Electric Utilities Report 2009 Carbon Disclosure Project

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Electric Utilities Report 2009 Carbon Disclosure Project
Electric Utilities Report 2009
Carbon Disclosure Project

Report written for              Report Sponsor:   Carbon Disclosure Project
Carbon Disclosure Project by:                     info@cdproject.net
                                                  UK: +44 (0) 20 7970 5660
                                                  U.S.: +1 (212) 378 2086
                                                  www.cdproject.net
Electric Utilities Report 2009 Carbon Disclosure Project
CDP Electric Utilities Report 2009

Carbon Disclosure Project 2008       CDP Members 2008

This report and all of the public
responses from corporations are
available to download free of                MEMBER 2008
charge from www.cdproject.net.
The contents of this report may      ABRAPP - Associação Brasileira   Merrill Lynch & Co.,Inc. U.S.
be used by anyone providing          das Entidades Fechadas de
acknowledgement is given.                                             Mitsubishi UFJ Financial Group
                                     Previdência Complementar         (MUFG) Japan
                                     Brazil
                                                                      Morgan Stanley Investment
                                     Aegon N.V. Netherlands           Management U.S.
                                     APG Investments Netherlands      Morley Fund Management
                                     ASN Bank Netherlands             United Kingdom
                                     ATP Group Denmark                National Australia Bank Limited
                                     AXA Group France                 Australia
                                     Banco Real Brazil                Neuberger Berman U.S.
                                     BlackRock U.S.                   Newton Investment
                                                                      Management Limited
                                     BP Investment                    United Kingdom
                                     Management Limited
                                     United Kingdom                   Pictet Asset Management SA
                                                                      Switzerland
                                     Caisse de dépôt et placement
                                     du Québec Canada                 Rabobank Netherlands
                                     Caisse des Dépôts France         Robeco Netherlands
                                     California Public Employees’     SAM Group Switzerland
                                     Retirement System U.S.           Schroders United Kingdom
                                     California State Teachers        Signet Capital Management
                                     Retirement System U.S.           Switzerland
                                     Calvert Group U.S.               Sompo Japan Insurance Inc.
                                     Canada Pension Plan              Japan
                                     Investment Board Canada          Standard Chartered PLC United
                                     Catholic Super Australia         Kingdom
                                     CIBC Canada                      Sun Life Financial Inc. Canada
                                     Ethos Foundation Switzerland     Swiss Reinsurance Company
                                                                      Switzerland
                                     Folksam Sweden
                                                                      The Ethical Funds Company
                                     Fortis Investments Belgium       Canada
                                     Generation Investment            The RBS Group
                                     Management United Kingdom        United Kingdom
                                     ING Netherlands                  The Wellcome Trust
                                     KLP Insurance Norway             United Kingdom
                                     Legg Mason, Inc. U.S.            Zurich Cantonal Bank
                                     London Pensions Fund             Switzerland
                                     Authority United Kingdom
01
CDP Signatories 2008

CDP Signatories 2008                              BlackRock U.S.                                     Commerzbank AG Germany
                                                  BMO Financial Group Canada                         Companhia de Seguros Aliança do Brasil Brazil
385 investors with assets of over $57             BNP Paribas Investment Partners France             Connecticut Retirement Plans and Trust Funds U.S.
Trillion were signatories to the CDP6             Boston Common Asset Management, LLC U.S.           Co-operative Financial Services (CFS)
information request dated 1st February            BP Investment Management Limited
                                                                                                     United Kingdom
2008 including:                                   United Kingdom                                     Credit Agricole Asset Management France
                                                  Brasilprev Seguros e Previdência S/A. Brazil       Credit Suisse Switzerland
                                                  British Coal Staff Superannuation Scheme           Daegu Bank South Korea
AACHENER GRUNDVERMÖGEN KAG mbH                    United Kingdom
Germany                                                                                              Daiwa Securities Group Inc. Japan
                                                  British Columbia Investment Management
Abax Global Capital United Kingdom                Corporation (bcIMC) Canada                         DEGI Deutsche Gesellschaft für Immobilienfonds
                                                                                                     mbH Germany
Aberdeen Asset Managers United Kingdom            BT Financial Group Australia
                                                                                                     Deka FundMaster Investmentgesellschaft mbH
ABRAPP - Associação Brasileira das Entidades      BVI Bundesverband Investment und Asset             Germany
Fechadas de Previdência Complementar Brazil       Management e.V. Germany
                                                                                                     Deka Investment GmbH Germany
Acuity Funds Canada                               CAAT Pension Plan Canada
                                                                                                     DekaBank Deutsche Girozentrale Germany
Aegon N.V. Netherlands                            Caisse de dépôt et placement du Québec Canada
                                                                                                     Delta Lloyd Investment Managers GmbH Germany
Aeneas Capital Advisors U.S.                      Caisse des Dépôts France
                                                                                                     Deutsche Bank Germany
AGF Management Limited Canada                     Caixa Beneficente dos Empregados da Companhia
                                                  Siderurgica Nacional - CBS Brazil                  Deutsche Postbank Privat Investment
AIG Investments U.S.                                                                                 KAG mbH Germany
Alberta Teachers Retirement Fund Canada           Caixa de Previdência dos Funcionários do Banco
                                                  do Nordeste do Brasil (CAPEF) Brazil               Development Bank of Japan Japan
Alcyone Finance France                                                                               Development Bank of the Philippines (DBP)
                                                  Caixa Econômica Federal Brazil
Allianz Group Germany                                                                                Philippines
                                                  Caixa Geral de Depósitos Portugal
Altshuler Shacham LTD Israel                                                                         Dexia Asset Management France
                                                  California Public Employees’ Retirement System
AMP Capital Investors Australia                   U.S.                                               DnB NOR Asset Management Norway

AmpegaGerling Investment GmbH Germany             California State Teachers Retirement System U.S.   Domini Social Investments LLC U.S.

ANBID - National Association of Brazilian         California State Treasurer U.S.                    DPG Dt. Per.Gesellschaft für Wertpapierportfolio
Investment Banks Brazil                                                                              mbh Germany
                                                  Calvert Group U.S.
APG Investments Netherlands                                                                          DWS Investment GmbH Germany
                                                  Canada Pension Plan Investment Board Canada
ASB Community Trust New Zealand                                                                      Economus Instituto de Seguridade Social Brazil
                                                  Canadian Friends Service Committee Canada
ASN Bank Netherlands                                                                                 ELETRA - Fundação Celg de Seguros e Previdência
                                                  CARE Super Pty Ltd Australia                       Brazil
ATP Group Denmark
                                                  Carlson Investment Management Sweden               Environment Agency Active Pension fund
Australia and New Zealand Banking Group Limited                                                      United Kingdom
Australia                                         Carmignac Gestion France
                                                                                                     Epworth Investment Management
Australian Ethical Investment Limited Australia   Catherine Donnelly Foundation Canada               United Kingdom
Australian Reward Investment Alliance (ARIA)      Catholic Super Australia                           Erste Bank der Oesterreichischen Sparkassen AG
Australia                                         CCLA Investment Management Ltd United Kingdom      Austria
Aviva plc United Kingdom                          Central Finance Board of the Methodist Church      Ethos Foundation Switzerland
AXA Group France                                  United Kingdom                                     Eureko B.V. Netherlands
Baillie Gifford & Co. United Kingdom              Ceres U.S.                                         Eurizon Capital SGR Italy
Banco Sweden                                      CERES-Fundação de Seguridade Social Brazil         Evli Bank Plc Finland
Banco Bradesco S.A. Brazil                        Cheyne Capital Management (UK) LLP                 F&C Management Ltd United Kingdom
                                                  United Kingdom
Banco do Brazil Brazil                                                                               FAELCE – Fundação Coelce
                                                  China Investment Corporation China                 de Seguridade Social Brazil
Banco Itaú Holding Financeira Brazil
                                                  Christian Super Australia                          FAPERS – Fundação Assistencial e Previdenciária
Banco Pine S.A. Brazil                                                                               da Extensão Rural do Rio Grande do Sul Brazil
                                                  CI Mutual Funds’ Signature Advisors Canada
Banco Real Brazil                                                                                    FAPES – Fundação de Assistencia e Previdencia
                                                  CIBC Canada
Banco Santander, S.A. Spain                                                                          Social do BNDES Brazil
                                                  Citizens Advisers, Inc. U.S.
Banesprev – Fundo Banespa de Seguridade Social                                                       Fédéris Gestion d’Actifs France
Brazil                                            Clean Yield Group, Inc. U.S.
                                                                                                     First Affirmative Financial Network U.S.
Bank Sarasin & Co, Ltd Switzerland                ClearBridge Advisors, Socially Aware Investment
                                                  U.S.                                               First Swedish National Pension Fund (AP1) Sweden
Bank Vontobel Switzerland                                                                            FirstRand Ltd. South Africa
                                                  Close Brothers Group plc United Kingdom
BankInvest Denmark                                                                                   Fishman & Co. Israel
                                                  Colonial First State Global Asset Management
Barclays Group United Kingdom                     Australia                                          Five Oceans Asset Management Pty Limited
BayernInvest KAG mbH Germany                      Columbia Management U.S.                           Australia

