February 6, 2006

Conference Board reports emissions survey results, launches carbon disclosure project

The results of a survey by the Conference Board of Canada suggests that a majority of Canadian companies are taking action to reduce carbon emissions not only to protect the environment, but to gain economic advantages. The survey polled 60 medium-sized and large electricity generation, mining and manufacturing companies on issues related to the implementation of the Kyoto Accord and the federal regulations governing greenhouse gases from Large Final Emitters (LFEs).

The survey report, Carbon Management Strategies of Canadian Industrial Emitters: Competing in a Carbon-constrained World, presents a number of key findings, among them:

*84% of respondents feel their companies moderately or strongly understand how a carbon-constrained future will affect them;

*63% have assessed how emissions regulations might affect their financial positions;

*83% indicate that they will meet their compliance obligations by maximizing energy efficiency, investing in new technologies or purchasing emissions reduction credits; and

*72% of respondents say their boards of directors have a high level of understanding of carbon-related business risks and opportunities.

"Companies need to come to grips with the challenge and risks of climate change, and the substantial costs and benefits of reducing carbon emissions," said report author David Greenall. "Successful companies will reap benefits such as reduced costs, enhanced productivity and higher profits. Those that cannot reduce emissions economically will put shareholder value and long-term competitiveness at risk," he added.

"One of the biggest challenges to managing carbon emissions is uncertainty about regulatory and policy issues. Companies are looking for clarity and certainty about what their emissions constraint will be, how a domestic emissions trading market will function, and what the post-2012 climate change policy framework will look like," Greenall continued.

The survey results also suggest several areas for corporate attention. Chief financial officers in particular, says the report, need to be involved in carbon management strategies, given their responsibility for assessing and managing material financial risks. As well, securities filings should provide better information to help investors make sound investment decisions that incorporate environmental factors such as carbon emissions.

The release of the 27-page survey report coincided with the Conference Board's official launch of the Carbon Disclosure Project (CDP) Canada initiative. To promote enhanced corporate disclosure on climate change, the Conference Board is collaborating with the Carbon Disclosure Project to survey Canada's 300 leading companies by market capitalization.

Backed by a coalition of 211 institutional investors with assets of $31 trillion (U.S.) under management, the CDP Canada initiative is seeking disclosure of investment-relevant information on these companies' greenhouse gas emissions. Lead sponsors for the CDP Canada initiative are Deloitte & Touche, Catalyst Paper, Epcor Utilities, Bell Canada, Golder EcoFys Solutions and National Public Relations. Innovest Strategic Value Advisors is also a partner with the Conference Board of Canada on this project.

The Carbon Disclosure Project (CDP) provides a secretariat for the world's largest institutional investor collaboration on the business implications of climate change. It allows a large international group of institutional investors to collectively sign a single global request for disclosure of information on greenhouse gas emissions. Three previous requests were sent to the world's 500 largest corporations by market capitalization, the FT500.

On February 1, the fourth information request (CDP4) was sent on behalf of the 211 institutional investors to the heads of more than 1,900 companies. In addition to the FT500, the sample includes the largest companies, based on market capitalization, in the U.S., Europe, Japan, Australia and Asian, as well as Canada. A worldwide group of leading electrical utilities is also part of the sample.

Corporations that previously provided responses are invited to report progress. Companies that previously did not respond are requested to do so, or to provide a reason why they do not believe the request is relevant to their business. The CDP4 responses will be available from September 2006.

More information, including more than 800 corporate responses from previous CDP requests, is available on the CDP Web site, www.cdproject.net.

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