Wellington Management and Woodwell Climate Research Center launch P-ROCC 2.0 encouraging companies to disclose the physical location of assets and operations to help investors better assess climate risks
Boston, MA, June 10, 2021 – Wellington Management Company LLP (Wellington) and Woodwell Climate Research Center (Woodwell) today announced the launch of P-ROCC 2.0, an extension of the 2019 framework designed to help companies and their executive teams assess and disclose the potential effects of the physical risks of climate change (P-ROCC) on their business. P-ROCC 2.0 introduces the addition of disclosing the location of physical assets associated with company operations, a crucial step to better integrate climate considerations into investment decision-making processes.
Enhanced disclosure of physical locations is needed due to the limited information on the location of physical assets associated with company operations, which poses a challenge for climate-related analysis at the company level. Given the inherently geospatial nature of climate data that relates to physical locations, P-ROCC 2.0 advocates for more standardized and comprehensive location transparency to better understand the absolute and relative impacts of climate change at the company level.
To fulfill this need from investors, both public and private companies could disclose a complete list of all owned, leased, or otherwise-operated physical assets, at the address level, in a way that is publicly accessible, including in company 10-K filings, Task Force on Climate-related Financial Disclosures (TCFD) and sustainability reports, and via third parties, such as CDP. This relatively simple, yet all-too-often absent or incomplete information, will provide investors and other stakeholders with greater understanding of a company’s climate risks. Progress on this front will also help address existing and pending regulatory expectations, and, ultimately, assist with resilience planning associated with climate change.
Jean Hynes, incoming CEO of Wellington, said, “As we continue to expand our climate research, it is becoming increasingly clear that our investors and clients will benefit from deeper climate-related information at the company level. We encourage companies to facilitate access to their physical location data as this is a critical component that will help us incorporate deeper physical and transition risk climate analysis on behalf of our clients.”
Dr. Philip Duffy, president and executive director at Woodwell, noted that “sharing specific information about the precise location of physical assets is vital to accurately assessing climate risk and is a necessary component of transparent climate-risk disclosures. We believe this call to action further advances our goal of providing research that can positively influence how the private sector addresses the escalating threats caused by climate change.”
“At CDP, where we have advocated for and facilitated climate disclosure for 20 years,” said Emily Kreps, CDP’s global director, capital markets, “we view this call on companies to disclose owned and operated location data as an important step forward and we can work with stakeholders to help facilitate this. This added transparency will help stakeholders of all forms better analyze corporate climate risks.”
In addition to CDP, PROCC 2.0 is supported by nonprofit organizations Ceres and The Institutional Investors Group on Climate change (IIGCC), who advocate for enhanced climate disclosure.