Investors grill business giants over non-disclosure of environmental impacts

The demand for disclosure has been sent to 707 firms

Convened by CDP, the group of 88 investors collectively manage around $10trn of assets. Members include the likes of HSBC Global Asset Management, Investec Asset Management and the Pension Fund for the Environment Agency (EA).

The investors are urging companies which they believe are not transparent enough about their emissions, waste and water footprints to disclose this information – along with data concerning their relationship with deforestation – through CDP’s platform.

In total, 707 companies with $15.3trn in market capitalisation are being asked to disclose by the investors. Some of the largest firms to receive this request include oil majors BP, Chevron and Exxon Mobil; carmaker Volvo; e-retailer Amazon and Quantas Airways. Multinational IT and retail giant Alibaba and palm oil firm Genting Plantations are also being targeted.

Of the 546 of these firms being targeted to disclose on climate change, 27% – the highest proportion for any one sector – hail from the services industry. The most targeted sectors on water security and deforestation respectively are manufacturing and retail.

CDP’s global director of investor initiatives Emily Kreps said the fact that so many big investors are taking part in the campaign, coupled with the fact that more than 7,000 companies now disclose through CDP, means that the “’vow of silence’ from non-disclosing companies cannot go on”.

“While some companies may say they already disclose in their own sustainability reports, that is not enough on its own – investors and the wider market need transparency in the form of consistent, comparable and relevant metrics that are easy to access, compare and benchmark,” Kreps said.

“And as for companies that say their investors do not care about these issues, this campaign demonstrates that is simply not the case. Investors are asking for this information and using it – for corporate engagement, selecting stocks and building investment products.”

Several of the companies targeted under the campaign have recently been subject to high-profile media scandals over their approach to environmental sustainability. Amazon, for example, has faced backlash after its shareholders failed to grant the demands of 8,000 of the firm’s employees, who had been calling for a comprehensive, long-term climate plan.

Elsewhere, BP, Chevron and ExxonMobil have been this year been accused of delaying, controlling or blocking policies to tackle climate change, largely through lobbying.

Investor demands

The investment sector has made a number of significant moves to champion sustainable finance in recent months. Last September saw almost 400 investors with $23trn in collective assets pledge to help the finance sector align with the aims of the Paris Agreement, for example.

Since then, a study by the Global Sustainable Investment Alliance (GSIA) has concluded that investments in sustainable assets – including those made through designated ESG and impact investment schemes – have increased by 34% since 2016, surpassing $30trn worldwide during 2018.

Similarly, Legal & General Investment Management (LGIM) has stated that it is more concerned about the climate approach of companies it invests in than any other factor, building on its decision to divest from a host of companies it believes are showing “persistent inaction” on addressing climate risks.

Sarah George  

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