Measuring corporate environmental disclosure: results of the CDP campaign 2021

East Capital has for many years been pushing for more disclosure from portfolio companies, addressing this issue during meetings with company management, and supporting CDP − an international non-profit that drives companies and governments to reduce their greenhouse gas emissions, safeguard water resources and protect forests. CDP has made an important contribution to increasing awareness of and attention to climate, water and forest issues by providing a transformative global system that helps and motivates companies to measure, disclose, manage and share relevant environmental information. This is done through sending questionnaires to thousands of listed companies around the world. East Capital has been an investor signatory of CDP since 2014.

Environmental data is definitely still a huge ask from most companies in emerging and frontier markets where national regulatory frameworks are lagging behind and where unfortunately domestic investors do not yet prioritize these issues. Hence the work of CDP is really important, and we were keen to participate again in the annual Non-Disclosure Campaign. We have a well established framework to select which companies across our portfolios of 200+ names to put on our list as lead and co-sign. Besides, the campaign is seen as a reiteration of previous direct requests, since CDP participation is assessed in our proprietary ESG scorecard and very often part of our individual engagement with corporates. Our success rate keeps improving and this year we were particularly happy to see some of our holdings in Russia and China with very large environmental impact reporting for the first time. Proper risk management and target settings always start with adequate data collection. 

Results of 2021 non-disclosure campaign

• The 2021 campaign saw a 56% rise in the number of financial institutions signing up to the campaign compared to the previous year and saw increased levels of engagement from investors across all three themes. The growth reflects greater engagement from financial institutions on environmental disclosure.
• A record-breaking 25% of companies engaged in the campaign responded to at least one CDP questionnaire, and companies engaged in the campaign were 2.3 times more likely to disclose if engaged by investors to do so.