IBERDROLA, owner of ScottishPower in the UK, has been ranked first in a “Super-League” of European electric utilities compiled by CDP on the basis of their response to the challenges of climate change. The ranking is included in a report ‘Flicking the switch: are electric utilities prepared for a low carbon future’ released recently.
The CDP based its findings on the emissions generated by 13 major European utilities, representing around 80% of the electricity produced in Europe and sought to identify those companies that had best adapted to the challenges of operating in a continent where a global objective has been agreed to reduce emissions by 40% by 2030 against 1990 levels.
Paul Dickinson, executive chairman of CDP said: “This research provides investors with a specific tool in the form of data needed to engage with these companies on material issues. The top ranking electric utilities companies in the Super-League Table all have much lower exposure to coal, and are focusing their business towards cleaner energy sources. These companies’ shares are held in the portfolios of the world’s largest institutional investors and the way they approach regulation and invest in future technologies has a significant impact on their bottom line.”
James Magness, head of investor research at CDP added: “This research, the second in our series, has real value for investors at a time when the utilities sector is going through significant transformation. It is specifically tailored to enable investors to factor emissions data into their individual investment approaches. Investor feedback following the automotive sector report showed they want more of this detailed level of analysis. We will be researching further high emitting sectors over the next year, including materials, metals & mining, oil & gas and consumer goods.”
The ranking aims at providing investors with a tool to evaluate the exposure to carbon risk of electric utilities which are held in the portfolios of the world’s largest institutional investors, and the potential impact that exposure could have on their financial performance.
This ranking is not intended to define winners and losers for investment purposes, however, it is a proxy for business-readiness in an industry where a significantly higher carbon price is required to meet stringent long term emissions-reduction targets, CDP explained.
Sources: Iberdrola; CDP