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EIRIS

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EIRIS

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  1. The role of Consumers and Corporates in tackling Climate Change~How do companies and consumers interact on the issue of climate change?~Stephen Hine, 15 June 2009

  2. EIRIS • Experts in Responsible Investment Solutions • Over 25 years experience (founded 1983) • Leading global provider of ESG research • Non-profit organisation & independent • Global coverage (3,000 companies) - FTSE All-World Developed, MSCI • EPM software • 100 clients including pension funds and institutional investors

  3. Factors in consumer engagement • Regulations & Standards • Communication and engagement – Company-led initiatives and consumer-led initiatives (3)Labelling Schemes – energy efficiency, eco-labels and climate change labels (4)Independent assurance and verification – for increasing transparency, credibility and recovering consumer trust (5)Product innovation and marketing strategies – for attracting consumers

  4. Key findings: Consumer trends • Only a minority of consumers are prepared to pay a premium for products with lower carbon emission impact. • Financial incentives (reduced tax, discounted insurance and cost saving) are the strongest drivers • A wide range of comparison tools are available for consumers, however, assurance or verification systems are not yet sufficiently developed.

  5. Key findings: Company responses Consumer-facing sectors: Supermarkets (27 companies), automobile manufacturers (31), residential building (24) and electricity sector (68) listed in the FTSE All World Developed Index

  6. Key findings: Company responses cont. • Electricity companies: leaders among the four sectors, strong performance on disclosure • A large proportion of supermarkets and residential building companies: not yet started public reporting • The residential building sector lags behind significantly with many companies without a basic commitment to address climate risks.

  7. Sector findings: Supermarkets • A wide range of carbon labelling schemes • However, a need for a more internationally consistent system for greater comparability and transparency • Consumer groups are becoming more active • This has yet to be translated in consumer purchasing decisions • More proactive consumer involvement in influencing companies is required

  8. Sector findings: Automobile • A limited level of consumer groups’ involvement – stakeholder engagement is a key area for improvement • Governments have a key role to play in setting ambitious targets for reducing carbon footprint • Fuel efficiency targets VS carbon tax? • Support for developing alternative technology and infrastructure

  9. Sector findings: Residential buildings • The complexity of efficiency rating systems seems to be a source of confusion to consumers • Priority should be given to the simplification of rating systems and providing the right incentives • There is ample room for companies to improve overall commitment and disclosure levels

  10. Sector findings: Electricity • A high level of commitment by governments, companies and consumer groups • However, there is an urgent need to establish a clear definition of ‘green electricity’ which should be internationally consistent and comparable

  11. Sector findings: Electricity cont. Commitment by electricity companies Climate change overall response

  12. Opportunities for further development • Government: provision of a clear framework to support consumer action on climate change by establishing targets, incentives and transparent regulations and standards and consider internationally consistent and comparable rating/ labelling standards • Companies: Direct engagement with consumers and public reporting including product emissions data • Consumer groups: Provision of unbiased information and influencing companies by campaigning and engaging with them

  13. Contact details Stephen Hine Head of Responsible Investment Development  +44 (0) 20 7840 5716 (direct)        EIRIS, 80 - 84 Bondway, London, SW8 1SF www.eiris.org