CDP, Climate Pledge Increase Corporate Sustainability Initiatives

by | Mar 14, 2022

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Sustainable Investment

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More than 680 financial institutions are requesting the boards of thousands of companies worldwide disclose data on their environmental impacts while the Climate Pledge continues to gain support as sustainability efforts keep growing as a corporate priority.

The companies are being asked to disclose all or some of their data on climate change, deforestation and water security through a CDP campaign. More than 10,400 companies are being asked for the information from the financial institutions, which have more than $130 trillion in assets.

Additionally, nearly 100 new companies have joined The Climate Pledge, a program by Amazon and Global Optimism. There are now more than 300 companies involved in the pledge, where companies must agree to measure and report greenhouse gas emissions, implement decarbonization strategies and achieve net zero annual carbon emissions by 2040.

Maersk, SAP, Weyerhaeuser, Sunrun and Harman are among those companies that joined the Climate Pledge. Several companies who have also received funding through the $2 billion Climate Pledge Fund also joined, including BETA Technologies, Infinium and Pachama.

Companies that have joined the Climate Pledge have more than $3.5 trillion in annual revenue and represent 51 industries in 29 countries.

CDP, which is a non-profit that runs an environmental disclosure system for businesses, municipalities and governments, says nearly 100 more financial institutions are involved in the disclosure request compared to last year.

The result of such efforts has increasingly led to results, and CDP said last year it received its highest corporate disclosure numbers on record. Nearly 3,200 companies out of 7,176 requested disclosed their environmental information in response to CDP’s request in 2021.

Additionally, CDP says 10,100 other companies disclosed information at the request of their business partners through CDP’s supply chain program or through their own volition. CDP says that means companies representing 64% of the global market capitalization disclosed their data in 2021.

Such transparency is becoming more of a priority in business as more companies work toward transparency in their sustainability efforts. Boards are increasingly being filled with those who have environmental, social and governance (ESG) experience as investing in ESG grows at a rapid rate.

Governments are also beginning to make such disclosures mandatory, including efforts in Europe, Japan, New Zealand and India. Taskforce for Climate Financial Disclosure regulation is also being introduced in the United Kingdom this month.

CDP offers investors information as part of its Non-Disclosure Campaign, in which they can directly engage with the companies they invest in and push for greater transparency on these topics.

Of those being asked for information this year, 3,300 companies are being asked to provide information on their sustainability efforts for the first time. Some of the financial institutions involved in the effort include Allianz, AXA, Capital Group and Vanguard.

CDP says its data shows that companies that disclose such information help uncover risks and opportunities, better track progress and gain access to lower costs of capital. The organization’s questionnaires are industry specific and aligned with recommendations from the TCD and global disclosure standards being developed by the International Sustainability Standards Board.

“We need this comparable, consistent and clear data for our investment decision making, our research, our product development, our corporate engagement and our regulatory compliance,” says Jean-Jacques Barbéris, head of institutional and corporate clients coverage and ESG supervisor at Amundi.

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