Almost 30,000 corporates didn’t respond to environmental disclosure requests from CDP this year
CDP has revealed its annual ‘A-Lists’ of corporates leading on environmental disclosures for 2022, but noted that almost 30,000 large businesses, collectively worth $25trn, have failed to answer its requests for information.
The ‘A-Lists’ recognise the businesses that are leading the way in terms of disclosing and reducing their climate, forest and water impacts. More than 18,700 businesses report information on at least one of these topics through the CDP platform.
Some 330 of these businesses are on the ‘A-Lists’ for 2022. Promisingly, CDP has rated more than 280 companies as A-listers on climate-related disclosures, marking a 34% increase year-on-year. This was despite the implementation of more stringent scoring on whether corporate emissions targets were 1.5C aligned and whether businesses were drawing up robust climate transition plans.
The majority (76%) of companies on the climate A-List have an approved science-based target to cut emissions and 95% have a climate transition plan outlining the steps they must take to enable the delivery of a 1.5C world, and how this transition will impact their business.
Yet CDP has highlighted that there is still a lot more work to be done. There was only a 4% increase in the number of forest A-List companies this year and the number of water security A-Listers actually decreased from 118 in 2021 to 103 this year. Only 1.3% of the companies asked to disclose climate, forests and water-related information received a mention on all three A-Lists. Triple A-listers include Nivea owner Beiersdorf, packaging firm Tetra Pak and Molton Brown’s parent company, the Japanese health and beauty multinational Kao.
Another cause for concern is that many firms do not seem to be improving environmental transparency as a priority, nor taking action to decrease their negative environmental impacts or environment-related risks. Two-thirds of the companies that scored from D- to A- in CDP’s 2021 rankings did not improve their scores his year.
Moreover, CDP has continued to highlight that the majority of the private sector is not using its disclosure platform. Companies reporting through CDP are collectively valued at around $11trn. The organisation has asked a further 29,500+ businesses to make disclosures, with these businesses collectively valued at around $25trn.
CDP has noted that demand for environmental disclosures is increasingly coming from key stakeholders, including customers, investors and purchasers. In 2022, more than 680 investors with over US$130 trillion in assets and 280+ large purchasers with US$6.4 trillion in buying power requested data through CDP.
CDP’s global director of corporations and supply chain Dexter Galvin said: “Environmental disclosure is the first vital step towards a net-zero and nature-positive future, so A-List companies should be commended for the level of transparency in their CDP responses.
“But we cannot ignore that these companies are in the minority. Most are still not managing all environmental issues holistically, and far too many are remaining complacent or failing to respond at all. Companies must step up to the challenge as CDP continues to lift the bar for what qualifies as environmental leadership, and since there is no route to 1.5C without nature, they must speed and scale up their progress in addressing deforestation and water impacts, dependencies and risks, too.”
Nature disclosures on the horizon
To Galvin’s point about nature, the UN is currently convening negotiators in Montreal, Canada, for its 15th biodiversity COP. The aim is to create a ‘Paris-Agreement-style’ global treaty for nature that will run through to 2030, with a headline mission of ending nature degradation and loss.
One of the proposed measures of the treaty is mandatory nature-related disclosures for companies. Negotiators will need to decide on the scope of the mandate, including business size and sector. More than 330 businesses are collaboratively advocating for a strong agreement.
Disclosures of this nature are already mandatory for certain large businesses in the EU. But this is currently the exception to the norm in terms of policymaking globally. And, as CDP’s forests data has shown, most large businesses are not voluntarily measuring and disclosing their nature-related impacts and risks.
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