BBC Pension Trust Ltd United Kingdom              Comité syndical national de retraite Bâtirente     Florida State Board of Administration (SBA) U.S.
                                                  Canada                                             Folksam Sweden
Beutel Goodman and Co. Ltd Canada

                                                                                                                                                        02
CDP Electric Utilities Report 2009

Fondaction Canada                                    Hermes Investment Management United Kingdom          MEAG MUNICH ERGO Asset Management GmbH
                                                                                                          Germany
Fonds de Réserve pour les Retraites – FRR            HESTA Super Australia
France                                                                                                    MEAG MUNICH ERGO KAG mbH Germany
                                                     Hospitals of Ontario Pension Plan (HOOPP) Canada
Fortis Investments Belgium                                                                                Meeschaert Gestion Privée France
                                                     Housing Development Finance Corporation Limited
Forward Funds/Sierra Club Funds U.S.                 (HDFC Ltd.) India                                    Meiji Yasuda Life Insurance Company Japan
Fourth Swedish National Pension Fund (AP4)           HSBC Holdings plc United Kingdom                     Merck Family Fund U.S.
Sweden
                                                     I.B.I. Investments House Ltd. Israel                 Meritas Mutual Funds Canada
Frankfurter Service Kapitalanlage-Gesellschaft mbH
Germany                                              IDEAM -Integral Dévelopment Asset Management         Merrill Lynch & Co.,Inc. U.S.
                                                     France
FRANKFURT-TRUST Investment                                                                                METZLER INVESTMENT GMBH Germany
Gesellschaft mbH Germany                             Ilmarinen Mutual Pension Insurance Company
                                                     Finland                                              Midas International Asset Management
Franklin Templeton Investment Services GmbH                                                               South Korea
Germany                                              Industrial Bank China
                                                                                                          Mirae Investment Asset Management South Korea
Frater Asset Management South Africa                 Industry Funds Management Australia
                                                                                                          Mistra, Foundation for Strategic
Front Street Capital Canada                          ING Netherlands                                      Environmental Research Sweden

Fukoku Capital Management Inc Japan                  Inhance Investment Management Inc Canada             Mitsubishi UFJ Financial Group (MUFG) Japan

FUNCEF - Fundação dos Economiários Federais          Insight Investment Management (Global) Ltd           Mitsui Sumitomo Insurance Co.,Ltd. Japan
Brazil                                               United Kingdom
                                                                                                          Mizuho Financial Group, Inc. Japan
Fundação AMPLA de Seguridade Social -                Instituto Infraero de Seguridade Social -
                                                     INFRAPREV Brazil                                     Monega KAG mbH Germany
Brasiletros Brazil
                                                     Insurance Australia Group Australia                  Monte Paschi Asset Management SGR S.p.A
Fundação Atlântico de Seguridade Social Brazil                                                            Italy
Fundação Banrisul de Seguridade Social Brazil        Interfaith Center on Corporate Responsibility U.S.
                                                                                                          Morgan Stanley Investment Management U.S.
Fundação Codesc de Seguridade Social - FUSESC        Internationale Kapitalanlagegesellschaft mbH
                                                     Germany                                              Morley Fund Management United Kingdom
Brazil
                                                     Investec Asset Management United Kingdom             Motor Trades Association of Australia
Fundação Corsan - dos Funcionários da                                                                     Superannuation Fund Pty Ltd Australia
Companhia Riograndense de Saneamento Brazil          Jarislowsky Fraser Limited Canada
                                                                                                          Münchner Kapitalanlage AG Germany
Fundação São Francisco de Seguridade Social          JPMorgan Asset Management U.S.
Brazil                                                                                                    Munich Re Group Germany
                                                     Jupiter Asset Management United Kingdom
Fundação Vale do Rio Doce de Seguridade Social -                                                          Natcan Investment Management Canada
VALIA Brazil                                         KBC Asset Management NV Belgium
                                                                                                          Nathan Cummings Foundation U.S.
FUNDIÁGUA - Fundação de Previdência da               KCPS and Company Israel
Companhia de Saneamento e Ambiental do Distrito                                                           National Australia Bank Limited Australia
Federal Brazil                                       KfW Bankengruppe Germany
                                                                                                          National Bank of Kuwait Kuwait
Gartmore Investment Management Ltd                   KLP Insurance Norway
                                                                                                          National Grid Electricity Group of the Electricity
United Kingdom                                       Kyobo Investment Trust Management Co., Ltd.          Supply Pension Scheme United Kingdom
GEAP Fundação de Seguridade Social Brazil            South Korea
                                                                                                          National Grid UK Pension Scheme Trustee Ltd
Generali Investments Deutschland KAG mbH             La Banque Postale Asset Management France            United Kingdom
Germany                                              LBBW - Landesbank Baden-Württemberg                  National Pensions Reserve Fund of Ireland
Generation Investment Management                     Germany                                              Ireland
United Kingdom                                       Legal & General Group plc United Kingdom             Natixis France
Genus Capital Management Canada                      Legg Mason, Inc. U.S.                                Nedbank Group South Africa
Gjensidige Forsikring Norway                         Libra Fund U.S.                                      Needmor Fund U.S.
GLG Partners LP United Kingdom                       Light Green Advisors, LLC U.S.                       Nest Sammelstiftung Switzerland
Goldman Sachs & Co. U.S.                             Living Planet Fund Management Company S.A.           Neuberger Berman U.S.
Governance for Owners United Kingdom                 Switzerland
                                                                                                          New Alternatives Fund Inc. U.S.
Groupe Investissement Responsable Inc. Canada        Local Authority Pension Fund Forum
                                                     United Kingdom                                       New Jersey Division of Investment U.S.
Guardian Ethical Management Inc Canada                                                                    New Jersey State Investment Council U.S.
                                                     Local Government Superannuation Scheme
Guardians of New Zealand Superannuation              Australia                                            New Mexico State Treasurer U.S.
New Zealand
                                                     Lombard Odier Darier Hentsch & Cie                   New York City Employees Retirement System U.S.
Hang Seng Bank Hong Kong                             Switzerland
                                                                                                          New York City Teachers Retirement System U.S.
Harrington Investments U.S.                          London Pensions Fund Authority
                                                     United Kingdom                                       New York State Common Retirement Fund
Harvard Management Company U.S.                                                                           (NYSCRF) U.S.
                                                     Macif Gestion France
HANSAINVEST Hanseatische Investment GmbH                                                                  Newton Investment Management Limited
Germany                                              Macquarie Group Limited Australia                    United Kingdom
Hazel Capital LLP United Kingdom                     Maine State Treasurer U.S.                           NFU Mutual Insurance Society United Kingdom
Health Super Fund Australia                          Man Group plc United Kingdom                         NH-CA Asset Management South Korea
Helaba Invest KAG mbH Germany                        Maple-Brown Abbott Limited Australia                 Nikko Asset Management Co., Ltd. Japan
Henderson Global Investors United Kingdom            Maryland State Treasurer U.S.                        Nissay Asset Management Corporation Japan

