For over a decade, CDP is working to integrate climate change and energy efficiency into mainstream business thinking. Allianz has supported CDP in its dual role: as a company and institutional investor. On behalf of the investment community, CDP requests information each year on greenhouse gas emissions, energy use and the risks and opportunities from climate change from thousands of the world’s largest companies, including Allianz. Peer comparison shows Allianz is in the lead, scoring 99 points out of 100 for disclosure and A- score for performance (A to C, A being the best).
What exactly is CDP and what do they do?
Simone Ruiz-Vergote: Over the last two decades, corporate disclosure of environmental data has grown exponentially. CDP is one of the drivers of this development. CDP enables companies from different sectors to measure, disclose, share and compare their activities and strategies related to climate change. Already over half of the world’s companies by market capitalization report to the CDP, including over 80 per cent of the 500 largest companies. This illustrates that transparency on environmental issues is now established business practice among large corporates.
Every year since CDP’s inception in 2003, Allianz has reported its climate change strategy activities and business-related greenhouse gas emissions to CDP. Allianz has been included in the global Carbon Disclosure Leadership Index (CDLI) for several years now. But I still see potential for improvement for initiatives like CDP, both in terms of the number of companies reporting and in terms of the quality of reported data.
Who cares about all this information?
Primarily, CDP is an investor-driven initiative – it is backed by more than 767 institutional investors with a combined US$ 92 trillion in assets under management. It gives investors access to a global source of year-on-year information that supports long-term objective sustainability analysis. Also Allianz is not only reporting to CDP but actively supports CDP as one of the 767 “CDP signatories”.
Also other stakeholder groups like customers and business partners are interested in this kind of information. We believe that our good rating at CDP demonstrates the high priority we ascribe to environmental issues and sustainability.
Looking into the future, what is coming next?
No company, and certainly not CDP’s leading ones, can lean back and relax. If you want to remain at the top, you have to improve year after year. We feel that this is challenging and encouraging at the same time. Specifically questions about emissions stemming from e.g. your supply chain or your investment portfolio become increasingly pressing.
A next step expected by CDP is to include available corporate environmental information - and what we can deduce in terms of company-specific risks - into the investment process. This could help driving investments towards a low-carbon economy. Just recently a new UN initiative was announced. It aims to mobilize a critical mass of institutional investors to commit to gradually decarbonizing their portfolios.
But there is still a long way to go from mere transparency to really actionable information. Actionable information means that climate risks and opportunities are quantifiable and matter from an investment perspective. Allianz contributes to obtaining this information both by commissioning studies and by its membership in sector associations working towards this objective like UNEP FI, ClimateWise or the Principles for Responsible Investment (PRI).