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IMPORTANT INFORMATION
All data as at 31 December 2024, unless specified otherwise. This document is issued for information purposes only. It does not constitute the provision of financial, investment or other professional advice. We strongly recommend you seek independent professional advice prior to investing. The value of investments and the income derived from them may fall as well as rise. Investors may not get back the amount originally invested and may lose money. Any forward-looking statements are based on CCLA’s current opinions, expectations and projections. CCLA undertakes no obligations to update or revise these. Actual results could differ materially from those anticipated. All names, logos and brands shown in this document are the property of their respective owners and do not imply endorsement. These have been used for the purposes of this document only. CCLA Investment Management Limited (a company registered in England and Wales with company number 2183088), whose registered address is One Angel Lane, London EC4R 3AB, is authorised and regulated by the Financial Conduct Authority.
result
Better Health
Air pollution
Air pollution
‘The single biggest environmental threat to human health.’
(World Health Organization, 2022)
Marshmallow Sunset, HM Prison & Young Offender Institution Grampian | Courtesy of Koestler Arts
In early 2024, we embarked on a new project aimed at tackling corporate air pollution. Inspired by ShareAction’s work on air quality, and with clear evidence of the human and environmental damage caused by poor air quality, we joined forces with Guy’s & St Thomas’ Foundation and set out to create a mechanism for examining company preparedness and resilience to the impacts of urban air pollution.
The case for action
The case for action
There have been enormous improvements in air quality in Global North countries since the 20th century through regulatory intervention and evolution of economic structures away from industrialisation. Despite this, air pollution levels remain harmful in virtually all countries: 99% of people worldwide breathe air that exceeds World Health Organization (WHO) limits for key pollutants.
What is air pollution?
Air pollution is defined as contamination of the indoor or outdoor environment by any chemical, physical or biological agent that modifies the natural characteristics of the atmosphere. It is ‘the single biggest environmental threat to human health’ and poses significant challenges for the environment and the economy.
Air pollution and climate change are inextricably linked: it is estimated that reducing PM2.5 (tiny particles of air pollution) emissions in line with WHO guidelines would achieve a 27% reduction in greenhouse gas emissions.
Poor air quality damages human, environmental and economic health in the following ways:
Human health:
- Pollution is responsible for approximately nine million deaths per year, corresponding to one in six deaths worldwide.
- It is also a major risk factor for non-communicable diseases including cardiovascular and respiratory diseases, type 2 diabetes, cancers and neurological diseases.
The environment:
- Air pollution is an invisible and pervasive threat to biodiversity and to both terrestrial and aquatic ecosystems worldwide.
- Ground-level ozone damages vegetation and agricultural crop yields, while sulphur can lead to excess levels of acid in lakes and streams, damaging trees and soils.
The economy:
- Air pollution-related ill-health results in 1.2 billion lost working days annually. This number is projected to reach 3.7 billion by 2060.
- The global cost of health damages from outdoor air pollution was estimated to be $8.1 trillion in 2019, an economic value equivalent to 6.1% of global gross domestic product.
Air quality is a sustainability blind spot for investors. When compared to climate risks, it is under-represented in corporate disclosure requirements relative to its impact on society.
That said, an increasing number of key reporting standards now require companies to disclose emissions of air pollutants. These include the Global Reporting Initiative, the World Benchmarking Alliance, the Taskforce on Nature-related Financial Disclosures, India’s Business Responsibility and Sustainability Reporting and the European Union’s Corporate Sustainability Reporting Directive.
Acting for change
Acting for change
Our aim is to mobilise the investment industry into action on this underserved topic and to accelerate corporate efforts to measure, disclose and reduce emissions of toxic pollutants into the air. Successful implementation will bring about positive outcomes for people and for the planet and help to improve the long-term resilience of the companies in which we invest.
Reducing air pollution to WHO recommended levels in the UK could…
Regain
0
m
working days annually
Reclaim
£
0
bn
annually for the economy
Save
£
0
m
in wages each year
Prevent
0
premature deaths a year
During 2024, CCLA and Guy’s & St Thomas’ Foundation joined forces to commission a scoping review by Chronos Sustainability to explore the role of investors in tackling corporate air pollution. The outcome of this review is a proposal to develop a global benchmark to assess company preparedness and resilience to the impacts of urban air pollution.
Specifically, the proposed benchmark will:
- define investor expectations of companies involved in urban road transport
- drive increased transparency and disclosure by companies on air pollution
- provide investors with an accessible way to understand and evaluate corporate practices
- showcase examples of good practice in corporate management of air pollution for the benefit of investors and companies.
In November 2024, we launched a public consultation to test our proposed approach. The consultation closed on 17 January 2025 and we will report on the outcomes.