carbon reporting initiatives and globalsector initiatives affecting sectors like airlines and technology. Taken together,these developments suggest that CDP continues to act as a valuable catalyst andto identify important leading indicators.

CDP5 Asian Metrics

Companies surveyed 166

Response rate 26%

Highest response rate by country India 42%Korea 36%

Highest response rate by sector Telecoms 50%IT 45%

Country with largest # of new respondents India

Country with largest # of emissions disclosures Korea

Respondents discussing CDM projects 17

Respondents with strategic initiatives 9

Most comprehensive response CLP

Largest new respondent ICBC


ContentsInvestment TrendsFrom 1-D to 2-D—Asian Responses Becoming More StrategicIndustry Associations and NGOs Providing the Key ResourcesTop Management Engagement in Issues Only Just EmergingCountry Focus—Quantity versus QualitySector Focus—Two Leaders, Two Laggards

Asian Bankers Waiting for GuidanceAsian Utilities—Hiding Under a CloudAsia’s Tech Players New Carbon SophisticationCan You Hear Us Now?

Country Regulations

Data AnalysisVeteran and New ParticipationMarket CapitalizationRegional AssessmentSector AssessmentIndia versus KoreaGovernance MattersQuantitative Disclosure

The Carbon Disclosure Project

AppendicesAppendix I CDP5 QuestionnaireAppendix II GlossaryAppendix III Asia ex-Japan Companies

124671010111112

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1718192021222324

26

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The better respondents in 2007provided clear examples of a movefrom awareness to action, withcomprehensive carbon policies drivinginvestment, new products, andtechnology development.

Investment TrendsMateriality Rising

In 2006, our CDP Asia report highlighted the crucial role of country-specificgovernment policy in shaping carbon disclosure trends, Korea's positive andrelatively distinct policy initiatives, and the reporting challenges faced by Asia'sconglomerates. In 2007, with an expanded sample, we see greater dispersion inthe results both in terms of response quality and in terms of materiality. The mostpositive trend is that a meaningful sub-set of respondents in countries like Koreaare producing increasingly strategic responses which link carbon reportingdisciplines to more fundamental business decisions. Asian companies are alsobeginning to respond to a broader range of catalysts for carbon reporting, includinga new focus on customer concerns, which have the potential to spur newinvestment and product development trends. While Asian governments retain apowerful role in establishing incentives for carbon emissions reporting, local andglobal industry associations are emerging as a critical source of guidance forAsian companies seeking to respond to climate change issues.

At the country level, Korean respondents continue to demonstrate broad-basedprograms. The Indian portion of our sample saw the highest increase in responserates, but many represent an initial and incomplete effort. At the sector level,responses by Asian financials lag their global counterparts by a large margin withlow response rates and a limited understanding of the role which the financesector can play in shaping a country's sustainability footprint. By contrast, Asia'sleading tech and telecom companies are developing carbon policies as a naturalextension of their environmental management systems (EMS) and reportingstrategies. Asia's largest emitters—thermal power generators—are largely absentfrom this year's sample with the exception of a handful of higher level reporterssuch as Hong Kong's CLP Holdings.

1

Responding companies in CDP5, Asia ex-Japan

ChinaChina Unicom

Hong KongCNOOC LtdHang Seng Bank LtdIndustrial & Commercial Bank of China, Asia LtdCathay Pacific Airways LtdMTR CorpSwire Pacific LtdCLP HoldingsHong Kong Electric Holdings Ltd

IndiaMaruti Udyog LtdITC LtdOil & Natural Gas Corporation LtdICICI Bank LtdHousing Development Finance Corporation LtdReliance CapitalPunj Lloyd LtdWipro LtdBharat Heavy Electricals LtdInfosys Technologies LtdTata Steel LtdBharti Airtel LtdNational Thermal Power

IndonesiaPT Astra International

SectorTelecommunication Services

EnergyFinancialsFinancialsAir TransportIndustrialsIndustrialsUtilitiesUtilities

Consumer DiscretionaryConsumer StaplesEnergyFinancialsFinancialsFinancialsIndustrialsInformation TechnologyIndustrialsInformation TechnologyMaterialsTelecommunication ServicesUtilities

Consumer Discretionary

2007 responses link carbonreporting to business decisions


From 1-D to 2-D—Asian Responses BecomingMore Strategic

The most positive trend in this year's Asian CDP responses was the shift towarddisclosure of more strategic corporate policies linked to climate change. The betterrespondents in 2007 provided clear examples of a move from awareness to action,with comprehensive carbon policies driving investment, new products, andtechnology development. The underlying theme is that although climate changeremains a relatively new policy area in Asia, leading companies are now taking theinitiative and positioning themselves to capitalize on a shift in policy and growingconsumer awareness.

PoscoPosco is poised to significantly lower the carbon-intensity of its future steel-makingfacilities with the commercialization of its FINEX and strip casting steel productionmethods, which are significantly more energy efficient than conventional methods.The FINEX and strip casting technologies have been the focus of heavy R&Dinvestment since 1989 and the first facility with the new streamlined productionprocess is now in operation.

Swire PacificSwire reports that in conjunction with the government of Hong Kong, it has beenrunning a pilot program at several landfill sites to capture methane and direct it tothe local power grid. Already successful on one of its landfills, Swire is currentlyexploring ways to make use of methane from other landfills under its managementfor power generation.

Cathay PacificCathay Pacific Airlines, a subsidiary of Swire, plans to address climate change byoffering purchasable carbon offsets to its customers and developing more energy-efficient flight paths. With a limited palette of emissions reduction approaches inthe airline industry, these two efforts underscore Cathay’s growing focus on well-defined initiatives. Offering credits to customers has the potential to be a tangible,

Responding companies in CDP5, Asia ex-Japan

KoreaHyundai Motor Company LtdS-Oil CorpShinhan Financial Group Company LtdHynix Semiconductor IncLG Philips LCDSamsung Electronics Co LtdPoscoKT CorpSK Telecom Company LtdKorea Electric Power Corp

MalaysiaMalayan Banking

SingaporeCapitaLand LtdOverseas Chinese BankingSingapore Airlines Ltd

TaiwanAcer Inc.Delta ElectronicsTaiwan Semiconductor Manufacturing Co LtdUnited MicroelectronicsChunghwa Telecom Co Ltd

ThailandPTT Public Company LtdSiam Cement

Consumer DiscretionaryEnergyFinancialsInformation TechnologyInformation TechnologyInformation TechnologyMaterialsTelecommunication ServicesTelecommunication ServicesUtilities

Financials

FinancialsFinancialsAir Transport

Information TechnologyInformation TechnologyInformation TechnologyInformation TechnologyTelecommunication Services

EnergyMaterials

New disclosures on investment,products, and technology

development


Association for Sustainable & Responsible Investment in Asia2

3

easy access method that would permit consumers to partner with Cathay to reducetheir carbon footprint. By contrast, developing more direct flight paths throughinternational efforts is an operational solution with a lower profile but of greatervalue to underlying emissions reduction.

CapitaLandCapitaLand, one of Singapore's leading property developers, has established arange of green building initiatives. Under the auspices of the company's GreenCommittee, the Green Building Program has implemented guidelines that promotebest practices throughout the lifecycle of each project undertaken by CapitaLand.These guidelines focus on improved energy efficiency through moreenvironmentally friendly design, architecture, and environmental managementsystems (EMS). With new green building standards on the way in Singapore,CapitaLand's demonstrated track record in green design has the potential toprovide a strategic edge.

While the companies above stood out for their initiatives to develop innovativeproducts, services, and technologies, a second tier of respondents is poised toprogress in coming years as their systems and analytical efforts mature. Althoughcommentary was often limited, it is evident that a number of respondents are in theearly stages of implementing or assessing CDM projects, evaluating investmentsin renewable energy, and establishing environmental management systems toaddress potential methods to respond to shifting consumer needs. Still in thepreliminary phase of the process, the responses of these companies were notnecessarily data-rich. They do, however, indicate the incremental stages necessaryto system-wide climate change engagement.

Table 1. Company Climate Change Initiatives

A second tier of respondents isbuilding project capacity


Industry Associations and NGOs Providing theKey Resources

One new trend clearly apparent in the CDP5 is a growing reliance by Asianrespondents on industry associations for guidance on carbon reporting andmanagement strategies. The industry associations appear to be filling a vacuumcreated by limited government initiatives with a growing body of global research onbest practice responses at the industry level in regards to climate change.

