Companies that have been in dialogue with investors are more than twice as likely to disclosure their sustainability data than unengaged firms, the CDP’s Non-Disclosure Campaign (NDC) results report has shown.

The campaign, which was supported by 288 financial institutions in 2023, directly engaged with 1,590 companies from a list of non-disclosing corporates, requesting that the companies disclose their climate, forest and/or water impacts through CDP.

Overall, 317 companies disclosed after engagement by investors, comprising of 221 (19.5 per cent) companies disclosing on climate change, 58 (14 per cent) on forests, and 66 (14.3 per cent) on water security.

Companies that were engaged with were 2.2 times more likely to disclose data than the control group of 4,421 firms that did not participate in the campaign.

Those targeted by the NDC were 6.8 times more likely to disclose on forests, while companies in Europe and Asia (excluding Japan) engaged by investors were three times more likely to disclose data.

CDP stated that direct engagement was vital and the campaign could be a catalyst for long-term change, and that persistence from financial institutions brought results.

Commenting on the findings, CDP associate director, UK capital markets, Sebastian O’Connor, said: "As we delve into the progress achieved through the 2023 CDP NDC, a critical takeaway is that persistent direct engagement continues to play a vital role in fostering transparency and accountability on environmental impact.

“Although CDP sent a massive disclosure request to more than 15,000 corporates on behalf of 740+ signatories in April 2023, this indirect request to disclose can only go so far.

“For companies reluctant to produce fulsome and transparent environmental disclosures according to a standardised framework, we must work directly with our signatories to push for action.”

Danish pension company and NDC participant, Sampension, noted that companies were significantly more likely to publish data after engagement. Sampension head of ESG, Jacob Ehlerth Jørgensen, commented: "As an investor, we must of course contribute to companies moving in a more responsible direction.

“But in order for us to be able to relate to the companies' behaviour, we first need to have proper data, and here it is far from all companies that report on their own initiative.

“In this connection, initiatives where investors engage in dialogue with the companies to bring the relevant data to light have proven to be an effective tool, and that is a positive thing to say the least.

"However, as the figures from the campaign also show, there are still many companies where there is room for improvement when it comes to transparency around data.

“But here it is important to understand that the dialogue path is not a quick-fix solution that creates changes in companies overnight.

"It shows that it takes patience and persistence to push companies in a more responsible direction. But our experience is also that, as an investor, you can generally make a bigger difference in companies through dialogue and active ownership than by simply selling.”

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