$31 Trillion Investor Group Urges High Impact Risk Companies to Report Climate, Forest, Water Data
Nearly 1,500 companies with a high environmental impact will be targeted by an engagement campaign by investors representing over $31 trillion in assets urging them to disclose their impact on climate change, forests and water security.
The campaign is being coordinated by climate research provider and environmental disclosure platform CDP. CDP runs a global environmental disclosure system, enabling investors and other stakeholders to measure and track organization’s performance in key environmental sustainability areas including climate change, deforestation, and water security. The platform provides annual scores for companies on each of the key categories, and the data is also used by information services providers such as Bloomberg, STOXX, Trucost, FTSE/Russell, MSCI and ISS ESG to power investment research, products, indices and ratings.
Laurent Babikian, Joint Global Director of Capital Markets at CDP, said:
“Engagement is critical to driving disclosure, and disclosure is the first step to environmental action. Climate change, deforestation and water security present material risks to investments, and companies that are failing to disclose their impact risk trailing behind their competitors in their access to capital.”
Under the new campaign, 263 financial institutions will engage the companies over the summer to disclose data through the CDP system. Companies targeted by the initiative include Tesla, Exxon Mobil, Saudi Aramco and Glencore, and cover nearly $25 trillion in market capital.
According to CDP, following a similar campaign last year, resulted in nearly 60% more companies disclosing after being targeted, and that companies were more than twice as likely to disclose following direct investor engagement.
The current year’s campaign is seeing a significant increase in participating investors, up by 57% over last year. Investors also appear to be expanding their focus beyond climate reporting, with 51% and 36% increases in the number of companies targeted for engagement on their water and forest-related impacts, respectively.
Elodie Laugel, Chief Responsible Investment Officer at Amundi, one of the participating investment firms, said:
“Amundi has been actively supporting CDP’s Non-Disclosure Campaign since its launch in 2017. The need for transparent and comparable corporate disclosure through a well-articulated framework on key environmental topics (such as climate, water, and deforestation) is more important than ever. CDP has been a standard setter for corporate disclosure since its inception and continues to be of great value to investors.”