First it was Tesla’s exclusion from a major S&P environmental index. Now the electric-vehicle pioneer is called out by watchdog CDP to come clean on its climate-change impact.
Nonprofit environmental disclosure body CDP has launched its latest annual campaign in which large investors who sign on to the group directly challenge companies to publish data about their environmental impact.
This year’s release says stock market giants as seemingly varied as Tesla TSLA, -3.75%, Exxon Mobil XOM, -2.96% and Saudi Aramco 2222, +3.32% are among the companies being targeted. A full list of the companies can be found here.
In all, the companies named add up to over $24 trillion in global market capitalization and are estimated to collectively emit more than 4,800 mega metric tons (Mt) of carbon dioxide equivalent (CO2e) annually.
In fact, CDP said this year’s push for greater greenhouse gas emissions, deforestation and water use disclosures among the world’s corporate leaders has attracted record levels of participation by investors. Some 57% more financial institutions are taking part than in 2021. The number of participants had also doubled the year before from 2020, CDP said.
The nonprofit said 263 global investors it counts as members, and representing over $31 trillion in assets, were demanding disclosure from more than 1,400 “high impact” companies via the 2022 disclosure campaign.
“Engagement is critical to driving disclosure, and disclosure is the first step to environmental action,” Laurent Babikian, CDP’s joint global director of capital markets, said.
For Tesla, it’s the second time this year that a slight has emerged from a climate-friendly source.
Tesla’s early-to-market feat with its luxury EVs wasn’t enough to protect its stock from being knocked out of one of mostly widely followed environmental, social and governance (ESG) indexes: the S&P 500 ESG Index.
Overall, Tesla’s electric vehicle standing doesn’t offset discrimination claims, autopilot crashes and other factors, S&P said at the time. In response, Tesla CEO Elon Musk said S&P Global Ratings “has lost their integrity.”
Related: Elon Musk called ESG a scam — did the Tesla chief do investors a favor?
Tesla’s EVs are essentially zero-emission to operate, earning the carmaker environmental high marks and a large following, but the company historically has been mum on its overall energy use, transportation emissions and other factors. That may soon change if proposed Securities and Exchange Commission emission-reporting rules advance.
Read: Tesla’s Model Y and the rest of the ‘most American-made’ cars and SUVs
Babikian added that climate change, deforestation and water security presented material risks to investments, and that companies failing to disclose their impact risked trailing competitors in their access to capital.
“With a series of mandatory environmental disclosure requirements on the horizon in regions including the U.S., U.K., Japan, EU, New Zealand and India, non-disclosure will no longer be an option for many of these companies,” Babikian said.
Some companies are tagged by CDP for only supplying partial data. General Electric Co.GE and Italy’s GeoxIT:GEO, for instance, are among the list of companies that were targeted because they only disclose water-related data. Similarly, Toyota MotorJP:7203 was called out because it only disclosed forest-related information.
This year, CDP said, 72% of companies in the campaign were being asked to disclose at least their impact on climate change, but added that there had been a marked increase this time around in the number of firms being asked to report their water and forests-related impact compared to last year.
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