Companies in Asia typically lack consistent drivers for responding to climatechange and resources to clarify emerging standards. By contrast, in the EU,companies seeking to respond to climate change issues benefit from high levelsof disclosure, stronger regulatory incentives, heavy monitoring requirements andgrowing shareholder feedback. Under the Kyoto Protocol, Asian countries, asdeveloping markets, are recognized as being vulnerable to adverse economicimpacts of climate change and are therefore not required to meet carbonemissions caps. As a result, only Japan faces binding emissions reduction targetsand is included in the rules which support international emissions trading.

Most Asian government policies, directives, and regulatory systems related tocarbon emissions and climate change are embryonic, featuring headline policystatements but limited signs of implementation. In addition, initial policyframeworks typically have a flexible timeframe and are often overlooked if the policyfocus shifts to industrial development, which may conflict with efforts to restrict thegrowth of carbon emissions or improve energy efficiency.

As a result, Asian companies, especially those in globally competitive exportsectors such as technology and building materials are increasingly relying onindustry associations to shape their emerging carbon emissions policyresponses. Some of the more frequently named associations are local, but there isstrong representation from international groups, many of which can provide atested roadmap for sector-specific carbon emissions reporting.

The World Business Council for Sustainable Development (WBCSD) has emergedas one common resource for companies developing a response to climate changeissues. Eight different companies from China, Hong Kong, Korea, Thailand andTaiwan make reference to either being members of WBCSD, following itsguidelines, or using its carbon calculation methodology. This represents 18% ofthe responding sample. For example, the president of PTT Public Company inThailand is a council member of the Thailand Business Council for SustainableDevelopment (TBCSD) and is, as a result, committed to advocating BCSD policypositions, co-chairing working groups, and ensuring the adoption of sustainablemanagement practices within PTT.

Notable references to participation in industry groups appeared in the followingresponses:

Siam Cement (WBCSD Cement Initiative)Siam Cement Group (SCG) notes that the Thai government has not yet establishedpolicies and regulatory requirements directly related to climate change.Nonetheless, SCG has implemented voluntary specific net greenhouse gas (GHG)reduction targets in order to track internal performance and respond to concernedstakeholders such as local NGOs, WBCSD, and the government. SCG participatesin the WBCSD Cement Sustainability Initiative which requests all members to setdirect carbon emissions reduction targets.

TSMC and UMC (TSIA)Four of CDP5's five Taiwan responses are from technology companies, three ofwhich referenced participation in industry group efforts. Both TaiwanSemiconductor Manufacturing Co. Ltd (TSMC) and United Microelectronics (UMC),the two largest semiconductor companies in Taiwan are members of the TaiwanSemiconductor Industrial Association (TSIA), which is a member of the WorldSemiconductor Council (WSC).

Industry associations filling thepolicy gap

Tech and building materialscompanies linking up with global

initiatives



5

Korea—A Model of Government-Industry Collaboration

Many of CDP5's Asian responses reference industry collaboration but not cleargovernment guidance. A more integrated model has emerged in Korea, which issimilar to the pattern common in Japan where the government has workedalongside the industry associations to build capacity. Coordinated by the Ministry ofCommerce, Industry & Energy (MoCIE), eight task forces address heavy energyconsuming sectors such as power generation, iron and steel, petrochemicals,cement, pulp and paper, semiconductor, automobile, and refining. Each task forceis comprised of representatives from companies, respective industryassociations, and the government. These task forces have been focusing on: (1)guidelines for measuring CO2 emissions and sector-specific strategies for climatechange; (2) voluntary reduction targets and disclosure processes; and (3)planning for voluntary emissions trading which is slated to be launched in 2007.

The industry task forces have been the focal point for the Voluntary Agreement forEnergy Saving & GHG Emissions Reduction, which was initiated by thegovernment in January 2001. Out of approximately 1,100 companies participatingin the voluntary agreement, more than 60% reported energy efficiencyimprovements amounting to 1.8m tonnes of oil equivalent and cuts in CO2emissions of 1.4m tonnes of carbon between 1998 and 2004. Based on theachievements of these task forces, MoCIE plans to upgrade government-industrycollaboration with the formation of a Government-Industry Panel on ClimateChange Initiatives sometime in 2008. The goal of this initiative will be to ensureeven more effective implementation of carbon-linked policies.

The Korean government has also played an active role in supporting industry-levelcarbon performance commitments. In the CDP5 responses, for example, HyundaiMotor indicated that the government played an important role in finalizing thevoluntary agreement with the three major automobile manufacturers' associationsin the EU to reduce CO2 emissions targets to 140g/km, from current levels of 186g/km, by 2009 for the newly registered passenger cars in the EU Community.Samsung Electronics also mentioned that the government entered into a voluntaryagreement with the World Semiconductor Council (WSC) in 1999 to reduce PFCemissions by 10% by 2010 from a 1997 baseline.

A key program of the WSC calls for members to reduce perfluorocarbon (PFC)emissions by at least 10% by 2010, even as semiconductor production isincreasing. PFCs have 6,500 times the greenhouse warming potential of carbondioxide (IPCC 2001). As a result, Taiwan's largest semiconductor players arecommitted through the TSIA and WSC to the PFC reduction program and theexternal verification of PFC emissions data.

Cathay Pacific (IATA)Cathay Pacific is a member of the International Air Transport Association (IATA)which advocates a global carbon trading scheme for aviation. In response to anestimate by IATA that inefficient air traffic management is responsible for lossesamounting to 12% of total fuel consumption, Cathay states that it works closely withIATA, the Mainland Chinese authorities, and partners in the airline industry to helpoptimize airspace and flight procedures in the region. Cathay also supports IATA'sfuel efficiency goals and has a representative on IATA's Environmental Committee.

CNOOC (API)CNOOC, the third largest National Oil Company (NOC) in China and the leader inpetroleum exploration and production, uses the American Petroleum Institute's(API) SANGEA software to measure and report GHG emissions. Originallydeveloped by Chevron Texaco and donated to the API, this program is designed toassist petroleum companies with estimating, managing, and reporting GHGemissions by aggregating the GHG data received and providing an industry-widesnapshot of emissions levels for reporting entities.

GHG calculator developed byChevron and used by CNOOC


Top Management Engagement in Issues OnlyJust EmergingThe CDP Asia sample presents high variability in the extent to which topmanagement is addressing issues of reporting and strategy. This is an importantsubject because corporate governance is a critical variable in assessing long-termcorporate environmental performance. To track this variable, the CDPquestionnaire sought information on board committees and executivemanagement structures used to provide oversight on corporate climate changeissues. Based on data available in the 2007 responses, however, in manyinstances it would be difficult to conclude that the responses given can beregarded as an official statement of corporate policy.

One aspect of this variability is exemplified by the brevity of some submissions.Such responses are unlikely to accurately represent corporate policy on thesecomplex issues, and it is therefore difficult to gauge the ongoing level ofengagement with climate change. This is not to say that such responses wererepresentative of the sample as a whole; variability is also apparent in moredetailed responses which appear to demonstrate a high level of engagement.However, the variability of the sample presented persistent issues of reliability andscope, making uniform assessment of the sample a challenge. Indeed, commonmetrics mask huge differences in the quality of the responses.

One of the key differences in responses throughout the sample was evidence ofactive engagement as compared to statements of intention. For example, manyresponses reported recently established planning committees, initiatives underconsideration, and possible future reduction targets. While some of theseresponses may represent a management that has recently become genuinelyengaged in addressing carbon emissions, it could also be that managementcommitments are still tentative. It is also possible that that lower levelmanagement or operational staff submitted responses with little direct uppermanagement oversight.

Among the responses providing useful indications of management involvement,Acer and Hyundai Motors offered interesting insights into the intersection betweenclimate governance and corporate strategy:

AcerAcer's response indicates that top management views climate change as an issuewhich must be evaluated in terms of the global footprint of their operations. Ratherthan framing its strategies in terms of its home country standards, it is developingpolicies which are consistent with the GHG reduction policy framework in thevarious countries in which it operates. For Acer, this will likely mean that trends inthe EU and North American markets will be particularly influential. Its responsealso stresses a commitment to transparency, not just domestically butinternationally, with a new policy to ask suppliers to disclose environmentalperformance data including carbon emissions and energy consumption.

