The lights of the buildings of the banking district are reflected in the river Main in Frankfurt, Germany, on Nov 24, 2022. (PHOTO / AP)
LONDON – Financial institutions managing $137 trillion in assets will this week call on companies to share more data on their environmental impact, the chair of disclosure platform CDP told Reuters.
In a letter to the boards of over 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 ever this year, 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
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," Richard Manley, chief sustainability officer at the Canada Pension Plan Investment Board, said in a statement.
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The initiative is coordinated by environmental non-profit CDP and 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," Paul Dickinson, founder chair 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.
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Founded in 2000, CDP's work informs global climate reporting frameworks including the G20-backed International Sustainability Standards Board (ISSB), which aims to set a global standard for firms disclosing how climate change affects their business.