03
CDP Signatories 2008

Norfolk Pension Fund United Kingdom                  Sauren Finanzdienstleistungen Germany            The Dreyfus Corporation U.S.
Norinchukin Zenkyouren Asset                         Savings & Loans Credit Union (S.A.) Limited.     The Ethical Funds Company Canada
Management Co., Ltd Japan                            Australia
                                                                                                      The Local Government Pensions
North Carolina State Treasurer U.S.                  Schroders United Kingdom                         Insitution (LGPI)(keva) Finland
Northern Ireland Local Government Officers’          Scotiabank Canada                                The RBS Group United Kingdom
Superannuation Committee (NILGOSC)
United Kingdom                                       Scottish Widows Investment Partnership           The Russell Family Foundation U.S.
                                                     United Kingdom
Northern Trust U.S.                                                                                   The Shiga Bank, Ltd. Japan
                                                     SEB Asset Management AG Germany
Oddo & Cie France                                                                                     The Standard Bank of South Africa Limited
                                                     Second Swedish National Pension Fund (AP2)       South Africa
Old Mutual plc United Kingdom                        Sweden
                                                                                                      The Travelers Companies, Inc. U.S.
Ontario Municipal Employees Retirement System        Seligson & Co Fund Management Plc Finland
(OMERS) Canada                                                                                        The United Church of Canada -
                                                     SERPROS Fundo Multipatrocinado Brazil            General Council Canada
Ontario Teachers Pension Plan Canada
                                                     Service Employees International                  The Wellcome Trust United Kingdom
Opplysningsvesenets fond                             Union Benefit Funds U.S.
(The Norwegian Church Endowment) Norway                                                               Third Swedish National Pension Fund (AP3)
                                                     Seventh Swedish National Pension Fund (AP7)      Sweden
Oregon State Treasurer U.S.                          Sweden
                                                                                                      Threadneedle Asset Management United Kingdom
Orion Energy Systems, Inc. U.S.                      SH Asset Management Inc. South Korea
                                                                                                      Tokio Marine & Nichido Fire
Pax World Funds U.S.                                 Shinhan Bank South Korea                         Insurance Co., Ltd. Japan
Pension Fund for Danish Lawyers                      Shinkin Asset Management Co., Ltd Japan          Trillium Asset Management Corporation U.S.
and Economists Denmark
                                                     Shinsei Bank Japan                               Triodos Bank Netherlands
Pension Plan of the Evangelical Lutheran Church in
Canada Canada                                        Siemens KAG mbH Germany                          Tri-State Coalition for Responsible Investing U.S.

PETROS - The Fundação Petrobras de Seguridade        Signet Capital Management Ltd Switzerland        TrygVesta Denmark
Social Brazil                                        Skandia Nordic Division Sweden                   UBS AG Switzerland
PGGM Netherlands                                     SNS Asset Management Netherlands                 Unibanco Asset Management Brazil
Phillips, Hager & North Investment Management        Société Générale France                          UniCredit Group Italy
Ltd. Canada
                                                     Sompo Japan Insurance Inc. Japan                 Union Asset Management Holding AG Germany
PhiTrust Active Investors France
                                                     SPF Beheer bv Netherlands                        Unitarian Universalist Association U.S.
Pictet Asset Management SA Switzerland
                                                     Standard Chartered PLC United Kingdom            United Methodist Church General Board of Pension
Pioneer Investments KAG mbH Germany                                                                   and Health Benefits U.S.
                                                     Standard Life Investments United Kingdom
Portfolio 21 Investments U.S.                                                                         Universal-Investment-Gesellschaft mbH Germany
                                                     State Street Corporation U.S.
Portfolio Partners Australia                                                                          Universities Superannuation Scheme (USS)
                                                     Storebrand ASA Norway                            United Kingdom
Porto Seguro S.A. Brazil
                                                     Sumitomo Mitsui Financial Group Japan            Vancity Group of Companies Canada
PREVI Caixa de Previdência dos Funcionários do
Banco do Brasil Brazil                               Sumitomo Trust & Banking Japan                   Vårdal Foundation Sweden
Prudential Plc United Kingdom                        Sun Life Financial Inc. Canada                   VERITAS SG INVESTMENT TRUST GmbH Germany
PSP Investments Canada                               Superfund Asset Management GmbH Germany          Vermont State Treasurer U.S.
QBE Insurance Group Limited Australia                Sustainable World Capital U.S.                   VicSuper Pty Ltd Australia
Rabobank Netherlands                                 Svenska Kyrkan, Church of Sweden Sweden          Victorian Funds Management Corporation
Railpen Investments United Kingdom                   Swedbank Sweden                                  Australia

Rathbones/Rathbone Greenbank Investments             Swiss Reinsurance Company Switzerland            Visão Prev Sociedade de Previdencia
United Kingdom                                                                                        Complementar Brazil
                                                     Swisscanto Holding AG Switzerland
Real Grandeza Fundação de Previdência e                                                               Wachovia Corporation U.S.
Assistência Social Brazil                            TD Asset Management Inc. and TD Asset
                                                     Management USA Inc. Canada                       Walden Asset Management, a division of Boston
REDEPREV-Fundação Rede de Previdência                                                                 Trust and Investment Management Company U.S.
Brazil                                               Teachers Insurance and Annuity
                                                     Association – College Retirement Equities Fund   WARBURG-HENDERSON KAG für Immobilien mbH
RREEF Investment GmbH Germany                        (TIAA-CREF) U.S.                                 Germany

Rei Super Australia                                  Telstra Super Australia                          West Yorkshire Pension Fund
                                                                                                      United Kingdom
Rhode Island General Treasurer U.S.                  Tempis Capital Management South Korea
                                                                                                      WestLB Mellon Asset Management (WMAM)
RLAM United Kingdom                                  Terra fondsforvaltning ASA Norway                Germany
Robeco Netherlands                                   TfL Pension Fund United Kingdom                  Winslow Management Company U.S.
Rock Crest Capital LLC U.S.                          The Bullitt Foundation U.S.                      XShares Advisors U.S.
Royal Bank of Canada Canada                          The Central Church Fund of Finland Finland       YES BANK Limited India
SAM Group Switzerland                                The Collins Foundation U.S.                      York University Pension Fund Canada
Sanlam Investment Management South Africa            The Co-operators Group Ltd Canada                Youville Provident Fund Inc. Canada
Santa Fé Portfolios Ltda Brazil                      The Daly Foundation Canada                       Zurich Cantonal Bank Switzerland

                                                                                                                                                           04
Sponsor’s Letter
Carbon Disclosure Project Electric Utilities Report
March 16, 2009
As one of the first institutional investors to support the Carbon Disclosure
Project, the California State Teachers’ Retirement System is strongly committed
to the Project’s mission. For the second year in a row, the Teachers’ Retirement
Board has made climate risk management one of its signature initiatives in its
corporate governance program. We at CalSTRS are working hard to improve our
portfolio companies’ climate risk awareness and management. CDP data is
essential to enhance shareholder value through our corporate governance
engagement efforts.
We understand that metrics matter as our country grapples with a national
energy policy and as the global discussion continues on carbon trading. These
challenging economic times have shown the need for increased attention to
corporate risk management. Accurate data is the means to help mitigate risk for
the pension security of the teachers and other public employees who depend on
institutional investors such as CalSTRS. Prudent investment management
requires that shareholders know what actions corporations are taking to assess
and manage climate-related risks.
CalSTRS chose to sponsor the Electric Utilities Report because climate change
risk management within this sector is of key importance to investors. As the
most carbon-intensive sector, electric utilities must be at the forefront of
reporting and mitigation efforts to avoid exposure to potential regulation and
litigation costs.
We applaud the Carbon Disclosure Project and its signatories in producing the
Electric Utilities Report. This report opens the way for consistent and
comparable measurements, which are the bedrock of responsible public policy
and informed investment decisions.

