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Jul 2022

Insurers also seek disclosure of environmental data from companies

Source: Middle East Insurance Review | May 2022

More than 680 financial institutions with more than $130tn in assets have sought disclosure of environmental data from nearly 10,400 companies.
 
The request routed through CDP to the boards of nearly 10,400 companies worldwide – worth $105tn in market cap – will seek disclosure of data on their environmental impact this year.
 
The more than 680 financial institutions also include Allianz, Amundi, AXA, BNP Paribas, CalPERS, Capital Group, State Street and Vanguard.
 
The letters request the companies that 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.
 
While more companies are being requested and reporting every year, many still do not disclose enough data on their environmental impact. 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.
 
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 6 April 2022.
 
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.
 
CDP CEO Paul Simpson said, “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.”
 
CDP’s questionnaires are sector-specific and aligned with the recommendations of the TCFD, which have formed the basis of most incoming climate and environmental disclosure regulation, as well as the global disclosure standards currently being developed by the International Sustainability Standards Board and EFRAG. M 
 

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