Church Investors Group: Engaging with Investor CDP non-responders


Engagement conducted over the past three years by CCLA and EIRIS for the Church Investors Group (CIG) has been shown to have helped 32 FTSE250 companies improve their CDP Performance Grade. Analysis by the University of Edinburgh Business School has revealed that companies contacted by CIG were more likely to improve their CDP Performance Grade than those that were not. This finding was significant to a 95% confidence level.

Over the duration of the project the engagement targeted FTSE250 constituent companies, with the exception of those in the Financial Services sector, who had not yet scored a ‘C’ CDP Carbon Performance Grade. To enable the academic analysis these companies were split into an ‘engagement group’ and a ‘control group’ with whom the CIG did not engage.

After three years of results, the CIG saw on average twice as many companies in the engagement group, compared to the test group, improve their Grade. Further analysis, conducted by Dr. Tatiana Rodionova, also shows that the average improvements made by these companies were greater. The results are consistent when looking at year-on-year improvements and looking at the three-year engagement overall.

Andrew Adams of CCLA, who led the engagement on the CIG’s behalf, concludes: "We’re pleased that these companies are making progress in assessing and mitigating their climate change impact. All companies have a part to play in the transition to a low carbon economy. We believe these results show that, when focussed correctly, investor engagement can and does work".



The Church Investors Group is the membership body for 57 institutional church investors with collective investment assets over £15 billion. As church investors many CIG members have long recognised that they have both a financial and an ethical obligation to take steps to accelerate the transition to a low carbon economy.

Whilst each member is responsible for developing their own policies and practices they are working to this goal in a number of ways. Our members have taken steps to actively integrate climate change factors into their investment portfolios, they support the Institutional Investors Group on Climate Change to build a strong voice pressing policy makers, and they believe in the power of corporate engagement.


Example of CIG Engagement across the FTSE350: CDP Laggards

There are many CIG members among the 822 investor signatories of CDP’s Climate Change programme, and the group has been in conversations with companies about improving both their carbon disclosure and carbon reduction strategies for over a decade. They are therefore familiar with the CDP process; understand the value of disclosure through CDP and recognise the power of CDP data to help make informed investment decisions. They welcomed the introduction of the CDP Performance Grading system over the last few years: giving each respondent an easily comparable grade (devised from a transparent and rigorous methodology) has proved an effective means to encourage companies to take further action on mitigating climate change.

In addition to providing the secretariat to the CIG, CCLA has been engaging with CDP laggards on behalf of the CIG for several years. Andrew Adams, Analyst: Ethical and Responsible Investment, explains how the performance grade has been integrated in to their engagement work with CDP laggards in the FTSE 350:

"Throughout the last three years we’ve continued our approach of engaging with companies across the market, seeking to lift all boats on a rising tide. We felt that, as the largest companies in the UK, all FTSE100 companies should be leading the way by taking action to lower their carbon footprint and demonstrating this by achieving at least a C grade performance score in their CDP response (Only 66% of the FTSE100 did so in 2012). To achieve a C grade a company must disclose a significant amount of information in their response to the CDP and be able to demonstrate positive action on climate change (for example setting and meeting companywide carbon reduction targets).

For FTSE250 companies at the beginning of the programme a decision was taken to start by focusing specifically on companies in the carbon intensive sectors (energy, utility, materials, and industrial companies). But each year, as we had more capacity due to previous success in raising standards, we expanded this. In 2014 we talked to the consumer discretionary sector as well and in 2015 the engagement covered everyone except companies in the financial sector.

All of the FTSE 100 and FTSE 250 companies we identified as laggards were sent letters early on each year at the beginning of the CDP Reporting Cycle. These were addressed to senior management and investor relations teams were also copied in. Those that didn’t respond to the CIG initially were followed up during the spring. In total we contacted 63 companies in 2015 and of these 51% showed some improvement in their response; the majority of these moving up at least one carbon performance grade. This year eight companies reached the C grade we requested and nine companies we spoke to submitted their first response to CDP.

However the most interesting part of the engagement programme for the FTSE 250 companies was that Dr Rodionova at the University of Edinburgh Business School split the companies into two similar groups, an engagement and a control group. She was then able to use statistical tests to see whether there were significant differences between the group of companies that we spoke to and a similar group that we had no contact with. This showed to a 95% degree of confidence that the engaged companies achieved better CDP results”

Specifically, the analysis conducted by Dr Rodionova showed that nearly twice as many companies contacted by the CIG improved their disclosure score and three times as many companies improved their performance grade compared to the control group. This suggested that had the CIG not conducted the engagement programme 13 fewer companies would have improved their CDP performance grade. Improvements were particularly marked in companies that had not previously completed the CDP Climate Change Questionnaire. Among this subset of companies, almost three times as many companies in the engagement group improved their performance grade compared to the control group.

All the above results were analysed using non-parametric tests; in particular, given the small sample in some of the tests, both Chi-square and Fisher’s Exact Test were employed. The main results were statistically significant (with p<0.05) using either test. It is worth noting that, given that results could be sensitive to the small sample, the design of the experiment ensured that the test group included similar or, if necessary, more difficult cases than the control group.


Benefits: Robust and more transparent investment portfolios

Through the use of CDP data CIG members have been able to both compare companies to their peers and comprehensively track improvements in practices. Andrew concludes,"We’re pleased that these companies are making progress in assessing and mitigating their climate change impact. All companies have a part to play in the transition to a low carbon economy. We believe these results show that, when focussed correctly, investor engagement can and does work".

More details of the CIG members' approach to engagement are available in the Group's Guide to Corporate Engagement.

  © 2016 CDP Worldwide, Registered Charity no. 1122330.
A company limited by guarantee registered in England no. 05013650