BP PLC, Royal Dutch/Shell Group, Alcoa Inc. and E.I. du Pont de Nemours and Co. score highest in addressing financial risk posed by climate change issues, while Exxon Mobil Corp., General Electric Co. and TXU Corp. score lowest, according to a study of 20 of the world's largest companies by the Investor Responsibility Research Center, Washington.
"All 20 profiled companies have environmental links to (executive) compensation, and 19 of the 20 companies have their top environmental officer reporting directly to the CEO or one level below," according to the study, which used a 14-point checklist to analyze the companies' responses to climate change issues in terms of board oversight, management accountability, executive compensation linkage, emissions reporting and material risk disclosure.
BP and Royal Dutch/Shell each scored 14, taking actions on all 14 points. They were followed by Alcoa and DuPont, scoring 12 each. The other scores were: American Electric Power Service Corp., IBM Corp. and Toyota Motor Corp., 10 each; Cinergy Corp., Ford Motor Co., General Motors Corp. and Honda Motor Co., nine each; International Paper Co., seven; Southern Co. and Xcel Energy Inc., six each; ChevronTexaco Corp., ConocoPhillips Co. and DaimlerChrysler AG, five each; and Exxon Mobil, GE and TXU, four each.
"It's important to indicate at the board level this is on the radar screen," Douglas G. Cogan, an IRRC director, said in an interview. "But this board discussion isn't always translated to a discussion with shareholders on policy and financial implications." DaimlerChrysler, Southern and TXU "hadn't conducted a board-level review of climate change," he added.
"This report uncovers that climate change is a new `off-balance sheet' risk that could affect shareholder value," according to a statement by Mindy S. Lubber, executive director of the Coalition for Environmentally Responsible Economies, Boston, which commissioned the study.