Carbon Disclosure Project

The Carbon Disclosure Project (CDP) is a registered charity set up by 385 institutional investors managing more than $50 trillion in assets. In 2008, 1,550 companies from the S&P 500, Global 500, and FTSE 350 voluntarily reported to the CDP their CO2 emissions accounting, and emission-reduction strategies.

Why are they volunteering this information? According to PricewaterhouseCoopers: "Increasingly, [industry] analysts are placing a premium on information provided about environmental, social, and governance issues, expecting greater visibility into the performance of supply chains."

Moreover, smart companies are not waiting for gov't regulation on CO2 emissions. They are getting out ahead of regulation and their competition. They are measuring their emissions (and their suppliers' emissions) and finding ways to reduce them, and then reporting this data voluntarily to investors and other stakeholders. Emissions of any kind, after all, are wastes, which represent inefficiencies and hence opportunities to cut costs and/or increase productivity. Smart companies realize that belching gases into the air and spewing toxic liquids into our soil and waterways create hidden costs for society, which we are increasingly less willing to tolerate; but companies also recognize that these wastes represent direct costs to the company. Thanks to the "lean" movement in manufacturing and supply chains, we know that any kind of waste is a drain on profit.

Thus, when we do a proper accounting of costs and lost opportunities, we see that there is very little opposition between environmentalists who lobby for reduced emissions, and businessmen who strive for bigger profits. But if an industry is inherently, hopelessly inefficient, it will be overtaken by competitors using more more efficient processes and technologies.