Some companies just don’t like sharing.
At least that’s my first takeaway from viewing the newly released reports from CDP (formerly, the Carbon Disclosure Project) that we’ve been waiting for. The international not-for-profit organization officially released this year’s data last night at the New York Stock Exchange. Every year, CDP collects climate reporting data it obtains by annually surveying companies worldwide, but this year, the organization asked companies something new. And the results (and lack thereof) are quite revealing.
CDP works with market forces to motivate companies to disclose their impacts on the environment and take action to reduce them. The organization administers a climate change questionnaire annually to 4,000+ companies, including more than 1,500 in the United States. Typically, the survey includes questions on companies’ climate risk management, greenhouse gas emissions, and emission reduction strategies.
But this year, for the first time, the questionnaire asked companies about their board membership in trade and business associations and their donations to think tanks and other research organizations. Moreover, CDP asked companies whether or not they agree with the climate change positions of their trade and business groups and if they have attempted to influence those positions.
The Center for Science and Democracy at UCS is working with CDP to hold companies accountable to the climate change positions of their trade and business associations.
CDP Holds Companies Accountable on Climate Change
This is a significant ask and here’s why. Companies aren’t accustomed to having to share this information. For the most part, US companies can engage in political activities without much scrutiny from the government, their investors, or the public. Limited corporate disclosure laws, loopholes in our campaign finance system, and “outside spending” ensure this is the case. Those looking to find this information (as UCS did in A Climate of Corporate Control) are hard-pressed to find readily available data about companies’ political activity around climate change, especially the indirect political activities they engage in through trade groups and think tanks.
This is why I was ecstatic that CDP would be asking companies to voluntarily disclose their climate-related political activities. The questionnaire is voluntary, yes, but CDP isn’t just asking politely, they are backed by 722 institutional investors representing $87 trillion in invested capital. This is why it was surprising to me that many companies chose not to fully participate. For example, 97 of the Global 500 companies chose to opt out of participation in CDP reporting altogether. And this includes some big names like Apple, Amazon, and Facebook. Other companies choose to selectively answer questions in the survey or opt to make their responses non-public.
The Role of Voluntary Disclosure Programs
So why don’t these companies choose to participate? In any case, the newly released reports tell us that we still have a ways to go before companies are willing to be open about their political activities. If CDP continues to ask companies these questions, we may be able to shift toward a culture of greater transparency when it comes to companies voluntarily disclosing this information. If demands from investors, consumers, decision makers, and the public continue, we may be able to advance the conversation forward. For now, we need more efforts like CDP’s to push companies in this direction, especially on issues as urgent and as global as climate change.
Update, 9/25/13: The data previously featured in this post is embargoed until a further date. Stay tuned for future analysis on the CDP climate reporting data.