Finance firms with $184.2 trillion urge boards for more environmental data

For the first time, the questionnaire will ask companies about plastics-related business risks and how they are addressing them. PHOTO: AFP

LONDON – Financial institutions managing US$137 trillion (S$184.2 trillion) in assets will this week call on companies to share more data on their environmental impact, the chair of not-for-profit disclosure platform CDP told Reuters.

In a letter to the boards of more than 15,000 companies, 748 financial institutions – including BlackRock, Fidelity International, Aviva and the Canada Pension Plan Investment Board (CPPIB) – will ask companies to report on issues including climate change, deforestation, water security and biodiversity.

The letter to companies, and its questionnaire, is an annual event, but the number of financial institutions joining the initiative is the biggest this year, CDP said.

For the first time, the questionnaire will also ask companies about plastics-related business risks, for example, around packaging, and how they are addressing them.

“Consistent, decision-useful information is critical for investors to evaluate and assess the potential impacts of climate-related risks and opportunities on a company’s performance,” Mr Richard Manley, chief sustainability officer at CPPIB, said in a statement.

The initiative is coordinated by CDP, a charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. The data collected, as well as being used by the customers of companies and their investors, also helps underpin financial products such as indexes.

“Last year, we had 18,700 major corporations reporting to us. This year, we expect considerably more,” Mr Paul Dickinson, the founder and chairman of CDP, said.

The increase in demand for more information from companies comes as regulators across the world begin to mandate some form of disclosure in law, including the European Union and Britain. The United States is expected to announce similar measures in April.

Founded in 2000, CDP’s work informs global climate reporting frameworks including the International Sustainability Standards Board backed by Group of 20. The board aims to set a global standard for firms disclosing how climate change affects their business. REUTERS

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