Hyundai MotorsHyundai Motors reports ongoing engagement with policymakers both domesticallyand internationally. Hyundai's products are subject to CO2 emissions standards inthe United States, California (with particular regulations), Europe, Canada, andChina. As a result, the company has established a special executive managementteam which reports to the board on climate change issues. As part of the corporateplanning office, an environmental management team has also been created tohandle monitoring and reporting of climate change issues. It also supervisestechnical issues including research on financial planning tools which will make itpossible to take climate change into account for capital expenditure. In addition,managers responsible for performance on energy use and carbon emissionstargets are recognized through the job appraisal and promotion process.

Active engagement vs.statements of intention critical to

credibility



Companies looking past homecountry standards

6

7

Country Focus—Quantity versus QualityThanks to the increase in the sample size, this year's Asian CDP offers a morerealistic picture of trends at the country level. Indeed, it is becoming easier toform a picture of a "Korean" response versus a "Singaporean" response. Thisshould not be surprising as reporting norms are usually set at the country level.Nonetheless, the increase in sample size and a new contingent of first-timereporters has brought much greater diversity in the quality of responses—withsome meeting international best practice standards and others just touching thesurface. In general, material reporting continues to lag in nations with few drivers,while improvement is evident in countries where leading companies have amore international footprint.

Veteran RespondentsResponses from veteran respondents set the standard for quality submissionsacross the region. This is consistent with our finding that repeated participationcoincides with capacity building within companies to establish internalmonitoring and reporting systems. For example, veteran participants were muchmore likely to submit quantitative, verified information suitable for globalcomparison.

In general, the higher quality responses originated from Korea, Hong Kong,Taiwan and India. Not only did these better responses report on specificemissions, but many also cited plans to move toward carbon neutrality and toinvest in CDM projects. This likely reflects the fact that companies from Korea,Hong Kong, and Taiwan have long operated in global markets and are morelikely to perceive climate change as an issue which will shape long-termoperations and customer perceptions. Of the four high quality Indian responses,three came from veteran respondents, with significant international exposure orbrand equity: Infosys, Bharti Airtel and ITC.

New ParticipantsIn most instances, responses from new participants in CDP Asia reflected aninitial effort to address the climate change dialogue. Responses from Indiancompanies, which represented half of all new participants, tended to be brief andin some instances expressed a preliminary understanding of the risks and directimpacts posed by climate change to their business. Other responses from newparticipants reflected stronger foundations, typically due to existing environmentalmanagement or community engagement efforts. In many cases, however,internal mechanisms for carbon reporting were not documented or remain underdevelopment.

Two Hong Kong listed companies—ICBC and Cathay Pacific—were the only newparticipants that submitted quantitative carbon data. ICBC, one of China's "bigfour" banks and the world's largest IPO in 2006, submitted a solid first-timereport which indicated a commitment to the development of energy efficiencystrategies. Cathay Pacific's response was a reflection of ongoing work conductedby parent company Swire Pacific to develop internal systems for carbonmonitoring and programs to address specific carbon emissions impacts. Whilethis was the initial submission for Cathay Pacific and Swire, it is clear that theirfailure to respond to CDP in previous years was not an indication that they werestanding still.

New RespondentsParticipation in CDM projects, concern about brand equity, and preparation forincremental country-level policy development were some drivers mentioned bycompanies previously invited to participate in the CDP who responded for the firsttime this year. One new respondent, Oil & Natural Gas Company (ONGC),already has two existing CDM projects, 11 DNA approved projects, and 15 morein development. It is the leading central government-controlled company active indeveloping CDM projects in India.

Quality rests on governmentdrivers and multinationalaspirations

More references to CDM andenvironmental managementsystems


Concern about brand equity and consumer sentiment is clearly beginning to play amore significant role in the development of climate change policies by Asian CDPrespondents. New respondents in the 2007 sample featured numerous referencesto rising environmental awareness by consumers and potential implications foroperations and long-term profitability.

Over the past year, there have been few new broad climate change commitmentsannounced by Asian governments. Nonetheless, incremental policy steps arecreating incentives for more focused companies prepared to assume a leadershiprole. 40% of the respondents which provided improved disclosure indicated thatforthcoming regulation was an impetus for new corporate policies on carbonemissions.

Country FocusHong Kong and ChinaResponses from Hong Kong and China reflect a relatively mature understanding ofclimate change, potential impacts on business, and relevant industry specificrequirements. Given the sophistication of the Hong Kong corporate sector, it shouldnot be surprising that these responses increasingly reflect global peer groupstandards. In keeping with broader sustainability reporting trends, it is also notsurprising that the Hong Kong sample is dominated by companies which areeither government-regulated or sensitive to consumer perceptions, such as localpower companies, CLP Holdings and Hongkong Electric, the MTR Corporation(Hong Kong's subway operator) and air carrier Cathay Pacific.

Hong Kong companies, because of their regional and global exposure, have oftenfaced reporting challenges common to conglomerates operating in diversebusinesses and markets. This is especially true where there are varied ownershipand control structures which can inhibit access to comparable operating data.CLP's response sets a high standard both in terms of detail on emissions and arange of relevant policy developments in its different markets. First-timerespondent Swire Pacific also offers an encouraging snapshot of energy savingsprojects and CDM work which is underway in its high profile property andbeverages businesses.

CDP Asia had three responses from Chinese companies in 2007—China NationalOffshore Oil (CNOOC), China Unicom, and ICBC. Due to the dominant size ofICBC's Hong Kong listing, however, it was counted as a Hong Kong company. Ofthe three, banking sector leader ICBC was unusual, as a first-time respondent, inproviding preliminary carbon emissions figures based on energy consumption andbusiness travel. The second notable respondent, CNOOC, failed to disclose itsemissions but is pursuing CDM projects as one strategic response to its carbonfootprint.

IndiaIndia was the standout growth country in the CDP Asia sample in 2007. It was notonly the country with the most companies new to the process, but Indiancompanies also represented 50% of new responses in general. With increasedrepresentation in the Asia ex-Japan universe, responses from India were also themost diverse of any other nation, representing every industry sector in the project.

The positive response rate trend must be balanced against the fact that a highpercentage of new respondents are clearly at the early stages of developing athorough understanding of the issues and global reporting norms. Whileresponses from the Indian telecom and consumer staples sectors comparedfavorably with their regional peers, respondents from other sectors displayed aless mature understanding of the issues. If patterns from elsewhere in Asia holdtrue, this gap in response quality should be remedied over time as regulatorydrivers increase and the domestic audience for more sophisticated reportingbecomes more vocal.

Hong Kong and China companiesmoving torwards global norms

India leads with biggest increasein new respondents



9

Strong Indian submissions came from participants such as Bharti Airtel, Infosys,ICICI, ITC, and Wipro, all of which face global competition or changing markettrends. Despite these strong responses, improved performance cannot be takenfor granted. While Indian companies are open to participation in CDP, participationalone cannot always be linked to progress on carbon reporting or related businessefforts, even in high impact sectors.

The most positive trend in the Indian sample was clear evidence that Indiancompanies are making growing commitments to the development of CDM projects.In addition to ONGC, ITC, Wipro and Tata Steel mention that they are eitherconsidering CDM projects or are already in the process of setting up CDM projects.This increase in references to CDM projects is consistent with trends across Asiain 2006 as governments have implemented the critical UNCCC regulatorymechanisms for approval of CDM projects.

IndonesiaPT Astra, generally considered one of Indonesia's strongest reporters, made itsdebut in CDP in 2007. A holding company, it was unable to offer quantitative data forits overall operations. Nonetheless, reporting on a range of environmentalinitiatives suggests that among other things, the company is testing conversionfrom diesel to bio-diesel in automobiles that already meet Euro II standards. PTAstra has also set a 10% natural resource utilization reduction target as part of itsEnvironment and Social Responsibility policy which covers its group companies.

KoreaKorean companies in CDP5 continue to show progress on more comprehensiveand strategic responses. One important trend is an increase in companiesdisclosing carbon reduction targets. While only one Korean company announcedtargets in CDP4, Posco, S-Oil, KT Corp and Samsung Electronics provided data inthis critical area. At the same time, the better respondents made tangible progresson more strategic responses to climate change threats. This was particularlyevident in disclosures on specific R&D and investment initiatives by companieslike Posco and S-Oil. Two companies, Hyundai Motor and Samsung Electronics,also provided useful material outlining their carbon-related governance structuresand core business decision making processes.

