Some of the largest players in the sustainable investing market are reviewing their relationships with FTI Consulting, a business advisory and public relations firm, after a US media report highlighted controversial work it has done on behalf of the oil industry.
CDP, a non-profit group formerly known as the Carbon Disclosure Project which collects climate data from companies, has suspended its business with FTI until it completes an investigation into the New York Times story.
“We are taking this very seriously,” CDP told the Financial Times. “We will be reconsidering our relationship with FTI in light of this report.”
According to the New York Times, FTI has run a number of operations for oil groups that raised ethical red flags — including creating a fake Facebook profile to monitor activists’ activities and running industry-backed pro-fossil fuel campaigns with names like “Texans for Natural Gas” and the “Main Street Investors Coalition” made to look like grassroots initiatives supporting the interests of concerned citizens.
Morningstar, which owns Sustainalytics, a top provider of environmental, social and governance data and ratings, also works with FTI and is looking into the report. Morningstar has “not seen evidence of or experienced unethical work” in its dealings with FTI, but is reviewing the company’s policies and internal practices.
MSCI, the other top ESG rating agency and a client of FTI, is “still assessing the situation”.
FTI said the New York Times report “grossly mischaracterised” the services it provides to the oil sector.
Groups such as Sustainalytics and CDP have grown in influence as more investors have sought to measure the environmental, social and governance policies of companies and, increasingly, to direct their investment to those that score highly.
At the same time, asset managers are factoring ESG considerations into their investment decisions and pressing companies to improve their practices.
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As well as its work for the large players in the sustainable investing market, FTI has also advised fossil fuel companies on how to respond to the ESG agenda.
The company recently launched an ESG advisory programme for the Independent Petroleum Association of America (IPAA) — a trade group that backed the Trump administration’s rollback of environmental protection laws such as those designed to curb methane emissions.
During a webinar last month, FTI gave IPAA members tips on boosting the ESG scores they receive from companies like MSCI and Sustainalytics.
FTI also collaborated with the IPAA on a website called “Energy in Depth”, which publishes information and news supportive of the oil industry and critical of environmental groups.
FTI said in a statement: “We are proud of and committed to our ESG and sustainability offering, which is led by a large group of diverse and multidisciplinary experts who provide highly effective counsel to clients in a myriad of industry sectors and countries around the world.”