Jack Ehnes
Chief Executive Officer
California State Teachers’ Retirement System
In 2008 (CDP6), CDP wrote to the
                                   world’s largest 249 publicly traded
                                   electric utilities globally by market
                                   capitalization requesting this
                                   information on behalf of 385 investors
                                   with US$57 Trillion of assets. This
                                   report presents an analyses of the
                                   responses received.
                                   The world’s electric power industry is
                                   poised at a transformational moment.
                                   Within two decades, it must complete
                                   a thorough overhaul of its power
                                   generation system and transmission
                                   network. In the coming era of carbon
                                   emission constraints, electric utilities

Executive                          must reduce their dependence on coal
                                   and other fossil fuels that at present
                                   produce 40% of the world’s carbon

Summary                            dioxide emissions from energy-related
                                   sources. This will require a “rapid
                                   transformation to a low-carbon,
                                   efficient and environmentally benign
                                   system of energy supply,” according
Since 2000 the Carbon Disclosure   to the latest outlook from the
                                   International Energy Agency (IEA).
Project (CDP) has, on behalf       “What is needed is nothing short of an
                                   energy revolution.” 1
of institutional investors,        This revolution will play out in slow
challenged the world’s largest     motion. Power plants are highly
                                   capital-intensive and built to last. With
companies to measure and report    long operating lifetimes, power plants
                                   lock in a flow of GHG emissions to the
their greenhouse gas (GHG)         atmosphere for many decades. The
                                   only way to halt the build-up from
emissions and other information    existing plants is to make costly
                                   retrofits to capture the carbon or retire
as to how climate change will      them early. An alternative would be to
                                   halt construction of new carbon-
affect their businesses.           emitting plants. But even this radical
                                   option would reduce emissions from
                                   the electric power sector by only 25%
                                   in 2020, relative to base-case
                                   forecasts, due to ongoing emissions
                                   from existing fossil-energy plants still
                                   in operation.2 This combination of
                                   factors argues for much greater
                                   investment in energy efficiency and
                                   demand-side management programs
                                   to reduce demand for power from new
                                   and existing plants alike.

                                   1 “World Energy Outlook: 2008,” International Energy Agency,
                                     Paris, 2008.
                                   2 Put another way, three-quarters of the projected output of
                                     electricity worldwide in 2020 (and more than half in 2030)
                                     will comes from power stations already operating today,
                                     under baseline forecasts.
Executive Summary

On the regulatory side, global                                    up 20% of the EU’s energy use. As the                  • Japan has launched a voluntary
momentum for an energy revolution is                              European Commission formulates its                       cap and trade scheme, and the
now in full swing. In the US, the year                            position for the next phase of the                       electric power sector has
opened with the launch of the Regional                            Kyoto Protocol, regulations for electric                 voluntarily pledged to reduce
Greenhouse Gas Initiative (RGGI), the                             utilities are at the center of the debate.               its GHG emissions intensity
country’s first mandatory cap-and-                                With many observers concerned that                       (per kilowatt-hour) by 20% below
trade system for fossil-fuel fired power                          carbon prices alone do not provide a                     1990 levels over five years.
plants. Utilities companies in ten                                strong enough signal to alter utility                  • China has passed a series of
Northeast and Mid-Atlantic states are                             investment decisions, several policy                     climate-related laws due to come
now getting their first taste of climate                          alternatives are being considered.                       into force at the end of 2009.
change regulation, with roughly 225                                                                                        Goals include reducing energy
power plants covered under the                                    In early March 2009, 44 members of                       consumption per unit of GDP by
emissions trading scheme.                                         the European Parliament proposed an                      20%, doubling renewable energy
                                                                  amendment to the Industrial Emissions                    capacity and monitoring the
The global economic crisis has also                               Directive to introduce an emission limit                 environmental performance of
thrust the electric power sector into                             of 350 grams CO2 per kWh electricity                     carbon-intensive industries.4
the spotlight. Less than a month into                             produced for any new power plants.                     • Russia has set a goal to reduce the
his first term, President Obama signed                            The limit would be applicable from                       country’s energy intensity per unit
into law a stimulus package that puts                             2020 for new plants and from 2025                        of GDP by at least 40% from 2007
clean energy and energy efficiency at                             for existing plants. Such an emissions                   levels by 2020. In January 2009, the
the center of economic recovery plans.                            performance standard would                               government also approved targets
The package – 13% of which is                                     effectively rule out any new coal-fired                  to generate 4.5% of energy from
devoted to climate and energy issues –                            plants as well as older, single cycle                    renewable sources by 2020,
includes nearly US$41 Billion in                                  gas-fired plants without carbon                          although details on how this will be
funding for renewable energy research                             capture and storage. While the                           achieved are not yet clear.5
and development, energy efficiency                                amendment has garnered significant                     • India is also adopting new
and building retrofit programs, smart                             support and is being supported by                        regulations for its utilities sector in
grid development, a loan guarantee                                various NGO groups, it is still unclear                  an effort to cut GHG emissions.
program for rapid deployment of clean                             if it can clear a plenary vote.                          As a part of the national action plan
technology, carbon capture and                                                                                             on climate change, the government
storage (CCS) demonstration and                                   Other countries around the globe are
                                                                  following suit and forming climate                       has announced a new renewable
green job training. The stimulus also                                                                                      energy standard for utilities;
extends the “production tax credit”                               change policies that will profoundly
                                                                  reshape the electric power sector.                       companies will be required to
for wind energy by three years and                                                                                         purchase 5% of their power from
includes tax credit extensions for                                • Australia has announced the                            renewable sources by 2010, after
biomass, geothermal, landfill gas and                               details of its Carbon Pollution                        which the minimum standard will
some hydropower projects.                                           Reduction Scheme (CPRS), which                         be increased by 1% for the next
Europe, too, is moving quickly on new                               includes the implementation of a                       10 years.
climate and energy policy. The EU                                   GHG emissions trading scheme
Emissions Trading Scheme (EU ETS)                                   by January 2010. While the plan
came into force in 2005 and set caps                                includes provisions to give A$3.9
on emissions for over 12,000 sites                                  Billion of free permits to coal-fired
owned by approximately 5,000                                        generators over the first five years
companies. But Brussels has not                                     of the system, Standard and Poor’s
stopped there. In January 2009 – just                               has forecasted that the details of
three days after the inauguration of                                the plan “are likely to influence the
President Obama in the US – the                                     investment decisions and ultimately
European Commission put forward its                                 the credit profile of the Australian
Climate and Energy package, outlining                               utilities sector.”3 At the same time,
its strategy to achieve a 20%                                       the government is under increasing
reduction in GHG emissions below                                    pressure from industry groups to
1990 levels by 2020 and ramp up                                     delay the launch of carbon trading
renewable energy production to make                                 due to the current economic
                                                                    downturn.