Although Korean respondents have now established a pattern of capableresponses to CDP from leading companies, it was noticeable that new entries inthe overall sample tend to be lower level emitters and are less likely to respond. InCDP5, there were 16 new participants in the Korean sample, 62% (10 companies)of which were from non-manufacturing sectors such as construction, financials,internet services, and retail or trading. More importantly, only two companies, SKEnergy (SK Corp) and LG Electronics, belong to the eight target industries whichhave been participating in the government's energy efficiency task forces. Althoughboth companies have carbon monitoring systems in place, management policieson the disclosure of carbon-related information and strategies are yet to befinalized.

MalaysiaMalaysia's lone respondent in 2007 was Maybank, the country's leading bank. Arepeat respondent, Maybank lacks formal programs focused on climate change butexpects to focus on new lending and operational strategies in support ofgovernment policies.

SingaporeIn keeping with Singapore's diversified market, CDP Asia's three responses are amicrocosm of some of the key trends we find in the overall Asian sample in 2007.Financial sector respondents like OCBC appear to be at the early stages ofaddressing the broader implications of climate change on both operations andlending policies. Singapore Airlines, although less rigorous than Hong Kong'sCathay Pacific, reported emissions and may be motivated to undertake moreserious work as pending EU emissions caps come into view. Property developerCapitaland, a first-time respondent, is not ready to report emissions, but did identifya range of internal and external drivers which will support its efforts to extend its

Hyundai Motor and Samsungprovide specifics on governance

Singapore responses are amicrocosm of regional trends


TaiwanThe Taiwan sample was predictably dominated by the leading names in Taiwan'slisted technology sector. In keeping with the strong operational controls common tothe tech sector, responses displayed good familiarity with the vocabulary ofenvironmental and carbon management. Responses were divided equallybetween veteran and new respondents. TSMC and UMC, Taiwan's leadingsemiconductor companies, both referenced their participation in the TSIA programon PFCs. Only UMC's response included carbon emissions data however.Although not directly linked to the carbon discussion, Acer's response was uniquein discussing a range of product design initiatives intended to cut the energyfootprint of its PC products.

ThailandThailand's two CDP respondents offered useful insights into the reporting potentialof Asian companies in high impact sectors. PTT, the Thai government-controlled oiland gas company, and Siam Cement, a diversified building materials company, arehigh profile domestic companies that will be expected to take a leadership role.The response from Siam Cement was notable for a new CDP respondent,although it has published information in previous sustainability reports. In additionto submitting third-party verified GHG emissions data, Siam Cement was able todescribe a range of company initiatives which appear to reflect its participation inthe WBCSD Cement Sustainability Initiative. PTT's response was less detailed butindicates a solid grasp of the issues and progress on more systematic programsincluding CDM projects.

Sector Focus—Two Leaders, Two LaggardsAsian Bankers Waiting for GuidanceWith several exceptions, the 2007 CDP process makes it obvious that Asia's banksare making only slow progress in addressing the long-term economic impacts ofclimate change. It is tempting to see the limited capacity of Asian banks inassessing climate change issues as a by-product of the bureaucratic restrictionsfaced by Asian bank regulators who often have a narrow policy remit. While globalgroups such as UNEP FI are broadening their contact base in Asia, many Asianbanks lack even the environmental management capacity to address basicoperational issues.

All of the financial sector respondents displayed at least a basic perception thatclimate change is a global issue, and two-thirds acknowledged potential businessimpacts. Only one-third, however, recognized that there might be large-scaleeconomic repercussions. For example, ICICI offered a clear view that the potentiallong-term impacts on the agricultural economy could be harsh and would havefundamental effects on its business model. Despite the still limited understandingof climate change impacts, two useful strands of reporting were evident from theresponses concerning the role of energy efficiency and opportunities for newproducts.

Energy EfficiencyThe Asian banks reporting in 2007 are gradually identifying energy efficiency as thebest means to reduce carbon emissions in their industry. Four of the bankrespondents refer to or have implemented energy efficiency programs of varyingdepth and quality. Most seek to increase efficiency by decreasing air conditioningusage, replacing and minimizing lighting elements, and adjusting office behaviorpatterns, such as dress codes. Only two of the financial sector respondents hadclear energy reduction targets.

Two Hong Kong banks, Hang Seng Bank and ICBC, were alone in reportingquantitative data on emissions. Hang Seng Bank, a subsidiary of HSBC, brokedown its numbers into specific categories, detailing the degree of attention HangSeng is giving to reducing its carbon footprint.

Asian banks: focused onfacilities, worried about economic

impacts



11

Harnessing Consumer SentimentThe bank respondents primarily viewed climate change, heightened publicawareness, and shifting consumer sentiment as an opportunity to offer newinvestment products. Ironically this trend was most evident in less thoroughresponses from banks which did not see any direct risk to their business fromclimate change. In general, those respondents with a more developed grasp of theissues placed greater emphasis on carbon emissions data, energy efficiency, andother initiatives. Stronger reporters such as Hang Seng Bank focused on thecreation of external programs such as awards for energy efficient factories inGuangdong and customer education programs focused on carbon emissions.

ICICI also stands above other financials for its commitment to carbon and othersustainability issues. Understanding risks from climate change, ICICI approachescarbon finance as an opportunity to influence its industry through a number ofpublic initiatives that promote good governance, energy efficiency, green buildingsand zero emissions automobile development.

Asian Utilities—Hiding Under a CloudWith the exception of a handful of well covered respondents, Asia's fastest-growingcoal-fired power companies are still absent from CDP. Hong Kong's CLP Holdingsand Hongkong Electric, as well as Korea's KEPCO, are now establishedparticipants in CDP and have a developed investor dialogue covering emissionstrends, strategic choices, and renewables and CDM initiatives. By contrast, China'smost influential power companies—Huaneng International and Datang—have notyet provided any material data on emissions or formal policies to CDP or theinvestment community at large.

The lack of disclosure by this politically sensitive sector is a by-product of theongoing, but in many instances, still opaque policy debate on climate change byAsian governments. Indeed, where governments have yet to establish a clear policyframework, it unfortunately appears premature to expect government-invested or-controlled power companies to take the initiative in disclosing emissions orarticulating critical policy objectives. At this stage, even preliminary responses fromcompanies like India's National Thermal Power Company are of interest as a rareinsight into the current and still low level of capacity on this issue in Asia's fastestgrowing countries.

Asia's Tech Players Demonstrating New Carbon SophisticationThe Asian tech sector is emerging as a strong reporter on environmentally-linkedissues including carbon. Asia's leading tech companies, including global giantslike Samsung, TSMC, and Infosys appear to be making systematic efforts to matchthe breadth and depth of reporting common to their global competitors. For supplychain companies in the consumer electronics and components sector,engagement with international customers has provided a baseline of knowledgeabout the environmental management standards of global markets.

Virtually all of the tech sector respondents framed their responses in terms of theneed to stay competitive in a low-cost and loosely regulated sector. In this context,the development of innovative energy efficient products is a frequently cited goal forAsian tech respondents. Our sample highlighted efficiency improvements tolaptops, computers, semiconductors, LCDs, and DRAMs, as well as linkedinvestment and awards these products have received. Although many of thedisclosures had a promotional flavor, several of the responses demonstrated anacute awareness of a nuanced but increasingly demanding green marketplace.

A new trend which is beginning to affect Asia's tech companies will be the need toplay a role in their customers' carbon accounting as brands begin to evaluate theirsupply chain carbon footprints. While the majority of this year's CDP techrespondents do not monitor carbon emissions in their supply chain, Taiwan's Acerhas placed supply chain reporting at the top of its agenda. Once it has finalizednew standards, Acer has indicated that it plans to ask suppliers to disclose GHGemissions and energy consumption for every product.

