$136trn investor coalition pushes big businesses for environmental information
More than 740 investors, collectively managing more than $136bn in assets, are requesting more detailed information on the environmental policies and impact of more than 15,000 companies.
A letter from the 746 investors, to the boards of these companies, has been sent today (13 March). It is the annual letter from investors engaged with disclosure platform CDP, which enables disclosures of data on climate, deforestation, water and biodiversity. For the first time, the letter also asks companies for information on their plastics impact and plans to reduce this, ahead of the full launch of a plastics disclosure platform from CDP.
Despite much coverage of the so-called war on ESG investing in the US, CDP has recorded a 10% year-on-year increase in the number of investors requesting disclosures from corporates.
The letter has signatories ranging from asset managers and owners to insurers and banks. Signatories from 40 countries are represented, including the European Investment Bank (EIB), Aviva and Storebrand.
CDP’s founder and chair Paul Dickinson said: “Despite suggestions that investors are deprioritizing ESG considerations, this year’s Letter to the Board shows the complete opposite. Capital markets understand the necessity for comprehensive corporate environmental data in informing investment and lending decisions across markets.
“This, coupled with a record 18,700 disclosures last year – a 38% increase, demonstrates corporate ambition on meeting the mid-century goals of the Paris Agreement.”
While CDP has tracked increased disclosures, around 30,000 large businesses failed to answer requests for information from itself or from its engaged investors last year. Companies in this cohort include Tesla, Exxon, Saudi Aramco and Berkshire Hathaway.
The letter from investors this year emphasises not only the fact that finance is easier to secure for businesses with strong ESG credentials, but several other benefits of enhanced disclosure, including preparedness for policy and regulation.
Dickinson said: “Disclosure is already mandatory or soon to become so in most major economies including the UK, EU, Brazil, Japan, and the US. Companies still lagging behind are simply out of touch with market reality and are overestimating their own resilience. They must act now to get ahead of governments and market regulations, and to future-proof their operations.”
The letter also covers reputational risk, noting shifting consumer sentiment and increased scrutiny of the environmental policies and impacts of corporations in the mainstream media.
CDP is set to release a major report later this week tracking corporate disclosures via its platform over the past year. edie will cover this report upon publication.
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