The Boards of nearly 10,400 companies worldwide - worth US$105 trillion in market cap – will be requested to disclose data on their environmental impact this year by more than 680 financial institutions worth over US$130 trillion in assets, including Allianz, Amundi, AXA, BNP Paribas, CalPERS, Capital Group, State Street and Vanguard.
The Letters start going out to companies today, requesting they disclose their data on all or some of the following environmental issues: climate change, deforestation, and water security. Companies are being asked to disclose this information through CDP - the non-profit that runs the world’s environmental disclosure system for companies, cities, states and regions.
Almost 100 more financial institutions – including asset managers, asset owners, banks and insurance companies - have put their name to the disclosure request this year compared to last, demonstrating rising demand for TCFD-aligned corporate environmental information.
Nearly 3,200 companies out of 7,176 requested, disclosed their environmental information in response to CDP’s Letter to the Board in 2021. This is in addition to over 10,100 other companies that disclosed through CDP, either at the request of their business customers through CDP’s Supply Chain program, or of their own volition. This means that in total, over 13,000 companies representing some 64% of global market capitalization disclosed their data through CDP in 2021.
Companies being asked to disclose by these institutions include over 3,300 companies that are being requested for the first time (marking a 46% increase since last year), as CDP pushes to scale the uptake of corporate environmental reporting even further. Since the first disclosure request was sent out in 2002, CDP has grown to house the world’s largest global repository of environmental data, but by 2025, the aim is to grow this to cover 90% of the world’s highest-impact firms.
While more companies are being requested and reporting every year, many still do not disclose enough data on their environmental impact. CDP stated that nearly 4,000 companies – including Berkshire Hathaway, Chevron, Exxon Mobil and Glencore – failed to respond to the request for disclosure from financial institutions in 2021.
CDP states that non-disclosure will no longer be an option for many of these companies, with a series of mandatory environmental disclosure requirements coming in this year, including in the EU, Japan, New Zealand and India, as well as TCFD regulation being introduced in the UK from next month.
Non-disclosing companies will also face increasing pressure from financial institutions. Companies that repeatedly ignore this disclosure request may be targeted as part of CDP’s Non-Disclosure Campaign, in which investors directly engage with specific companies they invest in to push for greater transparency on environmental issues.
“Since we sent out our first disclosure request to companies two decades ago, CDP has played a critical role in transforming environmental reporting from a niche side issue to the top of boardroom agendas, with disclosure now being mandated in regulation worldwide,” said Paul Simpson, CEO of CDP. “While many companies are disclosing, setting targets and taking action across their own business operations and value chains, there is a surprisingly large part of the market still to take the vital first step of disclosure. These companies are becoming increasingly out of touch with reality, investor and public opinion, not just because of the regulatory stick that is approaching, but also because there are so many proven benefits to transparency. We hope that this request, backed by such an influential group of financial institutions worldwide, will hit home and drive transparency and action even further.”
Jean-Jacques Barbéris, Head of Institutional and Corporate Clients Coverage & ESG Supervisor at Amundi, commented: “Investors have an important role to play in driving corporate transparency and action on environmental issues – we recognise this and have supported CDP’s disclosure request for the last 12 years. 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. It is also vital for us to meet our own climate goals. But crucially, we don’t just need data on climate, we also need more information on other areas of natural capital, and we must ensure that this is incorporated in what companies disclose and take action on going forward.”