Supply chain carbon reportingcould be a driver for Asian tech

No Kyoto, no disclosure for mostAsian utilities


This effort also links to an emerging awareness of carbon neutrality. Of the CDP5respondents seeking to become carbon neutral, 50% are in the tech sector.Although these companies generally stated that climate change is an incidentalrisk to their operations, a number of statements suggest that they are motivated toembrace carbon neutrality as a tool for becoming more energy efficient and raisingbrand equity. One example of the approaches being taken by Asia's techcompanies comes from Infosys which stated that it has developed its corporatecampuses to create carbon sinks and that it is planning to explore offset strategies.

Can You Hear Us Now?Like the tech sector, the five telecom respondents in the 2007 sample—ChinaUnicom, India's Bharti Airtel, Taiwan's Chungwha Telecom, Korea's KT Corp. andSK Telecom—set a generally high standard on carbon reporting. With the exceptionof China Unicom, all of the companies disclosed carbon emissions. It is alsoapparent that the respondents, especially the wireless players, understand thatthey are one of the few sectors which can benefit strategically from carbon-linkedtrends. Whether talking about wireless banking or navigation devices, Asia'swireless players are keen to be viewed as solution-providers in a carbon-constrained world. As Bharti Airtel succinctly expressed it, "communicationstechnology is a great enabler..."

A second common theme in the telecoms responses is the recognition that theirphysical assets are at risk due to adverse weather conditions and higher ambienttemperatures. This is a particular worry for operators in typhoon- and flood-proneregions in Asia. Risk to facilities and related service failures obviously pose aserious financial and reputation threat to companies as which are often heavilyregulated.



The regulatory infrastructure for company work on carbon emissions is stillimmature in Asia. In CDP4, we surveyed Asian regulatory standards and found thataspirational targets with limited market impact were the norm. For CDP5, we haveupdated our summaries of country-level regulations and find that, although therehas been progress, most Asian countries are making slow progress on thepolicies which will be crucial to a meaningful response to climate change. In part,this reflects the complex regional politics of the post-Kyoto regime. It also reflectsthe challenges that Asia’s highly competitive economies face when implementingcomplex policies which can affect competitiveness in globally-priced commodityproduct markets.

Each country in the CDP5 Asia ex-Japan report is a non-Annex 1 country under theKyoto Protocol and as such does not have mandatory carbon emissions reductiontargets. As signatories, however, they can establish a Designated National Authority(DNA) and participate in the Clean Development Mechanism (CDM). Only Taiwan isnot a signatory of the Kyoto Protocol, complicating the involvement of Taiwanesecompanies in the CDM.

The following review of country-specific carbon-related legislation is based on thebest publicly available information.

ChinaChina revealed its first national plan on climate change, the National ClimateChange Program (NCCP), in June 2007. The plan promised to adoptadministrative, economic, and legislative measures to increase power efficiency,promote renewable energy, and enlist local authorities' support to cut GHGemissions. The plan cited economic development and poverty eradication as thefirst and overriding priorities, while announcing measures to cut emissionsincluding the promotion of hydroelectric power and other clean energy sources,development and use of new energy-saving technologies, the improvement ofagricultural infrastructure, tree-planting, greater public awareness of the climatechange issue, and market measures such as resource pricing reform.

The Measures for Operation and Management of CDM Projects, effective as ofOctober 2005, aimed to facilitate the implementation of CDM projects in China inaccordance with the United Nations Framework Convention on Climate Changeand the Kyoto Protocol. It specifies energy efficiency improvement, the developmentand utilization of new and renewable energy, and methane recovery and utilizationas priority areas for development.

The Renewable Energy Law was established as a statutory framework for thedevelopment of renewable energy in China. Introduced in 2005 and effective as ofJanuary 2006, this framework set generation levels to be sourced from renewableenergy providers that energy distributors must purchase. The goal is to haverenewables account for 16% of the total energy portfolio by 2020.

13


Country RegulationsSlowly Materializing

Hong KongAt present, Hong Kong does not have any existing government initiatives in thepipeline to establish mandatory carbon emissions reduction targets for the privatesector. Efforts in the area of climate change have primarily been the by-product ofinitiatives to reduce air pollution and increase energy efficiency.

In January 2007, an implementation framework was released for a pilot emissionstrading scheme (ETS) for cross-border Hong Kong - Guangzhou thermal powerplants. This framework, however, is limited in scope and entirely voluntary. It alsoappears to have been designed to facilitate bilateral trades between interestedparties, rather than to facilitate an emissions trading market.1

IndiaIndia's Energy Conservation Act of 2001 set up legal, institutional, and regulatorymechanisms to drive energy efficiency, but participation is voluntary and notmandatory. As a Kyoto Protocol signatory, the Ministry of Environment and Forests(MoEF) houses the National Clean Development Mechanism Authority (NCDMA).India's climate-related initiatives are primarily focused on the administration ofCDM projects.

IndonesiaIndonesia has no discrete regulations related to GHG emissions. Factorytransparency has been addressed at the periphery of a voluntary disclosureprogram for pollution control, the Program for Pollution Control, Evaluation, andRating (PROPER) administered by The Environmental Impact and ManagementAgency (BAPEDAL). This program was suspended from 1998 to 2004. In 2005,Indonesia’s participation in the CDM was promulgated under Minister ofEnvironment Decree.

KoreaPolicies covering climate change in Korea have focused on government-industrycollaboration, often involving industry associations, to set standards and reductiontargets. Most recently, in September 2006, the Korean Government established theNational Energy Committee which will oversee the implementation of a nationalemissions trading system that will officially start by the end of 2007. Thegovernment will also set national targets for carbon emissions reductionsometime in 2008 based on carbon emissions data gathered from the nationalGHG registry. This will be followed by allocation of carbon reduction targets for eachindustry.

Additional measures to enhance energy efficiency will include (1) increasing theuse of renewable energy; (2) further strengthening voluntary agreements for energysaving and GHG emissions reduction with industries; and (3) stimulating cleantechnology such as carbon sequestration and storage and renewable energytechnologies.

MalaysiaIn Malaysia there are currently no government regulations covering climate change.The use of renewable energy resources is one of the key strategies promotedunder the Ninth Malaysia Plan of 2006, but participation is as yet voluntary.Malaysia participates in the CDM through their National Carbon Committee and theDNA run by their National CDM Committee housed in the Ministry of NaturalResources and Environment.

PhilippinesThere are currently no initiatives regarding climate change in the Philippines.Activities related to climate change only occur in the development and approval ofCDM projects under the Kyoto Protocol. The Designated National Authority (DNA) inthe Philippines is administered by the Department of Environment and NaturalResources (DENR).

CDM is the tool of choice



Asian countries focusing onenergy efficiency

1 Still Holding Our Breath, Civic Exchange, 2007

14

Table 2. Company CDM Initiatives


15

SingaporeSingapore is a non-Annex 1 country under the Kyoto Protocol and as such there isno GHG reduction target. Government agencies currently prefer the use of voluntaryschemes rather than legislation to encourage industry to adopt environmentallyfriendly activities. Such schemes include internal energy audits for oil refineriesand petrochemical plants, improvement of energy efficiency, and awards forenvironmentally friendly buildings.

TaiwanTaiwan's GHG Reduction Act, currently under review by the Legislative Yuan,proposes to set a national GHG reduction target. Once approved, it mandatesresponsible government agencies to set up a GHG emissions quota, developstandards and penalties for each sector, and establish mechanisms for anemissions inventory, registration, and verification. The draft Act also allows tradingin CO2 emissions quotas, and permits the extra emissions reductions achieved bycompanies to be credited to their accounts for trading or use with new investmentprojects. Taiwan is not a signatory of the Kyoto Protocol.

ThailandThe current version of Thailand's Climate Change Strategy (August 2005)integrates CDM schemes into its strategy. Thailand is in the process ofestablishing a DNA as an independent body to approve CDM projects in Thailand.Support for GHG-reduction is available from the Thai government, including directfinancial support in the form of low interest loans, tax reduction, insurance, andtechnology transfer.

Thanks to the expansion of the Asiansample in 2007 and greater focus onmarket capitalization in the selectioncriteria, the Asian sample has a highermix of companies from India, Korea,and Hong Kong/China, many of whichare well known to internationalinvestors.

