More than 680 financial institutions have requested that the boards of thousands of companies worldwide disclose data on their environmental impacts including climate change, deforestation, and water security.
More than 10,400 companies are being asked for the information from financial institutions which have more than $130 trillion in assets according to CDP, a non-profit that runs an environmental disclosure system for businesses, municipalities, and governments.
Additionally, over 300 companies with more than $3.5 trillion in annual revenue and representing 51 industries in 29 countries have joined The Climate Pledge, a program by Amazon and Global Optimism. Members agree to measure and report greenhouse gas emissions, implement decarbonization strategies, and achieve net zero annual carbon emissions by 2040.
Maersk, SAP, Weyerhaeuser, Sunrun, and Harman are among those companies that joined the Climate Pledge. Several companies who have also received funding through the $2 billion Climate Pledge Fund also joined, including BETA Technologies, Infinium and Pachama.
This kind of transparency is becoming a greater priority in business as more companies embrace transparency in their sustainability efforts. Boards are increasingly made up of those who have environmental, social and governance (ESG) experience as investing in ESG grows at a rapid rate.
Governments are also beginning to make these disclosures mandatory, including efforts in Europe, Japan, New Zealand, and India.
Of those being asked for information this year, 3,300 companies are being asked to provide information on their sustainability efforts for the first time. Some of the financial institutions involved in the effort include Allianz, AXA, Capital Group and Vanguard.
CDP says its data shows that companies that disclose such information help uncover risks and opportunities, better track progress, and gain access to lower costs of capital.
“We need this comparable, consistent and clear data for our investment decision making, our research, our product development, our corporate engagement and our regulatory compliance,” says Jean-Jacques Barbéris, head of institutional and corporate clients coverage and ESG supervisor at Amundi.