Energy Efficiency, GHG Emissions  -  February 10, 2023

CDP Data: Companies Moving Slowly on Climate Disclosure

New data from the CDP shows that companies are recognizing the need for climate transition plans but are not moving fast enough amidst incoming mandatory disclosure.

CDP,  a global environmental disclosure platform, launched a report analyzing disclosure from 18,600+ companies across 13 industries in 135 countries. The report assesses climate transition plan disclosure against 21 key indicators within CDP’s climate change questionnaire and found that only 81 companies (0.4%) disclosed to all relevant. 

In the 2021 assessment, there were 135 companies that disclosed against all relevant indicators. The reduction this year is based on CDP raising the bar on what constitutes a credible climate transition plan. 

CDP’s report shows the majority of disclosing companies don’t have a credible plan to transition to net zero. 

The report highlights that there is progress from companies as 2,300 (13%) disclosed between 14 and 20 key indicators, demonstrating they are on their way to disclosing a credible climate transition plan, and 6,520 (35% of total companies that disclosed) reported they will develop a transition plan within two years.

Only 24% of disclosing companies had governance structures in place to manage climate transition plans, however, only 3% of companies provided relevant, forward-looking financial details to support a climate transition and only 7% disclosed a sufficient strategy to achieve net-zero.

The report shows that companies are behind in climate action as well as preparedness and are underprepared for the wave of incoming regulation from the European Union and the UK Transition Plan Taskforce (UK TPT) and Securities Exchange commissions (SEC). 

“The need for companies to develop a credible climate transition plan is not an additional element but an essential part of any future planning. Companies must evidence they are forward planning in order for us to avert the worst impacts of climate change and to send the correct signals to capital markets, that they will remain profitable,” Amir Sokolowski, Global Director, Climate at CDP says in a statement. 

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