3 “Australia’s Carbon Plan Offers Mixed Bag for Local Corporates.” Standard & Poor’s Commentary Report, Jan. 27, 2009.
4 “Global Climate Change Regulation Policy Developments: July 2008-February 2009.” DB Advisors,
  Deutsche Bank Group, Feb. 2009.
5 Ibid.
                                                                                                                                                               07
CDP Electric Utilities Report 2009

With all of these policy developments,     Key Findings                                 31% of Asian companies did so.
there is little doubt that 2009 is                                                      For those companies that reported
shaping up to be a pivotal year for the    • Response Rates – The overall               emissions intensity figures in metric
global electric power sector. This           response rate for electric utilities       tonnes of carbon dioxide-
report offers an in-depth analysis of        has improved, with 53% of utilities        equivalent per Megawatt-hour
the responses of 110 global, publicly-       invited answering the CDP6 (2008)          (CO2-e/MWh), American Electric
traded electric utilities to the CDP6        Questionnaire in comparison to just        Power and TransAlta Corp. are
(2008) Questionnaire. It is the second       44% in 2006. Response rates were           among those with the most carbon
iteration of such a sector-specific CDP      highest for a relatively small sample      emissions-intensive generation,
report; the first was published in 2006.     of companies from Australia/New            while Entergy Corp. and FPL
This report provides details on the          Zealand, while the response rate for       Group have some of the least
level of climate change disclosure           US companies increased markedly,           intensive electricity production,
offered by this critical sector to           from 48% in 2006 to 67% in 2008.           due to their use of nuclear power
investors and other key stakeholders,        Notably lacking were responses             and renewables.
as well as an analysis of the                from three key GHG-emitting              • Generation Fuel Mix – Just under
responding utilities’ emissions              countries: only three Chinese,             half of the CDP6 (2008) electric
intensities, generation fuel mixes and       one Indian and no Russian electric         utility respondents disclosed
investments in emerging technologies         utilities responded to the latest          current capacity and production
and services. While it appears that an       questionnaire. In total, 110 unique        figures by fuel type. This is a critical
increasing number of utilities are           responses were analyzed for                factor for investors to determine the
addressing these issues in their CDP         this report.                               extent to which a utility may be
disclosure, more improvement is            • Carbon Disclosure Leadership               exposed to climate regulations as
needed in key areas, such as reporting       Index (CDLI) – A new CDLI scoring          well as the company’s future
on generating capacity and production        system was introduced for CDP6             competitive positioning – yet,
by fuel type as well as specifics            (2008) to evaluate companies across        disclosure in this area is still
around emissions forecasting and             sectors on the extent and quality of       dramatically lacking. 62% of
reduction planning.                          their climate change disclosure. The       European companies provided
                                             highest scoring electric utilities for     current capacity and production
                                             CDP6 (2008) are Endesa, Iberdrola,         data, but only 14 out of the 110
                                             and AGL Energy with 85, 82 and 81          respondents provided data on
                                             points, respectively, out of 100 total     forecasted capacity and
                                             possible points. These utilities           production.
                                             are providing comprehensive              • Emissions Reduction Planning &
                                             descriptions of company-specific           Investments – Out of the 110
                                             climate change risks and                   unique responses analyzed for this
                                             opportunities as well as their             report, 61% of respondents say
                                             strategies to integrate climate            they are forecasting future GHG
                                             change into core business                  emissions and 59% say they have
                                             strategies.                                an emissions reduction plan in
                                           • Quantitative Emissions Reporting           place – both encouraging signs.
                                             – Out of the 110 electric utility          Forty-eight companies also
                                             responses analyzed for this report,        provided specific details on the
                                             93 companies (or 85%) provided             baseline years and target strength
                                             quantitative GHG emissions data            of their emissions reduction targets.
                                             (either direct Scope 1 or indirect         Finally, numerous companies
                                             Scope 2 emissions) in their CDP6           included disclosure on a range of
                                             responses. Fewer companies                 investment opportunities from
                                             reported on standard metrics of            renewable energy installations and
                                             emissions intensity (emissions             demand side management (DSM)
                                             released per unit of output). 90%          programs to facility upgrades, fuel
                                             of European companies reported             switching and research and
                                             emissions intensity figures, whereas       development of carbon
                                             only 52% of North American and             sequestration and storage (CCS).

08
Contents

Contents
           Executive Summary               6
           1 Introduction                 10
           2 Analysis of CDP6 Electric    13
             Utilities Responses – Sample
             and Response Rates
           3 Carbon Disclosure            17
             Leadership Index –
             Electric Utilities
           4 Quantitative Emissions       20
             Reporting
           5 Generation Fuel Mix Trends   27
           6 Emissions Reduction          38
             Planning and Investments
           7 Conclusion                   49
           8 Appendices                   50
             Appendix I: Scores and       50
             Emissions by Company
             Appendix II: CDP6            57
             CDP6 Questionnaire,
             CDLI Methodology and
             Glossary of Key Terms

                                                    09
1                                       The CDP Questionnaire covers four
                                        major areas:
                                        1 The risks and opportunities that
                                          climate change presents to the
                                          business;
                                        2 Greenhouse gas emissions
                                          accounting;
                                        3 Management’s strategy to reduce
                                          emissions/minimize risk and
                                          capitalize on opportunity; and
                                        4 Corporate governance with regard
                                          to climate change.

Introduction                            The corporate data received in
                                        response to CDP’s annual requests
                                        provides investors with vital information
                                        regarding the current and prospective
                                        impact of climate change on their
The Carbon Disclosure Project is        portfolios, and represents an important
                                        resource for investment decisions. The
the largest investor coalition in the   fact that CDP’s requests are made on
                                        behalf of investors serves to raise the
world. Last year more than              awareness of senior management that
                                        climate change is a business issue that
385 signatory investors, with a         requires serious strategic focus. After
                                        eight years of consecutive growth, CDP
combined asset base of US$57            currently runs projects in more than 20
                                        countries, with new projects launched
Trillion, signed CDP6 (2008) –          in China, Korea, Latin America, the
                                        Netherlands and Spain in 2008.
our sixth annual request for
                                        CDP is pleased to report that it
information – which was sent to         received a record number of company
                                        responses to its 2008 annual request –
over 3,000 companies worldwide.         more than 1,550 in total. This
                                        demonstrates an increased
On February 1st 2009, a further         understanding by the world’s largest
                                        corporations of the importance of
request was sent on behalf of           climate change and its relevance to
475 investors with US$55                business strategy and shareholder
                                        value. And as both signatory investors
Trillion in assets to over 3,700        and corporate responses to CDP have
                                        risen, in most cases the quality of
companies globally.                     responses has also vastly improved in
                                        comparison to previous years.
                                        Since 2007, CDP has also expanded
                                        its work into a number of new
                                        programs. The CDP Supply Chain
                                        project is designed to assist
                                        companies in understanding the
                                        emissions and risks and opportunities
                                        that climate change presents to their
                                        supply chains. For some sectors this is
1. Introduction

