Climate Disclosure D-Listers Underperform the Market

The climate disclosure D-list has proportionately more losers and fewer winners than the A-list

This week the Climate Disclosure Project (CDP) released its 2019 company ratings. The largest companies in the world are rated from A to D- based on their reports to CDP. This story compares the stock returns of A-listers and D-listers. While the A-list performs in line with the broader market, the D-list significantly underperforms.

While the A-list performs in line with the broader market, the D-list significantly underperforms.

Background

CDP is a not-for-profit organization which runs the global corporate environmental disclosure system. Over 8,400 companies report to CDP. Company scores reflect their position on a “journey through disclosure to awareness, management, and finally to leadership”, according to CDP. The journey is reflected in the following grading schema:

A and A- | Leadership level
B and B- | Management level
C and C- |Awareness level
D and D- | Disclosure level
F | Failure to provide sufficient information to be evaluated