CDP, a non-profit environmental platform, revealed that more than 1,600 companies, which have the biggest impact on the environment, are not disclosing environmental data.
CDP, an organization that standardizes data to facilitate comparisons of corporate performance in areas such as climate change, water, and deforestation, has announced that a record-breaking 288 financial institutions, with a combined asset value of approximately $29 trillion, will send letters to companies urging them to disclose their environmental data. This engagement initiative directly targets 1,607 high-impact companies that are currently not disclosing environmental data through CDP, including industry leaders such as Schroders, Cathay Financial Holdings, Aviva Investors, and Manulife.
The campaign specifically focuses on companies like Saudi Aramco, Exxon Mobil, Glencore, Chevron, Tesla, Volvo Group, Roche Holding, Swatch Group, and Caterpillar, all of which have significant assets totaling over $21 trillion. The objective is to encourage these non-disclosing companies to disclose their environmental data through the collective efforts of the financial institutions.
These 1,607 high-impact companies, spanning across 51 countries, represent a combined market capitalization of over $21 trillion (as of February 2023) and emit an estimated 4,200 megatonnes (Mt) of carbon dioxide equivalent (CO2e) annually. This emission level is nearly equivalent to the combined greenhouse gas emissions of the United Kingdom, the European Union, and Canada.
The number of financial institutions supporting the CDP campaign has quadrupled since its launch in 2017, primarily due to the impending mandatory disclosure regulations in countries such as the UK, EU, Brazil, Japan, and the US.
Demand for disclosure of companies’ climate change impacts remains high, with approximately 72 percent of stakeholders expressing their interest, while demand for disclosure on forests has increased by 3 percent.
In 2022, companies like Glencore, Swatch Group, DTE Energy, and South32 failed to disclose their impacts on climate change, forests, and water-related issues. Consequently, they will be targeted for disclosure in the current year. Similarly, BP, Amazon, and BMW disclosed their climate change impacts in the previous year but did not respond regarding forests and water security. They will also be called upon to disclose across all three themes in the 2023 campaign.
Exxon stated that it has a plan to reduce emissions and support a net-zero future while creating value for shareholders and stakeholders. The company mentioned that it has reduced emissions from its operations and methane emissions intensity from its assets since 2016. Additionally, it has increased its investments in lower-emission initiatives. Glencore declined to provide a comment, and Caterpillar did not respond to the request for comment.
The non-disclosing companies collectively emit an estimated 4,200 megatonnes of carbon dioxide equivalent annually, which is nearly equal to the greenhouse gas emissions of the United Kingdom, the European Union, and Canada combined, as highlighted by CDP.
Claire Elsdon, CDP’s joint global director of capital markets, explained that the organization helps small groups of leading shareholders target companies and exert pressure on their boards. The data provided by CDP is crucial for financial institutions to manage risks, track portfolio alignment with net-zero goals, and unlock sustainability opportunities, thereby safeguarding long-term profitability.
Since its establishment in 2017, CDP has expanded its scope of targeted companies for data disclosure. Consequently, the number of non-disclosing companies being targeted this year is higher than in the previous campaign held in 2022.
Despite progress being made, disclosing environmental data remains a challenge in high-emitting sectors, and convincing laggards to submit their data will be difficult, according to Elsdon. Currently, approximately 50 percent of companies across various sectors disclose their environmental data.
The 2022 campaign delivered responses from 388 high-impact companies out of nearly 1,500 targeted, and CDP said firms were 2.3 times more likely to disclose if they were directly engaged by financial institutions.
Investors targeting non-dislosing companies this year include Sumitomo Life Insurance, AQR and Legal & General Investment Management.
The platform is now open, and the deadline for companies to submit their questionnaires in order to be eligible for scoring is July 26, 2023.