larger than the direct operations of the                      None of these stabilization targets
company. This work has also been                              come with any climate guarantees,             World primary energy
applied to public spending through the                        however, and while a consensus
CDP Public Procurement program.                               around the 2°C target is emerging
                                                                                                            demand and related CO2
CDP is also the secretariat for The                           there is ongoing debate among                 emissions are forecast to
Climate Disclosure Standards Board                            scientists and policymakers as to             grow by 45%, to 41
(CDSB) which is developing a globally                         which stabilization target is most            gigatonnes (GT) annually
accepted framework, based on                                  prudent and achievable. Even a 2°C
existing standards, for corporate                             warming would lead to permanent               by 2030, equal to 1.6%
reporting on climate change.                                  ecosystem changes including loss of           growth per year.
                                                              coral reefs, mountain glaciers and
Why Electric Utilities?                                       onset of ice sheet melting which
                                                              produces substantial sea level rise
When negotiators gather in
                                                              over time. Few policymakers seem
Copenhagen, Denmark, at the end of
                                                              willing to consider targets beyond 3°C
2009 to hammer out an agreement to
                                                              of warming that portend far more
extend and expand the terms of a
                                                              serious consequences for the world’s
global agreement to reduce GHG
                                                              coastlines, freshwater and agricultural
emissions, their first-order challenge
                                                              resources.
will be to address a key policy question:
What limits should be set to stabilize                        Yet even the higher 550 ppm target,
atmospheric emissions in order to                             with the greater environmental risks it
mitigate the effects of climate change?                       entails, presents a huge challenge for
                                                              the world’s energy producers and
While the answer is far from simple, it
                                                              electric utilities in particular. According
is clear that the stakes are high.
                                                              to the latest baseline outlook from the
According to the latest analysis from
                                                              International Energy Agency (IEA) that
the Intergovernmental Panel on
                                                              extends through 2030:7
Climate Change:6
                                                              • World primary energy demand and
• The world is on course to double
                                                                related CO2 emissions are forecast
  the concentration of carbon dioxide
                                                                to grow by 45%, to 41 gigatonnes
  equivalent (CO2-e) in the
                                                                (GT) annually by 2030, equal to
  atmosphere to 700 parts per million
                                                                1.6% growth per year. China, India
  (ppm) by the end of this century.
                                                                and the Middle East are expected
• This concentration would lead to an
                                                                to account for three-quarters of this
  eventual average temperature
                                                                increase.
  increase of up to 6 degrees
                                                              • Fossil fuels in 2030 still are
  Centigrade (6°C), or nearly 11
                                                                projected to account for 80% of the
  degrees Fahrenheit, with
                                                                world’s primary energy mix, down
  catastrophic environmental
                                                                only slightly from today.
  consequences for the globe.
                                                              • In this baseline forecast, US$26
• Holding the concentration to 550
                                                                Trillion of cumulative energy-sector
  ppm might reduce the eventual
                                                                investments will be required in
  temperature to a more tolerable
                                                                2007-2030 (in 2007 dollars), with
  3°C increase.
                                                                the power sector accounting for
• A more ambitious goal of holding
                                                                52% (US$13.2 Trillion) of this total.
  the concentration to 450 ppm might
                                                                Slightly over half of the energy
  limit the temperature increase to a
                                                                sector investment will be simply to
  safer level of a 2°C. While a
                                                                maintain fossil energy infrastructure
  challenging target, this is the target
                                                                and current supply capabilities.
  that many scientists, politicians and
  NGOs have said we should not
  exceed in order to avoid potentially
  disastrous feedbacks in the climate
  system.

6 Intergovernmental Panel on Climate Change, Fourth
  Assessment Report, Geneva, 2007.
7 This forecast takes into account national energy policies
  adopted as of mid-2008.
                                                                                                                                          11
CDP Electric Utilities Report 2009

To alter this business-as-usual forecast   The 450 ppm stabilization target would     Electric Utilities and the
in favor of a plan to achieve a 550 ppm    involve even stronger, broader and         Carbon Disclosure Project
stabilization target, the IEA estimates:   quicker policy goals that, if
                                           technologically achievable, “would         For the first time in 2008, the Carbon
• Growth in world primary energy           certainly be unprecedented in scale        Disclosure Project included
  demand would have to be cut to           and speed of deployment,” according        supplementary sector-specific
  32% through 2030, equal to 1.2%          to the IEA. In the 450 ppm scenario:       questions in addition to the standard
  per year.                                                                           CDP Questionnaire to address the
• Energy-related CO2 emissions             • Growth in energy-related CO2             unique challenges facing the electric
  would have to fall to 33 GT annually       emissions follows the same               utilities sector. The Electric Utilities
  by 2030 or 19% less than the               trajectory as in the 550 ppm             supplementary questions to the
  baseline forecast.                         scenario through 2020, but then          Carbon Disclosure Project’s sixth
• The price of CO2 as a tradable             falls much more quickly as               annual Information Request are based
  commodity would reach US$90 per            renewable energy technologies are        on a reporting framework developed
  metric ton.                                deployed on a massive scale.             by the Institutional Investors Group on
• US$1.2 Trillion extra would have to      • By 2030, hydropower, biomass,            Climate Change (IIGCC), Ceres, and
  be invested in power plants, mainly        wind and other renewables would          the Australia/New Zealand Investor
  in industrialized countries as             account for 40% of total generation      Group on Climate Change (IGCC).
  defined by the Organization for            worldwide, almost double the             CDP is very grateful to these
  Economic Cooperation and                   baseline forecast.                       organizations for developing this
  Development (OECD).                      • Energy-related CO2 emissions in          framework. The supplementary
• US$2.9 Trillion extra would have to        OECD countries would be almost           questions seek to address some of the
  be invested in more energy-efficient       40% lower than today, while other        core issues facing the world’s major
  equipment and appliances.                  major economies would limit their        investor-owned electric utilities:
• This added US$4.1 Trillion                 future growth in emissions to 20%.
  investment (equal to 0.24% of            • The price of CO2 would reach             • How much carbon dioxide and
  projected annual world GDP) would          US$180 per metric ton by 2030.             other GHG emissions are utilities
  yield US$7 Trillion in energy savings    • US$3.6 Trillion extra would be             emitting today, and what are their
  over the period.                           invested in power plants, mainly           projections for the future?
• Coal plants with an installed              after 2020.                              • What mix of power plants is
  capacity of 160,000 megawatts            • US$6.6 Trillion extra would be             producing these emissions, and
  (MW) would be equipped with                invested in more energy-efficient          how might these emissions be
  carbon capture and storage (CCS)           equipment and appliances.                  reduced?
  technology by 2030 to make them          • This added US$9.2 Trillion               • To what extent are utilities making
  carbon neutral. (Notably, CCS              investment (equal to 0.55% of              use of non-carbon generating
  capacity is negligible in the baseline     projected annual world GDP) would          sources like wind, solar and nuclear
  forecast.)                                 yield US$5.8 Trillion in energy            power, and how much do they
                                             savings over the period, with higher       intend to increase their use?
                                             electricity costs outpacing the value    • How much do they rely on coal, the
                                             of the energy savings.                     most-carbon intensive fuel, and
                                           • Coal plants with an installed              what efforts are they making toward
                                             capacity of 350,000 MW would be            deployment of carbon capture and
                                             equipped with CCS, more than               storage technologies?
                                             double the amount in the 550 ppm         • What steps are they taking to
                                             scenario.                                  promote more efficient use of
                                                                                        electricity and a “smarter grid” to
                                           If the 450 stabilization target were to      support more renewable energy
                                           be achieved, global energy-related           development and demand-control
                                           CO2 emissions would be held to 25.7          programs?
                                           GT annually by 2030; that is less than     • Are they assuming a price for
                                           projected now for just developing            carbon dioxide emissions in their
                                           (non-OECD) countries in 2030. This           planning forecasts?
                                           means industrialized (OECD) countries
                                           could not bring about this global target   The following sections provide a
                                           on their own, even if their emissions      summary of the CDP6 (2008) Utility
                                           were to fall to zero. It also means that   Sector Supplement findings.
                                           developing countries must play an
                                           active role as their emissions start to
                                           catch up to those of OECD nations,
                                           even if they never match them on a
                                           per-capita basis, even after 2030.
12
2                    Overview
                     The Carbon Disclosure Project invited
                     the 249 largest publicly traded Electric
                     Utilities globally by market
                     capitalization in 2008 to respond to
                     the CDP6 (2008) Questionnaire along
                     with the Electric Utilities
                     supplementary questions. RiskMetrics
                     Group was commissioned by CDP
                     and California State Teachers’
                     Retirement System (CalSTRS) to
                     analyze the company responses. The
                     overall response rate for electric
                     utilities improved from previous years,
                     with 53% of utilities invited answering

Analysis of CDP6     the CDP6 (2008) Questionnaire in
                     comparison to 44% in 2006. In
                     addition, 23 utilities that did not

Electric Utilities   answer the CDP5 (2007) Questionnaire
                     were new respondents in 2008. A
                     further 6% of utilities provided some

Responses –          information. However, 35% of
                     contacted utilities did not respond to
                     the questionnaire and another 5%

Sample and
                     formally declined to participate.
                     In total, 110 unique responses were
                     analyzed for this report due to parent/

Response Rates       subsidiary relationships among some
                     respondents. Of these 110 responses,
                     15 companies elected not to make
                     their responses publicly available.

