investors demand better disclosureJuly 2002
Thirty institutional investors have significantly stepped up the pressure on companies to improve disclosure on their social and environmental impacts by jointly demanding that the world’s 500 largest companies provide more information on their greenhouse gas emissions.
The investors, who between them manage assets of around $4.9trillion (£3.3tn), have written to the 500 companies requesting more information on emissions, which they say is needed to allow them to make long-term investment decisions – not just for their SRI portfolios, but also for other investments they manage.
Paul Dickinson, co-ordinator of the initiative, said: ‘We have done this because there are potential business risks and opportunities related to actions stemming from the perception of climate change that have implications for the value of shareholdings in corporations worldwide.’
He said companies risked falling foul of regulations designed to penalize high carbon emitters, and that reputations and brands could be damaged by ‘shifts in consumer sentiment due to a corporation’s stance on climate change’.
Dickinson said there was frustration among the group of investors, which includes Allianz, Credit Suisse Group and Swiss Re, that company data on greenhouse gas emissions is ‘not always available, is of poor quality, and sometimes lacks comparability.’
Data provided by the companies will be made public by the investors and published by analysts Innovest Strategic Value Advisers in February 2003.
The initiative has been put together by the Carbon Disclosure Project, which is chaired by SRI pioneer Tessa Tennant and has been set up by the 30 investors with help from Rockefeller & Co in New York.
The project was set up after a recent study by Innovest concluded that failure to manage climate change risks could lead to losses running into billions of dollars for businesses, with investors suffering as a result.
The Carbon Disclosure Project is a further sign of growing investor awareness of the need for better corporate disclosure of social and environmental data.
Last year the Association of British Insurers issued disclosure guidelines on SRI for its members, and earlier this year a group of US investors, including FleetBoston Financial and the Calvert Group, formed the Sustainable Governance Project, which encourages firms to produce more data on climate change emissions.
One of the UK’s largest pension funds, the Universities Superannuation Scheme, has been working on the formation of an Institutional Investor Group on Climate Change, and the Local Authority Pension Fund Forum has begun a disclosure campaign on climate change after official figures showed only 55 of the UK’s 100 largest companies by market capitalization comply with emissions reporting guidelines introduced by ministers in 1999.
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