When Superstorm Sandy hit the U.S. last year, causing some $65 billion in damage, it also hit companies' pocketbooks. Johnson & Johnson lost a week's worth of employee productivity due to the storm, and Abercrombie & Fitch estimates it lost out on $10.7 million in store and direct sales. Instead of just accepting losses like that as something that happens, these and other companies are taking a proactive look at climate change and the risks -- as well as opportunities -- posed by climate-related weather disruptions, regulations and consumer changes.  Further, companies that have made the environment and sustainability central to their businesses strategies are seeing higher profits while also better positioning themselves for an uncertain future, says the CDP S&P 500 Climate Change Report, the latest update on greenhouse gas emissions and climate strategies from the biggest corporations in the U.S. which was officially released tonight on the floor of the New York Stock Exchange.

The report, developed in conjunction with consultancy PwC, is based on CDP's annual survey of listed companies, which saw requests for information on carbon emissions sent to the S&P 500 companies on behalf of the 722 institutional investors representing $87 trillion in invested capital working with CDP. Responses were provided by around two thirds (334) of companies in the S&P 500, offering information on their emissions, the carbon footprint of their supply chain, and their strategies for tackling climate change risks. While the number of respondents this year remained static, the number of companies considered leaders in disclosure more than doubled. Last year, only 11 companies qualified by having a score in the top 10% and publishing their results publicly, but this rose to 25 this year, demonstrating the growing importance for companies to include climate change risks and opportunities in their overall business strategy.

Continuing with increasing trends, more companies this year recognized risks and opportunities posed by climate change. Seventy-seven percent noted risks (compared to 61% in 2012), and 78% listed opportunities (versus 59% in 2012). The biggest risks noted are precipitation changes and droughts, tropical cyclones and reputation. The notable potential impacts from those are higher operating costs and reduced demand for products and services. The largest opportunities, meanwhile, lie in consumer behavior changes, reputation, and product efficiency regulations and standards, which all hold potential higher demands for both existing and new goods and services.

In particularly, CDP notes that the most forward looking and acting leaders are:

• Managing climate change risks and opportunities by moving beyond setting targets and making investments to reduce emissions. Rather, preparedness, adaptability, and operational speed—all of them characteristics of a resilient organization—mark the adaptation of business models designed to gain competitive advantage and to protect infrastructure, customers, and supply chains.
• Recognizing climate change as an integral strategic business variable and many are now expanding the boundaries of their spheres of climate change influence by engaging workforces, suppliers, consumers, governments, and communities. They are mining data at all points of influence in their value chains. In doing so, they not only enable innovative solutions for further reductions, but also leverage the opportunity to strengthen relationships with stakeholders, streamline processes, reduce costs, and redefine strategic advantage.

A separate CDP report also published today, in conjunction with Sustainable Insight Capital Management, finds those companies investing in emissions reduction and energy saving measures are starting to outperform their less progressive peers. The analysis looked at the CDP disclosure scores of 702 companies covered in CDP's Global 500 climate change reports from 2008 to 2012. Using peer to peer comparisons, companies were ranked by industry and split into quintiles by their CDP disclosure score, then examined against various metrics of financial profitability. The analysis shows that industry leaders in the top fifth based on their relative CDP scores provide a higher return on equity (+5.2 percent), more stable cash flow generation (+18.1 percent) and higher dividend growth (+1.6 percent).