                     Fig. 1: Electric Utilities 250
                             CDP6 Response Status

                                  6%   54%
                            5%

                            35%

                       Answered Questionnaire
                       Information Provided
                       Declined to Participate
                       No Response

                                                           13
CDP Electric Utilities Report 2009

Key Trends from                           Fig. 2: CDP6 Response by sample*                                              CDP5 Response by sample**
CDP Global Samples
                                          Australia 200 (201***) 48% Answered Questionnaire                             Aust/NZ 150 (141) 50% Answered Questionnaire
This sixth iteration of the CDP
Questionnaire sought greater overall                     96                   7 28                     70                              70                      6        20                45
coverage than in previous years, with     Asia 80 (80) 35% Answered Questionnaire                                       Asia 80 (77) 19% Answered Questionnaire
information being requested from                   28              2              32                        18              15         4                       44                               14
more than 3,000 companies                 Brazil 75 (72) 83% Answered Questionnaire                                     Brazil 60 (57) 82% Answered Questionnaire
worldwide. In 2008, CDP expanded to                                     60                                   11 1                                    47                                   2 7            1
cover 21 geographical areas (up from                                                                                    Canada 200 (194) 47% Answered Questionnaire
                                          Canada 200 (187) 55% Answered Questionnaire
16 in 2007) and two sector samples
                                                         103                      7       30                47                         91                  2                58                 43
(Electric Utilities and Transport). The
corporations’ responses and reports       Electric Utility 250 (250) 52% Answered Questionnaire                         Electric Utility (240) 47% Answered Questionnaire
analyzing findings from these samples                    133                   1613                    87                           113                    16 16                       95
will be posted on the CDP website as      France 120 (120) 63% Answered Questionnaire                                   France 120 (120) 56% Answered Questionnaire
they are launched worldwide. (See                             76                          10 6             28                              67                          3 10               40
www.cdproject.net for further details.)   FTSE 100 (100) 90% Answered Questionnaire                                     FTSE 100 (100) 91% Answered Questionnaire

Response rates across the vast                                           90                                     13 6                                      91                                    12 6
majority of samples are above 50%,        FTSE 250 (250) 58% Answered Questionnaire                                     FTSE 250 (250) 59% Answered Questionnaire
with an average response rate of 55%.                     144                          26        37             43                         148                              18    37            47
The FTSE 100 had the highest              Germany 200 (200) 55% Answered Questionnaire                                  Germany 200 (200) 52% Answered Questionnaire
response rate with 90 companies                          109                      4 18                 69                              104                         7        35              54
(90%) responding. By comparison, the      Global 500 (500) 77% Answered Questionnaire                                   Global FT500 (500) 77% Answered Questionnaire
Electric Utilities 250 sample response
                                                                   383                               1127 79                                     383                                 16 39       62
rate of 53% is slightly below the
                                          India 200 (200)19% Answered Questionnaire                                     India 110 (110) 35% Answered Questionnaire
average, ranking 11th out of the
combined 23 geographic and sector             39    15                                155                                        38              2                           70
samples. The Electric Utilities’          Italy 40 (39) 46% Answered Questionnaire                                      Italy 40 (40) 45% Answered Questionnaire
response rate is also slightly below                    18                    4                      17                               18                  11                      20
that of the Transport sector, although    Japan 150 (152) 72% Answered Questionnaire                                    Japan 150 (151) 74% Answered Questionnaire
in that case only 100 companies were                              110                            14         37                                   112                                 34        32
surveyed.
                                          Nordic 190 (188) 58% Answered Questionnaire                                   Nordic 125 (125) 68% Answered Questionnaire
Responses to the CDP6 (2008)                              109                         3       40             36                                 86                               6        21         12
Questionnaire have been classified in     South Africa 100 (98) 58% Answered Questionnaire                              South Africa 40 (38) 68% Answered Questionnaire
the same way as in past years:                                58                            18              28                                  26                               1 3            8
Answered Questionnaire (AQ),              Switzerland 100 (96) 57% Answered Questionnaire                               Switzerland 50 (50) 78% Answered Questionnaire
Provided Information (IN), Declined to                    54                                23              19                                       39                                   5          6
Participate (DP) and No Response
                                          S&P USA 500 (500) 64% Answered Questionnaire                                  S&P USA 500 (500) 56% Answered Questionnaire
(NR).
                                                              321                         22 64              93                            282                         25 76                   117
                                          Transport 100 (100) 58% Answered Questionnaire                                Transport 100 (100) 47% Answered Questionnaire
                                                             58                       44               34                              47                      8        12                33
                                          China 100 (100) 5% Answered Questionnaire
                                          5    18             17                              60                        0         20              40                   60            80          100%

                                          Korea 50 (50) 32% Answered Questionnaire
                                                   16                              27                            7      Sample (number of companies)
                                          Latin America 40 (38) 52% Answered Questionnaire                                  Answered Questionnaire
                                                         20                   11                     16                     Provided Information
                                          Netherlands 50 (50) 52% Answered Questionnaire                                    Declined to Participate
                                                         26                       3       8                13               No Response
                                                                                                                        *   Response rates calculated at 31 July 2008; numbers may
                                          New Zealand 50**** (50) 50% Answered Questionnaire                                differ from local report that calculated response rates before
                                                         25                   2 3                     20                    or after this date.
                                                                                                                        ** Response rate as published in CDP5 Report.
                                          Spain 35 (35) 71% Answered Questionnaire
                                                                                                                        *** The first listing is the official sample name, the number in
                                                                   25                            1          9               brackets is the actual number of companies that were
                                                                                                                            included in CDP6 for that sample.
                                                                                                                        **** New Zealand is included as an individual sample for the first
                                          0         20              40             60                 80         100%        time, having previously been combined with Australia.

14
2. Analysis of CDP6 Electric Utilities Responses

Historical Overview                         Meanwhile, the response rate of Asian
                                                                                          Fig. 3: Electric Utilities
                                            utilities was only 31%. This is partly
The response rate for the Electric          attributable to the increase in the                   Response Rate
Utilities 250 sample has been steadily      Asian questionnaire sample from 53
improving since its introduction in         companies in 2007 to 74 in 2008;                                            100
2006. This is despite the fact that 36      smaller companies that are less

