S&P; 500 Fare Poorly on Climate Risk Disclosure
In October, we took note of the Global Framework for Climate Risk Disclosure, a voluntary standard corporations can use to disclose their climate-related risks to their investors. On Wednesday, Ceres and Calvert released their report Climate Risk Disclosure by the S&P; 500, which took a look at how companies in this index are doing in applying these standards. The short version of the verdict: not very well. Among the problems the report identified:
- A Poor Response to the Request for Information: Only 47% of the companies sent surveys by Climate Disclosure Project last February responded to them. In contrast, 72% of FT 500 companies responded.
- Keeping Information Secret: Of those companies that did respond, seventy (nearly 1/3 of the total respondents) wouldn't allow their responses to be made public. We wonder which part of "disclosure" they don't understand.
- Words Don't Match Actions: Eighty percent of the responding companies "...addressed the need to reduce greenhouse gas emissions"; about 25% of the respondents disclosed "...measurable emissions reductions targets and specific time
frames for reduction."
A dry read? Certainly. As investors continue to become more aware of the economic risks presented by the climate crisis, though, more corporate executives will probably want to think harder about this topic. As with most issues in the financial world, the perception of being unprepared can be just as damaging as the reality. ::Carbon Disclosure Project via Insurance Journal