June 18, 2019 / News

Investors to probe 700 companies on environmental policies

By Joe McGrath, ESG Clarity

Firms are hoping to force a change in corporate behaviour

Investors to probe 700 companies on environmental policies

Investors representing some $10 trillion in assets under management are to club together to force the world’s largest companies to detail how their businesses are responding to issues from climate change, water scarcity and deforestation.

Representatives from Candriam, HSBC Global Asset Management, Investec Asset Management, the Environment Agency Pension Fund, Cathay Financial Holdings, Amundi, NN Investment Group and Washington State Investment Board are among the 88 investment groups involved.

These investment groups are working together with the non-profit organisation, the Carbon Disclosure Project (CDP), to target companies through engagement and voting at company meetings.

Exxon Mobil, BP, Chevron, Amazon, Volvo, Alibaba, Qantas Airways and palm oil company Genting Plantations Bhd were earmarked by the investors in a public statement on Monday (17 June).

Transparency needed

“Companies must disclose their role in addressing the climate crisis we face,” said Emily Kreps, global director of investor initiatives at CDP.

“We know that climate change, water security and deforestation present material risks to investments, but these risks cannot be managed without proper information.”

Kreps explained that, while some companies may claim to already disclose these details in their sustainability reports, that is not enough on its own.

She added: “Investors and the wider market need transparency in the form of consistent, comparable and relevant metrics that are easy to access, compare and benchmark.

“And as for companies that say their investors do not care about these issues, this campaign demonstrates that is simply not the case.”

Kreps said that investors are seeking this information for corporate engagement purposes and for selecting stocks and to build investment products.

Vincent Hamelink, chief investment officer at Candriam, added: “It is of the greatest importance that companies disclose and manage their environmental impact and we are proud to be taking a leading role as a loyal supporter of CDP for the 15th consecutive year.

“Collaborative initiatives are crucial for effective impact, as they ensure a consistent message from asset owners. These will continue to increase in importance, as the financial community’s ESG awareness gains momentum.”