                                                                                          Percentage of companies
companies, or 14% of the sample,            familiar with the CDP tend to be less                                       80

were invited for the first time in 2008.    likely to respond. As in 2007, all
Companies that have not been invited                                                                                    60                                          53.4%
                                            Japanese utilities receiving the                                                        43.9%
                                                                                                                                                   47.5%
in the past are less familiar with the      questionnaire again responded in                                            40
CDP process and may be under less           2008. Japanese utilities are
pressure from investors to report on        increasingly coming under pressure to                                       20
climate change risks. Countries that        deliver on the country’s emissions
were added to the CDP6 (2008)               reduction targets under the Kyoto                                            0
Questionnaire sample but not                Protocol. In October 2008, Japan                                                       CDP4             CDP5            CDP6

represented in the CDP5 (2007)              launched a voluntary emissions
Questionnaire include Argentina,            trading scheme in which companies
Colombia, Bosnia-Herzegovina,               can set their own caps. Japanese              Fig. 4: Response Rates by Region
Turkey, Vietnam and the United Arab         electric utilities have pledged to
Emirates. The Russian questionnaire         reduce the carbon intensity of                                                            Number of compnies surveyed
sample was also significantly               electricity production by 20% below                                               33        60         74         77        5
increased from four to 19 companies         1990 levels by 2012.                          100
for CDP6 (2008), though none                                                                                                  6%          5%      5%         5%
responded.                                  Elsewhere in Asia, only three of 11                                                                             16%       20%
                                            Chinese utilities invited, and one of 11                  80                      24%
                                                                                                                                       37%
In addition, 23 companies that did not      Indian utilities, responded to CDP6                                                                             14%
respond to the CDP5 (2007)                                                                                                    6%                  61%
                                            (2008). While these countries have                        60
Questionnaire or only provided some         rapidly growing GHG emissions and
information responded to the CDP6           are at the forefront of negotiations                      40                                                              80%
(2008) Questionnaire. New companies         between developed and developing                                                  64%                 3%        65%
responding to CDP for the first time        countries leading up to the December                                                       58%
came from Colombia and Japan,                                                                         20
                                            2009 COP-15 talks in Copenhagen,                                                                      31%
demonstrating the growing recognition       electric utilities in Asia still lag behind
of CDP around the world.                    in critical disclosure of GHG emissions                                 0
                                                                                                                           South       Europe     Asia      US/      Australia
                                            and reduction strategies. However, a                                          America                          Canada      /NZ
Geographic Trends                           few Asian utilities are setting
In terms of geographic trends,              disclosure best practice standards,                                           Declined to Participate
Australia/New Zealand had the highest       including Hong Kong-based CLP                                                 No Response
response rate, at 80%; however, this        Holdings, which received one of the                                           Provided Information
is based on the smallest survey             highest Carbon Disclosure Leadership                                          Answered Questionnaire
universe of only five utilities. The        Index scores for the sector.
United States/Canada, South America         Interestingly, utilities in Annex 1
and Europe followed closely, with           countries saw a decrease in
response rates of 65%, 64% and              responses for 2008, when compared
58%, respectively. The increasing           to response rates for CDP4, when the
likelihood of federal climate legislation   last Electric Utilities supplement report
in the United States makes it not           was written. (Annex 1 countries have
surprising that the response rate for       ratified the Kyoto Protocol and
US utilities increased from 48% in          adopted emissions reduction targets.)
2006 to 67% in 2008. More surprising        Utilities located in these countries had
is that a greater percentage of             a 59% response rate in 2006, but only
European utilities did not respond,         a 54% response rate in 2008.
especially given that many are already      However, this minor shift is mainly due
required under the EU ETS to report         to additional Russian utilities included
their GHG emissions.                        in the 2008 questionnaire sample that
                                            provided no response. (None of the 19
                                            Russian utilities invited responded to
                                            the CDP6 (2008) Questionnaire.

                                                                                                                                                                            15
CDP Electric Utilities Report 2009

However, this may be due to the              The large questionnaire sample of 77        The analyzed response sample also
restructuring through 2007 and 2008          North American utilities and high           includes eight Brazilian electric utilities
of the state-owned Unified Energy            response rate from US/Canada means          and one Colombian company.
System of Russia [RAO UES] – which           that 44% of all analyzed responses          Accordingly, the South American
responded to CDP in 2005 – to create         come from this geographic region.           sample is focused mainly on Brazil.
several smaller state-owned and              This concentration should be kept in        While there were 21 South American
private electric utilities.) Within the      mind when comparing trends in               utilities that technically answered the
Annex 1 sample, disclosure remains           quantitative emissions reporting, fuel      CDP Questionnaire, several from Peru,
high across Europe and Japan, with all       mix forecasts and emissions reduction       Venezuela, Chile and Argentina
electric utilities invited from the United   planning. However, when responses           referenced parent company
Kingdom and Japan responding to the          are analyzed according to United            responses, such as from Endesa and
CDP6 (2008) Questionnaire.                   Nations Framework Convention on             Suez. For analysis of responses
                                             Climate Change (UNFCCC) status              throughout this report, only parent
Also of note is the increase in the US       (i.e., whether a country has ratified the   companies are considered.
response rate. For CDP4, American            Kyoto Protocol and whether or not it
and Australian utilities were combined       has accepted emissions reduction
into an “Annex 1 Not Ratified” group,        targets), the focus shifts to Annex 1
with a 48% response rate. (Australia         utility respondents that make up 46%
has since ratified the Kyoto Protocol.)      of the questionnaire sample. This
Separating out the US utilities for          represents the key pool of countries
CDP6 (2008) has resulted in a 67%            with existing emissions reduction
response rate. Several US utilities that     targets that are expected to set
did not respond or only provided             increasingly stringent targets for their
some information to the CDP5 (2007)          electric utilities. Unfortunately, the
Questionnaire were new respondents           complete lack of participation among
for CDP6 (2008). These include               Russian utilities holds down the Annex
Ameren Corporation, CH Energy                1 response rate. Despite Russia’s
Group, Dominion Resources,                   ratification of the Kyoto Protocol in
Dynegy, Idacorp, OGE Energy                  2004 that brought the treaty into force,
Corporation and Pepco Holdings.              there is still much progress to be
These companies are likely                   made in Russia and in other critical
responding to growing US investor            Annex 1 countries to increase their
pressure for climate disclosure. All of      response rates.
these companies except CH Energy
and Pepco have received shareholder
proposals requesting information
about their GHG reduction plans.

Fig. 5: Response Rates                       Fig. 6: Region of Analyzed                  Fig. 7: UNFCCC Status of Analyzed
        by UNFCCC Status                             Responses                                   Responses

100
                                                        8%    44%
                                                   4%                                          38%           16%
 80

 60                                  67.2%

       53.8%
 40
                      41.8%
                                                26%
 20

                                                        18%                                            46%
  0

      Annex 1                                  US/Canada                                   Non-Annex 1
      Non-Annex 1                              Asia                                        Annex 1
      US                                       Europe                                      United States
                                               Australia/New Zealand
                                               South America

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3                                     As institutional investors look to
                                      companies for disclosure on climate
                                      change that will help inform
                                      investment decisions, a growing
                                      number of companies are following
                                      best practice by providing
                                      comprehensive high-quality responses
                                      to the CDP Questionnaire. These
                                      companies are using the CDP
                                      reporting process to publicly identify
                                      climate change risks and
                                      opportunities, describe climate
                                      change strategies, and offer
                                      quantitative data to help investors
                                      assess the potential financial impact

Carbon Disclosure                     of climate risks.
                                      The CDLI scoring system is designed
                                      to highlight companies taking the lead

Leadership Index                      on climate change disclosure. This
                                      scoring system has been applied to
                                      respondents in the Electric Utilities

– Electric Utilities                  250 to identify 12 leading CDP6 (2008)
                                      respondents who demonstrate effort,
                                      thought, clarity and detail in their
                                      public CDP responses. Any CDP6
                                      (2008) company response that is “not
The Carbon Disclosure Leadership      public” is not eligible for inclusion in
                                      the CDLI because, by definition, that
Index (CDLI) highlights the leading   company is not demonstrating
                                      disclosure best practice.
CDP6 (2008) respondents. The          It should be noted that while the CDLI
CDLI scoring system has been          score is a good indicator of how well a
                                      company has responded to the CDP6
applied to the electric utilities     (2008) Questionnaire, it does not fully
                                      reflect company performance in
sector to identify companies          climate change management, nor
                                      does it account for absolute
providing public, high-quality        emissions, reduction achievements,
                                      carbon intensity or governance
disclosure through the CDP            practices in awarding the rating. In
                                      general, a high score can be achieved
Questionnaire.                        by following the guidance issued by
                                      CDP and providing a comprehensive
                                      description of activities. A company
                                      without a climate change strategy and
                                      associated measurement systems and
                                      targets will not score highly. The best
                                      responses are both company-specific
                                      and detailed.

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