China's listed companies are becoming more aware of climate change and the risks and opportunities it presents to their businesses, according to the Carbon Disclosure Project (CDP) China Report 2009, which was released on Wednesday.

The Carbon Disclosure Project, launched in Britain in 2000, and representing over 475 institutional investors, is the first ever independent global standardized mechanism for companies to report their greenhouse gas emissions and assessment of climate risk.

The CDP China Report 2009, the second of its kind – the first report was published in 2008 - on the current understanding and strategies of Chinese listed companies regarding climate change, surveyed the 100 largest Chinese companies based on market capitalization.

Eleven companies answered the questionnaire this year, twice as many as last year and another eighteen companies provided information. Overall the quality of the information improved, indicating that listed companies are becoming more concerned about climate change and are implementing low carbon strategies, the report concluded.

Compared with the 82 percent response rate to the survey for CDP's global 500 report, however, the response rate from China's listed companies was rather low.

Most respondents said climate change meant both regulatory and physical risks. Eight respondents pointed to regulatory opportunities, such as carbon trading and developing financial products related to climate change. Four respondents mentioned other opportunities, such as environmentally-friendly products or credit services that can help build an image of a "green company" in the eyes of consumers.

With regard to energy saving and emissions reduction, an increasing number of companies have begun to look on such measures as more than a mere response to policy pressure or administrative tasks. They are beginning to integrate these activities into their business operations and obtain economic returns through technical and managerial innovation, the report concludes.

However, most Chinese listed companies lack effective data collection systems.

Only five respondents disclosed the processes and methodologies used to collect greenhouse gas data. Just seven respondents reported that they had formulated carbon-reduction plans and five said they had set reduction targets.

"Few companies have explicit reduction plans and set targets. Carbon data collection and management is one of the key challenges for China's journey to a low carbon economy," the report pointed out.

The report also found that industry sectors varied in their response to the CDP questionnaire.

Telecommunications, information technology and the financial sector show the highest rate of participation, followed by gas and oil, construction and materials. The lowest response rate was from the food and beverage sector.

"As more regulatory measures are put in place, investors need to be informed of carbon information of listed companies they are interested in to get a better idea of those companies' credibility and the impact climate change may have on their profitability," said Joanna Lee, CDP spokeswoman, at the China Report launching ceremony.

"CDP provides an approach for Chinese companies to cope with climate change and, with its huge global carbon disclosure database, it also offers a valuable reference for Chinese investors' overseas stock investment," said Guo Peiyuan, General Manager of Syntao, a consulting company that focuses on promoting corporate social responsibility and socially responsible investment in China, and was also involved in drawing up the 2008 and 2009 CDP China reports.