Companies around the world are twice as likely to disclose the impacts their operations have on the environment after being targeted by financial institutions, according to the latest report of CDP’s Non-Disclosure Campaign.
The report also showed that companies in Europe and Asia, excluding Japan, engaged by financial institutions were three times more likely to disclose such impacts.
Each year, financial institutions such as investors and banks work with non-profit CDP to request that companies participate in its main disclosure request by responding to CDP questionnaires across key environmental themes, such as climate change, forests and water. However, as of 2022, a number of high-impact companies have yet to report their environmental impacts through CDP.
As such, the campaign, which runs alongside the main CDP disclosure request, is a collaboration with capital markets signatories to engage with companies that have failed to respond to the non-profit’s climate change, forests, or water security questionnaires.
To achieve a net zero future, it is essential that companies disclose the impacts their operations have on the environment and be fully transparent about their plans and progression towards environmental sustainability, a CDP spokesperson said.
This year’s campaign was supported by 288 financial institutions, with nearly €26trn in total assets, directly engaging with 1,590 companies from a list of non-disclosing corporates and requesting that these companies disclose their climate, forest and water impacts through CDP.
Overall, 317 companies disclosed after engagement by the financial institutions. This breaks down to 221 (19.5%) companies disclosing on climate change, 58 (14%) on forests, and 66 (14.3%) on water security.
Signatories to this year’s campaign had the biggest impact on encouraging companies to disclose through CDP’s forests questionnaire, compared with climate change and water.
Moreover, companies targeted in the Non-Disclosure Campaign were 6.8 times more likely to disclose on forests. In addition, the biggest impact financial institutions had were with companies in the biotech, healthcare and pharma sectors, on water disclosure.
The non-profit organisation, which runs a global environmental disclosure system for companies, added that companies disclosing through CDP after being engaged as part of the Non-Disclosure Campaign tend to continue to disclose their environmental impacts, with 90% of companies continuing to report to CDP in subsequent years after the first engagement.
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