The first ever CDP Europe Report, produced by CA Cheuvreux, is based on the largest 300 European* companies responses to climate change. European companies outperform other world regions on setting emissions reduction plans, however the average annual 2.2% emissions intensity reduction these targets will achieve is not high enough to hit the EU goal of cutting absolute emissions by 20% by 2020. In addition many companies are currently setting targets through to just 2012, waiting for the outcome of the UN COP-15 meeting in Copenhagen before they set further targets post 2012.

Paul Dickinson, CEO of the Carbon Disclosure Project said: ‘European companies are leading on reduction targets and we see a lot of evidence of the impact of regulation, such as the EU Emissions Trading Scheme, as well as targets set by national governments, encouraging companies to set voluntary targets. This report shows that progress is good, but we still have further to go for companies in Europe to reduce their emissions in line with EU targets of 20% by 2020.’

The two main levers for emissions reduction cited by companies are cuts in energy consumption and increased use of low-carbon fuels. Although energy efficiency is most commonly mentioned, by some 50% of responding companies; the greatest share of identified investments – some €50 billion – will be directed towards low-carbon technologies including wind, nuclear and carbon capture & storage. Solar energy is the most frequently cited renewable technology investment among CDP Europe 300 companies.

Within certain sectors, reported emissions decreased year on year – for Oil & Gas and Metals and Mining, the main causes were decreases in activity or production, or divestments. However despite the economic slowdown, emissions within some sectors increased: Building Materials saw an increase largely due to acquisitions and Electric Utilities saw a 16% increase, due to acquisitions and increased activity.

Francois Simon, Chairman & CEO of CA Cheuvreux, the report writers, said: “Disclosure by European companies has improved substantially in recent years, from both a quantitative and a qualitative standpoint. In more than 80% of European companies, top managers take an active role in climate change issues. Due to an increasing interest in this subject on behalf of the buy side, we place this matter at the heart of our research and investment services.”

Bayer, BASF, HSBC, Rio Tinto and Carnival are the highest scoring companies within the Europe 300 Carbon Disclosure Leadership Index (CDLI), which rates firms according to the level and quality of their disclosure and reporting on greenhouse gas emissions and climate change strategy data. These companies demonstrate high levels of understanding and reporting on the impacts of climate change for their business.

Henri de Castries, Chairman of the Management Board and CEO of the AXA Group, the report sponsor said: “The science and economics are now clear: climate change is not only an environmental issue, but a broader threat to society as a whole and businesses will not succeed in societies that fail. I hope that this report will highlight where risks and opportunities lie and encourage the contribution of investors to building a low-carbon economy.”

Other key findings:

Ã?? Europe has the highest proportion of companies with Board level responsibility on climate change (85%).

Ã?? 90% of companies in the Europe 300 see climate change regulation creating opportunities. For instance, more than half of banks have seized the opportunity to participate in carbon markets.

Ã?? 82% response rate, equal to the response rate of the Global 500.

Ã?? 88% of companies reported Scope 1** emissions, 83% reported Scope 2 emissions

Ã?? The Scope 1 emissions reported by the Europe 300, equate to 2 billion tonnes of CO2-e, equivalent to the quantity of CO2 emissions regulated under the EU Emissions Trading Scheme.

Ã?? Indirect carbon risk tends to be poorly identified, as suggested by lower disclosure rates for Scope 3 (indirect emissions).