Data Analysis New Data, New Depth

17

Figure 2. Global Overview - CDP5 Responses by Sample

Figure 1. Asia Ex-Japan Response RatesGlobal Overview

The responses to the CDP5 questionnaire were analyzed according to thefollowing response categories:

• Answered Questionnaires (AQ)• Provided Information (IN)• Declined to Participate (DP)• No Response (NR)

As with CDP4, the high response rate amongst FTSE 100 companies is indicativeof the fact that most of these companies are subject to both regulatory constraintsand market opportunities and have been part of previous CDP surveys. In addition,FTSE100 companies are exposed to a more diverse set of stakeholder pressuresthan their Asian counterparts. They are amongst the largest companies in the worldand many of them have significant emissions. Recent research indicates thatthese companies are responsible for approximately 1.6% of global emissions2.They also have a diverse range of shareholders and their operations tend to beglobal rather than regional. As a result, their operations, especially those indeveloping countries, are susceptible to NGO scrutiny.

The Asia ex-Japan sample in CDP5 consisted of 166 companies that werecompiled from the FTSE All Cap Asia-Pacific Region index of companies by free-float adjusted market capitalization. It consisted of the Asia 80, supplemented withthe Asian constituents of the global FT500 and a cross-section of names from theIndia 110, Electric Utility 240, and Transport 100 samples provided by CDPpartners. This broad Asian sample of 166 companies had a response rate of26%—the lowest response rate in the CDP universe. This is the same as theresponse rate recorded in ASrIA’s CDP4 report, despite changes in the size andcomposition of the sample in 2007.

2 http://www.trucost.com/henderson.html


Thanks to the expansion of the Asian sample in 2007 and greater focus on marketcapitalization in the selection criteria, the Asian sample has a higher mix ofcompanies from India, Korea and Hong Kong/China, many of which are well knownto international investors. This change in sample composition reflects a decision toexclude a number of the Chinese utility companies. These companies had beenincluded in the 2006 sample despite the fact that they were Chinese A shares andwere therefore restricted to domestic ownership.

Veteran and New Participation

Consistent with trends noted in 2006, we continue to detect learning curve effectsas companies which initially receive the information request, but fail to responddue to inexperience, eventually develop the systems and policy needed to provide acomplete answer. As a result, we note that participation improves gradually withcontinued inclusion. Of the 84 veteran companies from 2006, three moreresponded, increasing the response rate to 39% in the overall Asia universe. Thisrate outstripped the response rate of new companies, which was a much lower15%.

Figure 3. Asian Country Representation

Figure 4. Response Rates of CDP4 vs. CDP5Veteran Participants Figure 5. Response Rates of Veteran vs. New Participants

CDP5—greater focus on broadlyheld Asian shares, no Chinese A

share companies



19

Figure 6. Response Rates by Market Capitalization

Market CapitalizationAs market capitalization increases, so does the rate of response. This reflects thegreater ability, commitment and stakeholder influence on high profile companies tobe more engaged in the climate change issue.

The link between average market capitalizations and response rates is particularlynoticeable in the case of Hong Kong and Korea where we see significantly higherresponse rates for the larger companies by market capitalization. The Chinasample appears to be something of an outlier, reflecting the low response rate ofmost of the large Chinese companies. While we are beginning to note gradualprogress in CSR reporting in China, relatively few large Chinese companiespossess the data or management commitment needed to address climate changeissues at the company level.

Figure 7. Average Market Capitalization by Country

Note: Market Capitalization as of 29 August 2007

Strong link between market capand response rates in Asia’sdeveloped markets


Figure 8. Regional Overview of Response Numbers of Asia ex-Japan Companies

Regional AssessmentResponse patterns across the Asia ex-Japan sample were diverse. The majority ofthe surveys were sent to Hong Kong, India, and Korea—countries with a largecohort of large market capitalization companies. Companies from these threecountries represented 56% of the companies sampled. It should also be noted thatthe Hong Kong sample includes some Chinese companies which have listed viaHong Kong entities, thereby broadening the geographic reach of the Hong Kongsample.

India, with the second highest portion of the sample, had the highest response rateof 42%, followed by Korea and Hong Kong. The quality of responses received fromIndia was, however, less consistent than those from Korean companies reflectingthe strong regulatory mechanisms and policy guidance provided by the Koreangovernment. Responses from Taiwan companies were largely concentrated in thetech sector and appear to reflect the growing role played by industry associations inTaiwan. The Hong Kong sample was comparatively diverse and although therewere a number of strong responses, overall response rates continue to suffer froma lack of guidance to key sectors such as property.

Response patterns remain unpredictable in the China sample with China LifeInsurance, the one company to participate in the survey last year, declining toparticipate this year. Nonetheless, one of China’s leading mobile phonecompanies, China Unicom, responded for the first time. It is notable that bothcompanies come from less carbon-intensive sectors, the financials andtelecommunication services, which can make it easier to provide an initialresponse. At the same time, ICBC, the large Chinese bank which is grouped in theHong Kong sample, submitted a response in its first year as a listed company.

Diverse response trendsreflecting company maturity and

sector composition



Sector Assessment

In developed markets where CDP has a longer history, it is common to see higherresponse rates for carbon-intensive industries such as utilities, heavy industry, andenergy. In part, this reflects the fact that EU companies are subject to announcedemissions caps and emissions disclosure is, therefore, a material financial issue.In the Asia sample, however, higher response rates are associated with the lowerimpact and export-oriented sectors such as telecoms and IT. Not only do thesecompanies perceive lower operating risks from climate change, but they often faceless significant reporting challenges in assessing their carbon footprint. Forexample, telecom companies have a low share of the total sample, but the highestresponse rate, reflecting user-friendly carbon calculators for the sector. By contrast,Asian financials have a low response rate, despite their large share of the sample,seemingly due to the perception that they face limited carbon risks.

The energy sector was the exception for the carbon-intense sectors, recording arelatively high response rate despite having a low share of the sample. This mayindicate global peer pressure and marketplace incentives for the energy sector todirectly calculate and monitor emissions levels.

Figure 9. Responses by Sector

Figure 10. Response Rates and Sample Share by Sector

Low impact sectors dominateAsian response

21


India versus Korea

The different response patterns emerging from countries like India and Korea is akey theme in our 2007 CDP report. Indeed, comparing responses from these twocritical countries is difficult at best. Korea has established regulatory mechanisms.Those in India are embryonic. While both India and Korea represent the largestshare of participants and the largest number of respondents after Hong Kong, 50%of the Indian respondents are new while 80% of the Korean respondents areveterans. The other 20% of responses from Korea are from companies which havepreviously received the information request.

Statistically, the comparison by sector does not appear particularly distinct at thesector level with the exception of the industrial and financial sectors where theIndian sample has higher response rates. It should be noted that the Indianfinancial responses were all new respondents.

Korea was one of the few countries in the sample that had industrial companiesproviding information but failing to respond fully to the information request. Two ofthe companies submitted sustainability reports while the other had data, butindicated they lacked a clear disclosure policy which was needed to support aformal response. Although reasons for non-participation by Korean industrialsdoubtless vary, many of the companies fall outside of the groups currently subjectto guidance by the Korean government on carbon emissions management andreporting.

A story of experienced Koreanand first-time Indian reporters

Without government guidance,Korean industrials do not

respond



Figure 11. Response Patterns in India and Korea

Note: Veteran = Responded to both CDP4 and CDP5 New Respondents = Did not respond to CDP4 but to CDP5 New Participants = New to CDP5

22

Figure 12. Response Patterns in India and Korea by Sector

Governance MattersCompanies that report having upper management and board-level involvement inclimate change issues are much more engaged in the process of carbondisclosure. In comparison to companies without upper management and board-level involvement, such companies are more likely to have considered emissionstrading schemes, conducted verification of their emissions data, disclosed Scope1 and Scope 2 data, or implemented emissions reduction programs. In addition,top management engagement is reflected in better disclosure of hard, quantitativeengagement.

By contrast, companies without board-level or upper management engagementdemonstrate a more qualitative approach to climate change issues. They tend toperceive more general, commercial and physical trends without submitting data orconsidering the quantitative aspects of carbon disclosure. This suggests thatoperating teams submitting responses are tentative about releasing hard datawithout upper level accountability.

The importance of company boards and top management involvement in carbonissues is also significant as it is positively correlated with external audits of carbonemissions data which increases the credibility of the process both for companiesand public stakeholders.

