Climate change mitigation and resource conservation are fast becoming priorities in most business operations. Once seen as nice-to-do activities there has been a major shift in understanding of the true implications of climate change and natural resource depletion and the need for such mitigationstrategies. Organizations across the world are becoming aware of the fast changing regulations,growing consumer awareness, increasing energy prices and the resource shortages that can

In the face of such developments, building investor confidence has become increasingly important. Many investors now evaluate companies on environmental performance before making investment decisions. In a study published by MIT Sloan School of Management there was clear indication that shareholders are sensitive to environmental footprints of companies. According to the study, companies with responsible behaviour towards environment witnessed significant positive performance of their stock prices while those without environmental considerations, displayed regular and even lower performance on stock prices. Organizations worldwide are aware of such implications and are beginning to redesign and reorganize their businesses to address risks due to climate change and resource depletion.

Over the years, several platforms have opened for organizations to report and disclose their performance data internationally. Organizations such are CDP, GHG Protocol and Global Reporting Initiative (GRI), provide standardized reporting platforms that have wide acceptability by investors and other stakeholders worldwide. Other international organizations such as International Standards Organization (ISO), LEEDS, etc., provide the means for organizations to improve and certify their environment management systems as per internationally accepted norms.

CDP - Taking Centre Stage

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1 “Corporate Social Responsibility and Shareholder Value: The Environmental Consciousness of Investors”, C. Flammer, MIT Sloan School

of Management, 2011

put major dents on business performance.

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About CDPCDP, formerly known as Carbon Disclosure Project, is an international, not-for-profit organization providing the only global system for companies and cities to measure, disclose, manage and share vital environmental information. A record of 722 investors, signatories to CDP, with US$87 trillion in assets – around a third of the world’s invested capital, have asked more than 5000 organizations worldwide to disclose their environmental performance through CDP. In 2012, more than 80% of the largest listed companies around the world used CDP system for climate accountability. Overall, more than 4000 companies worldwide used CDP system as a tool for accounting their climate performance.

The growing number of investors that are signatories to CDP indicates the growing importance given to natural resource management and climate change by investor groups. The recent expansion of CDP to include water and forest in its scope further testifies to the importance given to crucial natural resources.

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2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (as on Feb)

CDP Signatories

Number of investorsInvestors' Assets (in US$ Trillion)

CDP programme in India is relatively new. Started in 2007, CDP has asked on behalf of investors, the top 200 companies by market capitalization to disclose their climate performance through the CDP system. Over the years, the country has witnessed an increase in the number of responses. From a low 35 respondents in 2007 there are now 53 respondents disclosing performance data to CDP.

CDP India

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2007 2008 2009 2010 2011 2012

No. of Respondents

No. of respondents Linear (No. of respondents)

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According to the CDP India 200 Climate Change Report, 95% of the respondents in India agree that there are risks and opportunities associated with climate change especially regulatory risk and resource cost. Another 81% believed that there is physical threat from climate change that could affect business operations. Respondents also identified changing consumer behaviour as anotherrisk that needs to be address. Overall, these results indicate that most companies in India that havemeasured environmental performance have realized that the threat climate change poses is significantlyrelevant.

CDP ranks companies based upon their overall performance and disclosure. Responding companies are ranked in two categories – Climate Disclosure Leadership Index (CDLI) and Climate Performance Leadership Index (CPLI). The first category ranks companies based on their disclosure levels while the second category ranks them based on their overall improvement since the last disclosure. In both cases, companies are ranked globally as well as country wise.

Leadership Index

Performance of Indian Companies

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While still at a nascent stage in India, the steady rise in participation in CDP disclosure by leading companies is an encouraging sign. As the CDP framework becomes more integrated with global businesses, and pressure from investors mounts, we will see more companies joining CDP thusincreasing the wealth of climate performance data available to potential investors.

All Aboard

Between 2011 and 2012, GVK Power & Infrastructure Limited and Wipro were the only two companies to demonstrate positive improvements in their ranks at CDP India’s CDLI. While Wipro climbed a singleplace to reach top spot at the Index, GVK Power & Infrastructure Limited climbed an impressive sixplaces to reach second.

Most of the activities that led to high ranking of GVK power & Infrastructure Limited at CDLI, includingthe filing of CDP, were conceptualized, designed and implemented by Agneya. Achieving such high standards of performance required clear foresight, strong action plan and top notch execution.

Several activities were at involved between the two CDP filings as shown below.

Roadmap to Success - GVK Power & Infrastructure Case Study

CDP 2011 CDP 2012

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