Sue Howells

Sue Howells

25 February, 2015
Measuring carbon
Head of Global Operations, Carbon Disclosure Project
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Over 3,000 organizations in 60 countries around the world are currently measuring and disclosing their greenhouse gas emissions, water management and climate change strategies through the Carbon Disclosure Project (CDP).  Acting on behalf of 551 institutional investors, holding US$71 trillion in assets under management, the organization collects data which is then made available for a wide range of audience from investors and corporations to academics and the public.  We talk to Sue Howells, CoChief Operating Officer of CDP, about how it all works.
 
Ecozine: Would you please share about your background and your role at CDP?
 
Sue: I spent the first 20 years of my career in the Asset Management division of Rothschild, a private bank. Eventually I decided to do a masters degree in responsibility and business practice.  The CEO of CDP, who was in the same program program, invited me to join CDP. 
It seemed like a great opportunity, with my background in investment and the ability to work on the most depressing issue of our generation - climate change.  I wanted to do something worthwhile using the skills I had developed in the first half of my career, so I started my position at CDP in 2005.  
At the time, we were writing to the largest 500 companies in the world, and there were organizations in different countries, such as Canada, Australia, and Brazil, who approached us to see if we could partner by using the CDP questionnaire in countries that go beyond the 500 biggest companies.  We started to establish partnerships with organizations in different countries and we set up our own office.   
Globalization is a key priority for the CDP, and we’ve already got our footprint in many countries, and now it is time to increase our anchorage in these countries by getting as many companies as we can to respond.  We’ve also set up a supply chain program, a water disclosure program, and a cities program.  We’ve opened up several offices across Asia, including Australia, China, and India, to build on the foundations we’ve laid in the past five to six years.
 
Ecozine: What are some of the ways to increase company participation in the CDP?
 
Sue: Investors need to be more vocal, so whenever they meet companies, they can talk about the CDP.  We’ve also worked with business associations a lot.  Often, companies are looking for guidance in certain countries.  For example, companies can get guidance in India from the Confederation of Industries, which is the largest industry body there.  We’ve done training workshops there and they’ve worked with us as our partner in India for the past few years.  
We want the CDP questionnaire to be a tool for companies.  For instance, Walmart, which didn’t respond for three years, decided to respond in the fourth year, and they learned something about their organization from the questionnaire.  They were able to pinpoint where the majority of their emissions were coming from - which were from refrigerants, but they had thought that it was from their truck fleet.  They were able to target emissions and had a plan in place to reduce emissions from refrigerants, and that saved them millions of dollars.  The questionnaire was also sent to their suppliers, and that started the work on their supply chain program. 
In the first stage, it is getting the companies to start the conversation within, but companies often think they should only participate if they can respond and respond well.  We always encourage companies to start the process - that's the most important thing - but they sometimes think that participation would damage them if their responses are not up to high standards. 
In countries with regulation, such as Korea, there has been a good response rate.  Engagement also requires the leadership of companies.  If senior members of the board understand the issues for the future and prosperity of the company, leadership can be driven from the top.  In Asia, often times what happens is that when the questionnaire goes up to the senior levels, it stops.  Engagement is very much about encouraging investors, and getting them to work with companies in their portfolio.  For us, it is a lot of hard work, and comes down to finding contacts in companies, and working with the company through these people.
 
Ecozine: So Walmart actually helped to create the supply chain program at CDP?
 
Sue: Yes, we piloted the program with Walmart in 2007 and in 2008, we invited any company in the CDP to join it.  We’re very thankful for their participation and Walmart has even developed its own sustainability scorecard, with the CDP being a key element in it.
 
Ecozine: When reaching out to a company for the CDP questionnaire, who is usually the contact point?
 
Sue: It is difficult to say, but it is usually the investor relations or sustainability department.  We usually send a paper document to the top person in charge of governance issues and a soft copy of the questionnaire to the contact point at the company.  It takes a lot of research and we’ve been training participants on webinar.  We’ve paid a lot of focus on non-respondents and new companies to help them with the online system.  Before the online system, we just worked with Word and PDFs!  Now, we use a comprehensive online system which gives guidance on each stage. 
We want companies to respond well and let them know what we are really looking for.  We’ve been very transparent about how we generate scores.  Because of the questionnaire, we’ve got voluntary respondents in some countries who have not been written to by CDP.  
 
Ecozine: Are there specific countries in Asia that are leading when comes to regulations on carbon disclosure?
 
Sue: In Asia, Japan and Korea have sector specific regulations.  For Europe, there is a strong response rate with the EU-ETS trading scheme, which is more material to investors.  Investors are more engaged in asking companies what they’re doing.  We’re working with investors, companies, and governments by offering expertise to develop mandatory reporting schemes in the US, UK, and other countries.
 
Ecozine: Does the CDP work with other similar certification bodies?
 
Sue: We have a good relationship with the GRI.  Whereas we mainly focus on water and carbon, the GRI is more broadly based, and we always want to collaborate with other initiatives.
 
Ecozine: How does the CDP work with small and medium enterprises?
 
Sue: Supply chain is really important in Asia.  The majority of our supply chain members tend to be Western companies, mostly in Europe and the US, but we want to engage more Asian companies to be members of the CDP by selecting the group of suppliers they want to work with.  CDP provides platform, but companies won’t always accept the questionnaire, unless they commit to engaging with suppliers.  We’ve seen great improvements in the relationships between customers and suppliers through the CDP.  
For our investor program, we are writing to listed companies on exchanges, focusing on the largest companies first but supply chains allow companies to come in at a much smaller level.  In China, customers are asking for more information from companies, which sends a very powerful message to the companies.  As we want to be practical, we’ve gone to the big companies first, but we definitely want to work with the whole value chain.
 
Ecozine: How does the CDP questionnaire change from year to year?
 
Sue: We try to minimize changes in the questionnaire, to be able to have comparative data year to year.  Sometimes it's simply a matter of rephrasing questions.  When we analyze responses and see that for certain questions, nobody answers, or the answers are unclear, then we will improve the wording to get closer to the information we really need.
 
Ecozine: How is qualitative and quantitative data balanced in the CDP questionnaire?
 
Sue: The quantitative tends to be very detailed, but the real value companies get is from the qualitative information when they can learn about a company’s strategy.  Quantitative data is a vital element of the report, but the CDP aims to give a broader picture - and reading responses, the gold dust is in the qualitative information.
Both have value; we want to make sure that people, whether it be the companies themselves, investors, NGOs or governments, are able to use the CDP data.  
 
To find out more about the Carbon Disclosure Project, visit: CDP.net

By: Ecozine Staff
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