India

Korea

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Top level and board engagementa key to better disclosure

Table 3. Top Level Management and Board Engagement in Carbon Issues

Quantitative DisclosureThe most important change in quantitative emissions disclosure patterns in 2007was the significant increase in Scope 1 emissions disclosures which set the stagefor greater transparency and comparability. Almost fifty percent of the companiesthat answered the questionnaire this year provided Scope 1 emissions data.Companies from Hong Kong and Korea were responsible for much of thisincrease. This positive trend likely reflects two underlying factors. The first is thegrowing maturity of a core group of veteran reporters. Many of these companieshave been steadily upgrading their reporting systems, moving toward globalreporting norms. This is particularly true of companies from carbon-intense sectorssuch as industrials, utilities, and materials. The second trend illustrated in the datais the presence of greater board and top-management oversight. In general,companies with board-level engagement appear more likely to want assurancesthat data gathering systems and disclosure practices are in line with global norms.

Figure 13. Companies with Quantitative Emissions DataFigure 14. Disclosure Patterns by Company

Market Capitalization



Figure 15. Quantitative Disclosure by Country

Figure 16. Quantitative Disclosure by Sector

GHG Protocol Initiative

The Greenhouse Gas Protocol Initiative (GHG Protocol) aims at harmonizing GHGaccounting and reporting standards internationally by encouraging consistentapproaches to GHG accounting. The development of these standards andcorresponding tools has become increasingly relevant since the ratification of theKyoto Protocol and the development of national, and other relevant GHGemissions trading schemes, both within and outside of the Kyoto framework. Itdefines three 'scopes' for reporting purposes.

Scope 1: Direct GHG emissionsCompanies report GHG emissions from sources they own or control.

Scope 2: Electricity indirect GHG emissionsCompanies report the emissions from the generation of purchased electricity thatis consumed in its owned or controlled equipment or operations.

Scope 3: Other indirect GHG emissionsScope 3 is an optional reporting category that allows for the treatment of all otherindirect emissions. They occur from sources not owned or controlled by thecompany.

For more information, see www.ghgprotocol.org

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The Carbon DisclosureProject

A Dialogue Between Investors and Corporations

In February 2007, CDP issued its fifth information request on behalf of 315institutional investors with assets of USD 41 trillion under management. Therequest was sent to 2,400 of the largest publicly listed companies in the world bymarket capitalization for disclosure of investment-relevant information concerningthe risks and opportunities facing these companies due to climate change. Thesecompanies included specific groups of companies in Asia, Australia, Brazil,Canada, France, Germany, India, Italy, Japan, New Zealand, Scandinavia, SouthAfrica, Switzerland, the UK, and the US. In addition, companies in the electricutilities and transport sectors received the information request. As in previousyears, the request focused upon the issues CDP has identified in conjunction withmany signatory investors, corporations and other experts as being most pertinentto the effect of climate change on company value. Those issues include risks andopportunities related to regulatory trends, changes in the physical environment,and consumer sentiment. Specific questions are also asked about total company-wide global GHG emissions and steps taken to manage and reduce emissions.

76% of FT500 companies and a total of 1,300 corporations answered the fifth CDPrequest in 2007, evidencing a significant increase in support for CDP's work fromthe 45% of FT500 companies and 235 corporations that answered the first requestin 2002.

This report specifically focuses on disclosures from the Asia ex-Japan sample ofcompanies. Data on Asian companies was drawn from responses to the Asia 80sample identified by ASrIA, the global FT500, the electric utilities and transportsamples, and the newly expanded India sample. In total, 166 companies in Asiaex-Japan were sent the information request and 44 companies ultimatelysubmitted responses.

CDP data has enabled investors, policymakers, service providers, and NGOs toaccelerate their own initiatives. Last year CDP reports were produced in English,French, German, Japanese and Portuguese and launched at a series of highprofile events in the main capital markets in the world. CDP now hosts the largestregistry of corporate greenhouse gas data in the world, and this information alongwith reports analyzing it can be downloaded free of charge at www.cdproject.net.


"The aim of CDP is to graduallyimprove information on CO2emissions and climate strategies aswell as to initiate long-term plans forthe future. I wish the CarbonDisclosure Project success with itsfurther efforts both in Germany andworldwide."

Angela Merkel,German Chancellor

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Future PlansCDP's primary goal is to continue to improve the quality and quantity of responsesfor its core disclosure activity and in doing so better inform the decision-making ofinvestors and corporations regarding the implications of climate change. In 2007,new initiatives include the launch of a user-friendly interface to its comprehensivedatabase of responses. CDP has also initiated a Supply Chain LeadershipCollaboration project to work with key sector leaders in the retail, aviation,automotive, and government sectors to help identify and reduce supply chainemissions. CDP also became a member of the Climate Disclosure StandardsBoard (CDSB) convened by the World Economic Forum in January 2007 and hasbeen funded by the UK Department for Environment to provide the Secretariat toCDSB. CDP will also continue to respond to stakeholder requests to expand, andin addition to the new initiatives for 2007 is developing further projects including:

• Expansion of the CDP process into further geographies and sectors • Expansion of the CDP process into private equity and private companies • Workshops for corporations and investors • Further development of the CDP database • Assisting Pension Funds to develop mandates incorporating climate

change criteria

"The first step towards managingcarbon emissions is to measurethem. Because in business what getsmeasured gets managed. The CarbonDisclosure Project has played acrucial role in encouragingcompanies to take the first steps inthat measurement and managementpath. If more businesses progressfurther down that measurement andmanagement path, within the contextof public policy which spurs on thebusiness leaders and drags up thebusiness laggards, then we will beable—and at surprisingly smalleconomic cost—to offset the dangerswhich climate change poses to ourworld."

Lord Adair Turner,Standard Chartered plc


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Appendix I

CDP5 Questionnaire

Carbon Disclosure Project (CDP5) Greenhouse Gas EmissionsQuestionnaireWe request a reply to the following questions by the 31st May 2007. Please answer the questions as comprehensively as possibleor state the reasons why you are unable to supply the information requested. If at this stage you can only provide indicativeinformation we still welcome this, as a ‘best guess?is more valuable to us than no response.

One of the main objectives this year is to improve the quality of the responses and standardize reporting to facilitate bettercomparison of data across and within sectors. We therefore request that answers to the following questions are provided for yourcompany as defined in your consolidated audited financial statements. If you are unable to respond on this basis, please explain whyand detail the reporting boundaries you have used.

We recognize GHG emissions and climate change have varying impacts on sectors and companies. We have therefore divided thequestionnaire into two sections to reflect these differences. Companies are encouraged to answer both partsof the questionnaire where relevant.

Section A: For all companies to complete.

Section B: For the following companies to complete:

1. Companies with combustion installations with a rated thermal input exceeding 20 MW.

2. Companies involved in the following sectors:

• automobiles & components • aerospace & defense • chemicals • construction materials • electric utilities • energy equipment & services • oil, gas & consumable fuels • metals & mining • paper & forest products • transportation

3. Companies in any sector that may be significantly influenced by GHG emissions or climate change.

New procedures for CDP in 2007.Please use our website for direct data entry via www.cdproject.net/cdp5. If necessary, send your response electronicallyin English to the Project Coordinator at [email protected].

Your response will be made publicly available at www.cdproject.net in September 2007, unless you notify us tothe contrary. If you inform us that you do not want your information disclosed, we will only use it in production ofaggregate statistics.

For additional guidance and information please see the Further Information attached to this questionnaire, or refer to the ReportingGuidance section at www.cdproject.net.

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Section A: For all companies to complete

1 Climate Change Risks, Opportunities and StrategyFor each question please state the time period and where possible the associatedfinancial implications.

a Risks: What commercial risks does climate change present to your company including, but not limited to,those listed below?

i Regulatory risks associated with current and/or expected government policy on climate change e.g. emissions limitsor energy efficiency standards.

ii Physical risks to your business operations from scenarios identified by the Intergovernmental Panel on Climate Changeor other expert bodies, such as sea level rise, extreme weather events and resource shortages.

iii Other risks including shifts in consumer attitude and demand.

b Opportunities: What commercial opportunities does climate change present to your company for both existingand new products and services?

c Strategy: Please detail the objectives and targets of the strategies you have undertaken or are planning to taketo manage these risks and opportunities. Please include adaptation to physical risks.

d Reduction targets: What are your emissions reduction targets and time frames to achieve them? What renewableenergy and energy efficiency activities are you undertaking to manage your emissions? (This question not requiredif answering Section B.)

