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February 23, 2018

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Companies are reducing investments in emission-reduction programs

According to research conducted by CDP and Accenture, companies are becoming more cautious about investing in emission-reduction and supply chain sustainability programs.

Corporate investments in emissions-reduction programs declined over the past year even though more companies are reporting their efforts to reduce greenhouse gases. According to Collaborative Action on Climate Risk, a report issued by CDP (formerly the Carbon Disclosure Project) and the consulting firm Accenture, the average sum of money invested in such programs has dropped by 22 percent since last year. The research was based on information provided by 2,868 companies.

The research also found that when companies do invest, they seek a shorter payback period. Given the pullback in investment, the report said, the average monetary savings from emissions-reduction efforts has dropped 44 percent in the last 12 months.

Moreover, companies are becoming more cautious about investing in emission-reduction and supply chain sustainability programs because of regulatory uncertainty. Indeed, 90 percent of the companies that said climate change represented a current or future risk to their business cited regulatory risk as barrier to further investment in such programs.

When companies were asked about which programs would get their support, 81 percent said they would back policies promoting energy efficiency and clean energy generation. Only 67 percent supported mandatory reporting of carbon emissions, while just 43 percent backed so-called "cap and trade" schemes that would allow corporations to sell unused carbon-emissions allowances.

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