Investors call for private firms to disclose more environmental data

  • 9/8/2021
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LONDON, Sept 8 (Reuters) - Investors managing $2.3 trillion in assets on Wednesday called for more than 1,000 private companies to provide environmental data through non-profit disclosure platform CDP to address a gap in transparency with their listed peers. CDP said the group, including Neuberger Berman and Nuveen, had helped create a questionnaire for private firms that would be used to benchmark them - a crucial step as they increasingly snap up high-carbon assets from listed companies. Those deals, such as oil major BP"s (BP.L) $5.6 billion sale of its Alaska Oil and Gas business to Hilcorp Energy, risked hindering investors" handling of climate change risks given private firms" reduced reporting requirements, the group said. Other investors to back the initiative, dubbed the Private Markets Pilot, include M&G (MNG.L), Beach Point Capital, Coller Capital and Intermediate Capital Group (ICP.L). The project comes as record amounts of capital are put to work in private equity and debt markets by investors. Private equity net asset value has grown three times as fast as public markets since the turn of the century, the group said. "Encouraging more private companies to actively measure and disclose their carbon impacts - and also their water and possible deforestation impacts - is no longer a nice to have - it is essential to the low carbon transition," said Adam Black, Partner and Head of ESG & Sustainability at Coller Capital. "Moreover, it will better enable investors to make much more informed investment management decisions when it comes to the private markets." Claire Elsdon, Joint Global Director of Capital Markets at CDP, said the data from private companies was crucial to ensure investors could meet their own commitments to reach net-zero emissions across their portfolios by 2050. "This pilot is essential to avoiding “emissions leakage” between asset classes such as public companies selling high-carbon intense assets to private companies in a bid to avoid scrutiny and transparency," she added.

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