Investors Spend US$1.3m to Assess Firms’ Climate Risks

Institutional investors typically spend US$1,372,000 annually to collect, analyse and report climate data to inform their investment decisions, according to a new survey. The poll, conducted by sustainability consultancy ERM for US investor network Ceres and Persefoni, a SaaS-based climate management and accounting platform, also found that corporate issuers spend US$533,000 per year to produce climate-related disclosures – almost exactly in line with the US$530,000 estimated by the Securities and Exchange Commission as the cost of compliance with its proposed climate disclosure rule. Asked to rate the potential benefits of climate-related disclosures and impact assessments, investor respondents ranked meeting client demand for climate disclosures highest, followed by better performance in meeting sustainability, climate, ESG and SDG goals. Investors spent most on external ESG ratings, data providers and consultants (US$487,000 per year), in-house / outside counsel, and proxy solicitor analysis of shareholder voting related to climate reporting (US$405,000), and internal climate-related investment analysis (US$357,000).

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