CDP: Companies worth half of global market cap are now disclosing environmental data
Non-profit CDP has revealed that a record 10,000 companies, cities, states and regions have reported environmental data during 2020, making it a record year for disclosure.
Of the organisations reporting to CDP, more than 9,600 are businesses. Collectively, these firms account for more than half of global market capitalization. Sectors represented include retail, mining, transport, agri-food and heavy industry.
CDP believes the sharp uptick in disclosures from companies – figures are up 14% year-on-year and 70% against 2017 levels – is partly attributable to pressure from investors. It has received requests for information from 515 investors with $106trn in assets under management collectively during 2020.
One survey last month found that one in five investors are prioritizing impact investment in light of Covid-19. While initial moves will funnel money into initiatives designed to improve public health and social sustainability, a long-term focus on climate is likely to emerge. Investor groups, meanwhile, have issued stark warnings to sectors like aviation and animal agriculture in recent months.
CDP also believes that the climate activism from the general public and from governments, which was well underway pre-pandemic, has weathered the storm of 2020.
“We launched CDP two decades ago from a small basement office in the City of London, with the ambition of transforming capital markets to address the climate crisis,” CDP’s chief executive Paul Simpson said. “Environmental accountability was a nascent concept back then and ESG information was threadbare.
“We have seen very strong momentum this year in corporate disclosure despite the extremely challenging year we have all had with Covid-19. However, as we look ahead to 2030, I am acutely aware of the urgency with which we need to act, and unfortunately, the climate and ecological emergency remains. We have a choice, and if every company, investor, city and government becomes aware of the risks and prioritises taking action, we can create the sustainable future that we all want and need.”
The update from CDP, made to mark the organisation’s 20th anniversary, comes in the same week that the UK Government unveiled new plans to mandate climate risk disclosure from large businesses.
Speaking at the Green Horizon Summit on Monday (9 November), Chancellor Rishi Sunak highlighted the Financial Conduct Authority’s (FCA) decision to introduce stricter rules on reporting in line with the recommendations of the global Taskforce on Climate-related Financial Disclosures (TCFD).
From 2023, all publicly listed UK companies with a premium listing will be required to “comply or explain” with the TCFD’s requirements. Rules will then be tightened and extended further in 2025, subject to consultation.
CDP welcomed the move and emphasised the fact that its processes for disclosing emissions are TCFD-aligned.