Investor support grows for CDP-backed corporate ‘Carbon Action’ initiative

$10trn of assets now back call for energy cost cutting

A year-old investor-led project via the Carbon Disclosure Project to get the world’s largest listed companies to manage their carbon emissions now has $10trn (€7.5bn) of assets behind it.

The Carbon Action project was launched by 34 institutional investors, coordinated by the CDP, last year. They were calling on the top 500 companies in the FTSE Global Equity Index to implement cost-effective greenhouse gas emissions reduction plans. Founding signatories included: Aviva Investors, AXA Investment Managers, Boston Common Asset Management, Calvert, CCLA, Batirente, F&C, Insight Investment, KLP, PhiTrust, Rockefeller, SAM, Sarasin, Strathclyde Pension Fund and Scottish Widows Investment Partnership.

The group has now grown to 92 pension funds, asset managers, insurers and banks, the CDP said. The CDP said notable new backers include Spanish banking giants Banco Santander and BBVA, Dutch pension fund manager APG and UK-based funds firm Henderson.

The CDP says the group has now written to the chief executives of 415 of the world’s largest public companies calling for cost-effective management and reductions of their carbon emissions.

The letters were sent alongside the CDP’s regular annual request – sent to almost 5,000 firms – for disclosure of greenhouse gas emissions, climate change strategies and water use. As with the CDP’s disclosure request, companies have until May 31 to respond.Data from companies’ responses will be compiled into a public summary report, and a detailed investor analysis for the signatories, which will be delivered this autumn. Signatories to Carbon Action can then use the information in their engagements with company management, or collaboratively through the UN Principles for Responsible Investment.

“Institutional investors recognise that companies can reduce emissions while generating efficiencies” – CDP

“Companies stand to benefit from improving operational energy efficiency as well as from capturing the market opportunity for energy efficiency-related products and services,” said Claudia Kruse, APG’s head of sustainability and corporate governance. She added that investors need to know more about how company managers drive improvements and seize strategic opportunities.

Santander Chairman Emilio Botín says the bank is integrating social and environmental criteria into its credit analysis. He added it is making progress by measuring and reducing its main consumption inputs and emissions.

“Institutional investors increasingly recognise that companies in their portfolios can reduce emissions while generating efficiencies,” said Paul Simpson, chief executive of the CDP.