Physical Risks of Climate Change (P-ROCC 2.0)
Call for location data
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.
P-ROCC 2.0 and the initial 2019 P-ROCC framework can be accessed on Wellington’s news site: https://www.wellington.com/en/wellington-news/
About Wellington Management:
Tracing its history to 1928, Wellington Management is one of the world’s largest independent investment management firms, serving as a trusted adviser to over 2,200 clients in more than 60 countries. The firm manages more than US$1 trillion for pensions, endowments and foundations, insurers, family offices, fund sponsors, global wealth managers, and other clients. As a private partnership whose only business is investment management, the firm is able to align its long-term views and interests with those of its clients. The firm offers comprehensive investment management capabilities that span nearly all segments of the global capital markets, including equity, fixed income, multi-asset, and alternative strategies. With more than 800 investment professionals located in offices around the world, Wellington pairs deep multidisciplinary research resources with independent investment teams operating in an entrepreneurial “boutique” environment. For more information, please visit www.wellington.com.
About Woodwell Climate Research Center:
Woodwell Climate Research Center is an organization of renowned researchers who work with a worldwide network of partners to understand and combat climate change. We bring together hands-on experience and 35 years of policy impact to develop societal-scale solutions that can be put into immediate action. Our Falmouth, MA headquarters are located on the traditional and sacred land of the Wampanoag people who still occupy this land, and whose history, language, traditional ways of life, and culture continue to influence this vibrant community. Woodwell Climate has earned Charity Navigator’s highest rating of 4 stars, as well as a Gold Seal of Transparency from GuideStar. Follow us on Facebook, Twitter and Instagram or subscribe to our monthly newsletter.
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 590 investors with over $110 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 10,000 organizations around the world disclosed data through CDP in 2020, including more than 9,600 companies worth over 50% of global market capitalization, and over 940 cities, states and regions, representing a combined population of over 2.6 billion. 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. Visit cdp.net or follow us @CDP to find out more.