CDP beefs up non-disclosure campaign as investors publicly call on leading businesses to respond to their requests for climate-related information
Last Friday, the UN and the UK launched the high profile Race to Zero campaign with the news that around 1,000 corporates around the world have pledged to deliver net zero emissions by 2050 at the latest.
Today, investor-backed climate disclosure group CDP takes on the flip-side of corporate engagement with the climate crisis with the publication of a list of just over 1,000 companies that have declined to provide relevant information on their environmental impacts to investors.
A group of over 100 global investors holding over $10tr in assets have today publicly backed CDP flagship campaign to put pressure on some of the globe's highest impact corporations.
The investor backed CDP issues information requests to listed companies on behalf of investors, asking for them to publicly disclose information on their greenhouse gas emissions, climate strategies, and policies relating to water use and deforestation.
Thousands of companies provide comprehensive updates to investors, helping them to make informed decisions that account for environmental risks and enabling a dialogue that encourages companies to enhance their climate performance.
However, a significant number of companies fail to respond to some or all of CDPs information requests, despite its approach being backed by some of the world's largest institutional investors and its information requests being in line with international standards.
As such, the Non Disclosure Campaign publicly lists 1,051 companies from 49 countries that have failed to respond to some or all of CDP's information requests, including some household names such as Exxon Mobil, Facebook, Berkshire Hathaway, Nintendo, and Domino's Pizza.
CDP said the list has grown by nearly 20 per cent since last year alone, with this year's campaign reaching out to close to a third of all non-disclosers worldwide. The companies being engaged cover over $8tr in global market capitalisation, and are estimated to emit more than 4,800 megatonnes of carbon dioxide equivalent (CO2e) annually - equivalent to the 2017 greenhouse gas emissions from the whole of the US.
Nearly a fifth of the companies selected by investors already disclose to CDP on one theme, be it climate change, forests, or water security, but they are included because they do not yet disclose data on another theme, which has been identified by investors as a potential material issue.
Fifty-eight per cent of the companies on the list faced calls from investors to disclose their impact on climate change, while nearly a third - including Chevron and Imperial Oil - were asked to disclose on at least two themes from climate change, forests or water security.
CDP said publicly naming companies helped to improve engagement with investors. Last year 88 investors targeted 707 companies through the campaign and companies that were named by their investors as part of the 2019 campaign were more than twice as likely to provide new disclosure information than those who were not.
"The importance of investor engagement to drive disclosure cannot be overstated," said Emily Kreps, global director of capital markets at CDP. "Climate change, water security and deforestation present material risks to investments, and companies that are failing to disclose their impact risk trailing behind their competitors in their access to capital.
"As the growth of this campaign shows, investors require decisive data that is consistent, comparable and comprehensive. To make this possible, they expect companies to wholeheartedly engage with TCFD-aligned standards on environmental disclosure and reporting. With business resilience and adaptation to unexpected, systemic risks exposed by the recent public health crisis, the tide is rapidly turning against companies not taking note of investor demands."
Her comments were echoed by Katarina Hammar, Head of Active Ownership at Nordea Asset Management, who said the investment giant believes "that increased transparency around companies' environmental performance is a key enabler to improve company performance and to create a more resilient economy".
"Consistent and comparable data is key in our company analysis and in particular in the climate risk and opportunity analysis," she added.
The campaign is part of a growing trend that has seen companies - and in particular business in carbon intensive sectors - face growing calls from investors for them to come forward with credible decarbonisation and climate resilience strategies.
Investor engagement campaigns have been credited in recent years with securing a series of net zero pledges from high profile businesses, including a number of oil majors and global mining firms.
It also follows the latest report from think tank Carbon Tracker, which last week warned a failure by investors to plan for a global transition to a net zero emission economy could leave them facing multi-billion dollar write downs as the demise of the fossil fuel economy results in falling demand for the carbon intensive companies that have played a dominant role in the financial system for decades.
On September 30th BusinessGreen will host the world's first Net Zero Festival - a three day virtual summit committed to celebrating and advancing the net zero transition.
In support of the Race to Zero campaign we are offering one VIP pass for the digital event to any business or organisation that has a net zero target in place.
To apply for your VIP pass please send a link to your net zero pledge to [email protected] by Friday 12th June.
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