Global asset managers have joined a campaign to put pressure on companies not reporting climate impact, including those in autos, retail and oil sectors – as well as the investment space.
Amundi, Schroders, Aviva, Nuveen and Legal & General are among the 263 financial institutions from 29 countries that have backed the CDP 2022 Non-Disclosure Campaign to put pressure on non-disclosing companies to disclose on climate impact.
The targets include 1,473 companies over 50 countries including well-known names such as Tesla, Exxon, Glencore, Roche, Swatch, Volvo, Adidas, Amazon and BMW.
However, asset managers from across the world are also named including Ashmore, Allied Minds, City of London Investment Group and River and Mercantile in the UK, while Blackstone Group in the US and Brookfield Asset Management in Canada are also being called on to disclose climate data.
More encouragingly, non-profit CDP, which runs a global environmental disclosure system, reported significant increases in this year’s participation in terms of number of finance firms signed up in support.
It said there was a 57% annual increase on last year in the number of firms requesting corporate environmental disclosure, compared to a 38% year-on-year growth in participation from financial institutions since inception in 2017.
Financial firms are more aware of the impact their engagement as investors can have from an environmental perspective and many are setting net-zero or science-based targets, or joining initiatives such as the Glasgow Financial Alliance for Net Zero (GFANZ) and the Net Zero Asset Managers’ initiative.
In addition, UK companies are being required to report in line with the Taskforce for Climate-related Financial Disclosure (TCFD), something which is being rolled out across other nations in due course.
Non-disclosure will no longer be an option for these companies.
Laurent Babikian, joint global director of capital markets, CDP
Awareness has also been raised with corporates around the importance of the sustainable transition and they too have upped their game, indicated CDP.
A quarter of the companies selected by investors in this year’s campaign already disclose through CDP on one theme; either climate change, forests or water security. They are still included in the campaign because they do not yet disclose data on another theme, which has been identified as material for them.
Furthermore, CDP said there was a significant uplift in the number of companies engaged on their water and forests related impact, with a 51% and 36% uplift in the number of companies engaged compared to last year.
Last year’s campaign led to nearly 60% more companies disclosing on the themes after being targeted, compared to 2020. It also showed that companies are more than twice as likely to disclose through CDP when they are directly engaged by investors to do so.
Laurent Babikian (pictured), joint global director of Capital Markets, CDP, commented: “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.
“We are encouraged by the continued growth and success of this annual campaign and the record levels of participation this year. With a series of mandatory environmental disclosure requirements on the horizon in regions including the US, UK, Japan, EU, New Zealand and India, non-disclosure will no longer be an option for many of these companies.”
