Clean Investor conf: IIGCC’s Sørensen says investors don’t use CDP data, proposes ‘ownership’ shift

Ole Beier Sørensen, Chairman of the Institutional Investors Group on Climate Change (IIGCC), the 110-member group of European pension funds and asset managers in Europe, representing around €6trn in assets, and a senior executive at Denmark’s €70bn ATP pension fund, says investors are not using the corporate CO2 emissions data generated by the Carbon Disclosure Project (CDP) in investment decision-making, and that as a result the organisation now needs to be ‘driven’ by corporates rather than investors.

Speaking at RI’s Clean Investor conference in London last week, Sørensen claimed investors did not generally use the C02 data to inform investment decisions. “I’m glad I’ve never had a question about how we use it. We don’t do a lot with the data.” He said this raised fundamental questions about the ‘ownership’ of CDP.

To date, the CDP has operated as an investor owned initiative, which pushes corporates to report C02 data. The CDP, a not-for-profit organization, says it acts “on behalf of 551 institutional investors, holding US$71 trillion in assets under management and some 60 purchasing organizations such as Dell, PepsiCo and Walmart.”

Sørensen said the CDP data was, however, more relevant to individual companies than investors as they use it to benchmark themselves: “Are investors looking at the actual numbers? Not really,” he said.

The CDP gathers data from more than 3,000 organizations in some 60 countries. It receives funding support from a wide range of organisations such as foundations and from governments including the UK, US,Sweden, France, Holland and Australia. It also receives funding through corporate sponsorship, CDP member packages, and global partnerships.

Contacted by Responsible Investor, the CDP disagreed with Sørensen’s remarks.
CDP Chief Executive Paul Simpson said investors such as Hermes, Robeco, Aviva, CCLA and the Canadian Pension Plan all use CDP data to inform their engagements with investee companies: “I’d challenge Ole – I know he’s not correct.”

He said CDP data was also embedded in indices used by investors from Markit, S&P and FTSE.

In addition, he said the data is used in sell-side research from the likes of CA Cheuvreux, Société Générale and Goldman Sachs as well as being available from data and research providers like Bloomberg, MSCI, Thomson Reuters, EIRIS, Trucost and Sustainalytics.
Simpson stressed the good work the IIGCC is doing in terms of influencing public policy on climate change and added that ATP itself is a great partner of the CDP.
Sørensen, who is ATP’s Chief of Strategy and Research, also spoke at the conference about the difficulties the fund has had in allocating the €1bn it pledged in 2009 to emerging market climate change assets prior to the Copenhagen COP15 Climate Change Summit.

“You wouldn’t believe that number of deals we’ve looked at – hundreds if not thousands” but few have been investable, he said. He stressed that ATP remains committed to the project, but said more time would be needed.