GPIF External Managers Rank Microsoft, Enel Tops for Climate Disclosure

Asset managers for Japan’s Government Pension Investment Fund rated Microsoft Corp. and Italian energy company Enel SpA. best among portfolio companies regarding their reporting of Task Force on Climate Related Financial Disclosures.

The $1.68 trillion pension giant asked the 24 external asset managers overseeing its foreign equity investments to nominate portfolio companies they deem having “excellent TCFD disclosure.” Seventy-nine companies were chosen by at least one asset manager.

Only 15 companies were nominated by at least two external asset managers. Microsoft led all companies, nominated by eight asset managers, one-third of the asset managers polled. Enel was nominated by six asset managers. The only other companies nominated by more than two asset managers were Nestlé S.A. and mining company Rio Tinto Group, each of which garnered three nominations.

The remaining 11 companies nominated by two asset managers were Canadian National Railway, Compagnie de Saint-Gobain S.A., Citigroup Inc., Ford Motor Co., General Motors Co., HSBC Holdings PLC, JPMorganChase & Co., Nextera Energy Inc., Royal Bank of Canada, SSE PLC and Walmart Inc.

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“MSFT is undoubtedly a leader on climate reporting with technical, detailed assessments of MSFT’s risks and opportunities across various climate scenarios,” stated a GPIF report about the survey. the pension fund also praised Microsoft for its “extensive TCFD report,” which “provides great detail on how they intend to address climate related risks and opportunities,” adding that Microsoft also discloses how it intends to manage water-related risks and opportunities.

“It gives special attention to water, outlining the company’s processes for identifying and assessing climate and water-related risks and opportunities, as well as the details of its internal water pricing,” the report stated.

The GPIF praised Microsoft’s TCFD report because it outlines the company’s climate-related governance structure, as well as the responsibilities of individual roles and sub-teams. The report also covers its quantitative analysis of physical climate-related risk exposure of approximately 1,400 global assets, according to the GPIF.

“In our view, the company is one of the most advanced in the market in terms of the scope, ambition and transparency of its climate metrics and targets,” the report stated.

The GPIF also lauded Enel for publicly committing to implementing the TFCD recommendations and for using climate-scenario planning to test its strategic and operational resilience. “The company has conducted a climate-related scenario analysis including quantitative elements and disclosed its results,” the report stated. “The quantitative scenario analysis explicitly includes a 1.5°C scenario, covers the entire company, discloses key assumptions and variables used, and reports on the key risks and opportunities identified.”