Investor pressure on companies including Enbridge, BP boosted climate disclosures in 2020

Image: Enbridge

Companies are more than twice as likely to report climate risk data when investors actively pressure them to do so, according to a leading climate-disclosure platform.

More than 1,000 companies were asked by investors to disclose their impact on forests, climate change and water security last year, as part of an annual campaign by the nonprofit CDP. The response rate rose to 20 per cent in 2020 after lingering around 15 per cent for the previous three years, it said in a report released on Tuesday.

The 206 companies that disclosed new information to CDP after investor pressure include Enbridge Inc., Pernod Ricard SA and Nestle SA. They produce a combined 670 million metric tons of direct CO2 emissions, almost the same as Germany’s entire national fossil-fuel emissions.

“With business resilience and adaptation to systemic risks exposed by the global public health crisis, the tide is rapidly turning against companies not taking note of investor demand for disclosure,” said Emily Kreps, global director of capital markets at CDP.

Investors need companies to report data that show how vulnerable they are to climate change, and what they are doing to address it, in order to help them understand financial risks they are undertaking. In 2020, 108 institutional investors with a combined $12 trillion in assets asked companies to disclose data to CDP, which saw a particularly strong response from those based in Latin America and the Caribbean, Europe and Japan.

The campaign struggled to succeed in Oceania, where just eight per cent of companies engaged by investors ended up disclosing. The report cited failures by the Australian government — which had to deal with some of the worst wildfires and droughts in the nation’s history last year — to create a political and business environment that incentivizes companies to act on climate.

On a global level, many of the biggest names continue to resist demands to disclose their information to CDP., BP plc, Facebook Inc. and Royal Dutch Shell plc have all faced calls from the campaign for four years in a row, and they still don’t disclose the full scope of their impact on the platform.

© 2021 Bloomberg L.P.

Dear user, please be aware that we use cookies to help users navigate our website content and to help us understand how we can improve the user experience. If you have ideas for how we can improve our services, we’d love to hear from you. Click here to email us. By continuing to browse you agree to our use of cookies. Please see our Privacy & Cookie Usage Policy to learn more.