Axa lauded over climate disclosure but insurers still falling short says CDP

The world’s banks, asset managers and insurers should provide more information to investors about the greenhouse gas emissions from the activities they finance, according to an emissions data specialist.

CDP, which maintains a system used by both the private and public sector to voluntarily disclose emissions data, has published a report which emphasises the need for better data disclosure from finance companies.

Indeed, worst-performing is the insurance industry, CDP said, with just 27% of companies the group had assessed providing plans to achieve the climate goals through their portfolios.

It said that of 332 companies to respond to its climate questionnaire, just 84, including insurer Axa and banks HSBC and BNY Mellon, had disclosed the emissions from their lending, underwriting or investment portfolios.

Of those that did disclose this information, many under-reported it.

Forty-seven of the 84 companies included information related to less than 50% of their financed emissions, the group found.

Clients funded by financial service firms are responsible for 700 times the emissions of the firms themselves, CDP said, explaining why it was important for banks and insurers to understand the impact of client activities as well as their own.

“For financial institutions that do not currently measure their financed emissions, the message from this flagship report is clear – they must start doing so, now, to understand their overall climate impact and the risks they face,” said Emily Kreps, global director of Capital Markets at CDP.

The report comes as more financial services firms sign up to reach net-zero carbon emissions by mid-century.

Fewer than half of the companies assessed by CDP were moving to align their investments with the goal of the Paris Agreement on climate, to cap the global temperature increase at well-below 2 degrees Celsius above pre-industrial norms by 2050.