2 Greenhouse Gas Emissions Accounting1

a Methodology: Please provide the following information on your company’s emissions measurements:i The accounting year used to report GHG emissions.2

ii The methodology by which emissions are calculated.iii Whether the information provided has been externally verified or audited.iv An explanation for any significant variations in emissions from year to year, e.g. due to major acquisitions, divestments,

introduction of new technologies, etc.

b Scope 1 and 2 of GHG Protocol: Direct and Indirect GHG emissions and electricity consumption.3

Please complete the table below for tonnes CO2e emitted and electricity consumption:

Globally Annex B CountriesScope 1 activity tonnes CO2e emitted

Scope 2 activity tonnes CO2e emitted

MWh of purchased electricity

Percentage of purchased MWh from renewables

c Scope 3 of GHG Protocol: Other Indirect GHG emissions. Where feasible please provide estimatesfor the following categories of emissions:

i Use/disposal of company’s products and services.ii Your supply chain.iii External distribution/logistics.iv Employee business travel.

1 The six main Greenhouse Gases are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6).2 If you are responding to CDP for the first time, please provide details where available, of emissions for the last three measurement cycles.3 For the purposes of responding to this section, please follow the World Resources Institute (WRI), World Business Council for Sustainable Development’s (WBCSD’s) Greenhouse Gas

Protocol (corporate standard revised version), details of which can be found at www.ghgprotocol.org

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3 Additional Greenhouse Gas Emissions AccountingUsing the methodology as set out in 2(a), please state your Scope 1 and 2 emissions asfollows:

a Countries: For each country in which you have operations, where available.

b Facilities: For facilities covered by the EU Emissions Trading Scheme (EU ETS). Please also include thenumber of allowances you were issued under the applicable National Allocation Plans.

c EU ETS impact: What has been the impact on your profitability of the EU Emissions Trading Scheme?

4 Greenhouse Gas Emissions Managementa Reduction programmes: What emission reduction programs does your company have in place?

Please include any reduction programs related to your operations, energy consumption, supply chain andproduct use/disposal.

i What is the baseline year for the emissions reduction program?ii What are the emissions reduction targets and over what period do those targets extend?iii What investment has been/will be required to achieve the targets and over what time period?iv What emissions reductions and associated costs or savings have been achieved to date as a result of the

program?v What renewable energy and energy efficiency activities are you undertaking to manage your emissions?

b Emissions trading: What is your company’s strategy for trading in the EU Emissions Trading Scheme, CDM/JI projects and other trading systems (e.g. CCX, RGGI, etc), where relevant?

c Emissions intensity: Please state which measurement you believe best describes your company’semissions intensity performance? What are your historical and current emissions intensity measurements?What are your targets?

d Energy costs: What are the total costs of your energy consumption e.g. from fossil fuels and electric power?What percentage of your total operating costs does this represent?

e Planning: Do you estimate your company’s future emissions? If so please provide details of these estimatesand summarize the methodology for this. How do you factor the cost of future emissions into capitalexpenditure planning? Have these considerations made an impact on your investment decisions?

5 Climate Change Governance

a Responsibility:i Which Board Committee or other executive body has overall responsibility for climate change?ii What is the mechanism by which the Board or other executive body reviews the company’s progress and

status regarding climate change?

b Individual performance: Do you provide incentive mechanisms for managers with reference to activitiesrelating to climate change strategy, including attainment of GHG targets? If so, please provide details.

Section B: To be completed by companies




Kyoto ProtocolA protocol to the International Convention on Climate Change (ICCC)—onceentered into force, it will require countries listed in its Annex B (developed nations)to meet reduction targets of greenhouse gas (GHG) emissions relative to their1990 levels during the period 2008-12.

Greenhouse Gas (GHG)A gas that absorbs and re-emits infrared radiation, warming the earth's surfaceand contributing to climate change (United Nations Environment Program, 1998).Some of these gases occur naturally in the atmosphere, while others are a resultof human activities, i.e. burning fossil fuels such as coal.

The Clean Development Mechanism (CDM)The CDM refers to climate change mitigation projects undertaken between Annex 1countries and non-Annex 1 countries. In this mechanism, project investmentsmust contribute to the sustainable development of the non-Annex 1 host countryand must also be independently certified.

Certified Emissions Reduction (CER)A Certified Emissions Reduction (CER) is the term for the output of CDM projects,as defined by the Kyoto Protocol.

Designated National Authority (DNA)A Designated National Authority is an established government agency responsiblefor implementing the Clean Development Mechanism (CDM) in its home country.

Annex 1 CountriesThese are the 36 industrialized countries and economies in transition listed inAnnex 1 of the United Nations Framework Convention on Climate Change(UNFCCC). Their responsibilities under the Convention are various, and include anon-binding commitment to reducing their human-induced GHG emissions to1990 levels by the year 2000.

Annex B CountriesThese are the 39 emissions-capped industrialized countries and economies intransition listed in Annex B of the Kyoto Protocol. Legally-binding emissionsreduction obligations for Annex B countries range from an 8 percent decrease(e.g. EC) to a 10 percent increase (Iceland) on 1990 levels by the first commitmentperiod of the Protocol, 2008 - 2012.

Non-Annex 1 CountriesThese are developing countries recognized by the Convention as being especiallyvulnerable to the adverse impacts of climate change, including potential economicimpacts of climate change response measures. These do not have bindingemissions reduction targets and are currently not allowed to participate in theinternational emissions trading market. They can, however, benefit fromparticipation in Clean Development Mechanism (CDM) projects with participatingAnnex I countries or other non-Annex I countries.

Appendix II

Glossary

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Appendix III

Asia ex-Japan Companies



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About ASrIA

The Association for Sustainable & Responsible Investment in Asiawww.asria.org

ASrIA is a not for profit, membership association dedicated to promoting corporateresponsibility and sustainable investment practice in the Asia Pacific region. ASrIA's membersinclude investment institutions managing over US$4 trillion in assets, however membership isopen to any organisation which has an interest in sustainable investment.

ASrIA has taken a leadership role in promoting sustainable investment in Asia since ourfounding in 2001. ASrIA has run conferences, seminars and workshops, and published wide-ranging research on SRI issues. ASrIA has also created a very wide network oforganizations and individuals interested in the broad range of policy issues and investmentstrategies which are essential to the implementation of SRI in Asia. ASrIA's website,www.asria.org, is the primary resource for SRI in Asia, attracting over 4,000 page views perday and over 5,000 subscribers to our regular e-bulletin.

Editorial team - This report was written by Scott Linder, Alexander Read-Brown, and Y.K.Park with editing and review by Melissa Brown, Sweeta Motwani, and Christy Lyons. Thelayout and design of the report was managed by Sky Koon-chow Ng.

About The Sigrid Rausing Trustwww.sigrid-rausing-trust.org

The Sigrid Rausing Trust is a philanthropic foundation based in Britain. It was set up ten yearsago by Sigrid Rausing as a grant giving trust. It takes as its guiding framework the UnitedNations’ Universal Declaration of Human Rights. The Trust’s funding categories are all humanrights orientated and aim to form a coherent framework for the work of the Trust.

THE SIGRID RAUSING TRUST

Printed on 100% recycled paper


Contacts - Carbon Disclosure Project

Paul DickinsonProject Coordinator+44 7958 772 [email protected]

Association for Sustainable & Responsible Investment in Asia (ASrIA)

Melissa BrownExecutive Director+852 3105 [email protected]

Carbon Disclosure ProjectCarbon Disclosure Project40 Bowling Green LaneLondon, EC1R 0NEUnited [email protected]

Scott LinderAssociate Director+852 3105 [email protected]

ASrIARoom 701Hoseinee House69, Wyndham StreetCentralHong Kong

ASrIA does not guarantee that the report is a comprehensive survey of carbon disclosure issues in the region. With the resources available,however, the report makes every effort to focus on key areas of relevance and to deliver data that is accurate and opinions that are objectiveand balanced.

© ASrIA 2007This Report can be quoted for non-commercial purposes with due credit to ASrIA

Documents

Carbon Disclosure Project Report 2007 Asia ex-Japan1].pdf · Fundação CESP Brazil Fundação Codesc de Seguridade Social Brazil Fundação Copel de Previdência e Assistência Social