Avaron pushes for environmental transparency in Emerging Europe
Avaron today joins CDP’s 2022 Non-Disclosure Campaign together with 263 institutional investors from nearly 29 countries in urging companies with a significant environmental impact to disclose data through CDP, the global non-profit that runs the world’s leading environmental disclosure system. Over 1,400 of the world’s highest impact companies will be engaged in this campaign. These companies cover over €23 trillion (as of 22 June 2022) in global market capitalization and are estimated to collectively emit more than 4,800 megatonnes (Mt) of carbon dioxide equivalent (CO2e) annually. The campaign aims to increase environmental disclosure among companies that have either never disclosed, or stopped disclosing, through CDP. We are participating in the campaign for the fifth consecutive year and once again take the lead investor role in Emerging Europe region, engaging with our portfolio companies on behalf of all campaign signatories.
Focus on environmental issues
Climate change, deforestation and water security have become material issues to many industries and consistent, comparable data is key to addressing the associated risks and opportunities. We believe that increased corporate transparency on environmental impact is a key enabler to improve company performance and create a more resilient economy. The campaign offers a unique opportunity to draw the attention of corporates we invest in towards critical environmental issues. In 2021 we engaged with 7 companies on climate change and it resulted in 1 responding to CDP’s questionnaire. On deforestation we engaged with 1 company but without immediate success. On water security we engaged with 3 companies resulting in one of them responding. In 2022 we have already started engagements with 4 companies on climate change and water security topics.
Engagement success: Titan Cement (Greece)
An example of where we have achieved significant positive results via long-term engagement on environmental topics is Greek cement producer Titan. It has been one of our core holdings across almost all Emerging Europe portfolios. Given inherent high level of carbon emissions of cement production we approached the company back in 2018 requesting improved disclosure and setting carbon reduction targets. We continued to follow up on the topic on regular basis, also targeting the company as lead investor within the scope of a few CDP Non-Discloser Campaigns. For 2020 Titan started to report on the CDP platform and by now the company has committed to 2050 net-zero with 2030 mid-term reduction targets validated by the Science Based Targets Initiative. Furthermore, we have also engaged with them on water disclosure, also stemming from its industry specifics. As a result Titan has started to disclose its water footprint on the CDP platform. In December 2021, the company was recognized by CDP as a global climate leader for its transparency, climate actions and transition to a net zero carbon economy. With an A- score, Tital Cement was ranked in the top 15% of publicly disclosing companies globally, being one of only five cement sector companies out of 27 to achieve this level.
CDP stands for increased environmental disclosure
CDP is a global non-profit that runs the world’s environmental disclosure system for companies, cities, states and regions. Founded in 2000 and working with more than 680 investors with over €120 trillion in assets, CDP pioneered using capital markets and corporate procurement to motivate companies to disclose their environmental impacts, and to reduce greenhouse gas emissions, safeguard water resources and protect forests. Over 14,000 organizations around the world disclosed data through CDP in 2021, including more than 13,000 companies worth over 64% of global market capitalization, and over 1,100 cities, states and regions. Fully TCFD aligned, CDP holds the largest environmental database in the world, and CDP scores are widely used to drive investment and procurement decisions towards a zero carbon, sustainable and resilient economy. CDP is a founding member of the Science Based Targets initiative, We Mean Business Coalition, The Investor Agenda and the Net Zero Asset Managers initiative.