Pension funds will benefit from reduced climate risk exposure as a growing number of the world's largest companies commit to addressing their carbon footprint.
Almost a quarter (23%) of companies have targets to move away from fossil fuels in energy consumption, while almost all (98%) have designated climate risk as a board or senior-management responsibility.
The Carbon Disclosure Project's (CDP) annual analysis for 2017 further found another one in seven have agreed to set science-based targets to reduce emissions, while a separate three in ten plan to do so within two years.
Across its sample of 1,073 companies, it now estimates the firms are 31% of the way to ensuring the global temperature does not rise above two degrees Celsius above pre-industrial revolution level if the targets are met.
The findings will be of comfort to pension fund trustees and investment managers seeking to boost allocation to companies with strong environmental, social and governance (ESG) performance, especially where they seek to reduce climate risk exposure.
CDP chief executive Paul Simpson said improving environmental disclosure was informing better decisions and driving action.
He added: "The transition to a low-carbon economy will create winners and losers within and across sectors. As new businesses and technologies emerge and scale up, billions of dollars of value are waiting to be unlocked, even as many more are at risk."
The CDP's analysis - Picking up the Pace - also found 89% of companies have emissions reduction targets for this year, while one in five have longer-term targets to 2030. These have improved from 85% and 14% respectively since last year.
It also found 90% have financial incentives in place to promote companies meeting their ESG targets, while 97% have integrated climate change into their business strategy.
It highlighted Unilever and L'Oréal as two companies leading the way on climate issues, particularly in response to climate change, water security, and tackling deforestation, while continuing to record profits.
Other companies on the 159-member "A-List" included Sky, Sony, Sainsbury, and Diageo.
Insight Investment ESG analyst Joshua Kendall said the related disclosures will help asset managers act efficiently on behalf of their pension clients.
"It is encouraging that more companies are paying attention to carbon emissions targets," he said. "This reflects the increased scrutiny from investors on how companies are reporting their emissions strategies and moving towards a lower carbon impact.
"Insight is acting on behalf of its clients to make use of company ratings and carbon emissions data. It's about identifying risky issuers or sectors, which is important for managing credit risk. As part of Insight's sustainable corporate bond strategies, we tilt portfolios away from those issuers that are not fulfilling their environmental responsibilities."
The analysis comes as the Principles for Responsible Investment (PRI) warned up to 200 asset managers and asset owners, including pension funds, could lose their signatory status. The organisation is aiming to reduce "greenwashing" - where firms sign up to the principles but pay just lip service to them - by enforcing mandatory standards from 2020.
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