INSIGHT by CDP
〉New tracker launched today makes findings from CDP’s climate transition data easily available to the public for the first time via CDP’s website. Placing CDP data in the hands of climate data users across the globe and sending clear signals to companies investors, policymakers, and civil society that more action is urgently needed.
〉CDP’s Corporate Environmental Action Tracker shows climate actions against commitments from nearly 10,000 companies covering 16% of global emissions.
〉The tracker drives home the scale of progress required: only 60% of disclosing companies have emissions reduction targets, and only 81 disclosed a credible climate transition plan.
〉The tracker shows disclosed corporate targets would not limit warming to a Paris-aligned 1.5°C -degrees, and predicts the potential emissions reduction gap by 2050 would be equivalent to current emissions produced by China and USA.
〉Over 91% of FTSE 100 and 80% of the S&P 500 companies are included in the tracker.
〉Aviation and shipping and industry sectors lead the way on emissions disclosure, with a lack of transparency from agriculture, waste and retail and services.
Current corporate targets disclosed through CDP will not reduce emissions enough to limit warming to 1.5 degrees, but the number of 1.5°C -aligned science-based targets disclosed is increasing year on year, new data from CDP reveals.
The findings come from CDP’s new Corporate Environmental Action tracker that aggregates and tracks climate commitments and action to reduce emissions. Launched today, it makes findings from CDP’s climate transition data available to all for the first time via CDP’s website. The tracker gives companies, investors, policymakers, and other interested parties access to insights from the world’s largest corporate environmental data set.
The tracker, will be updated annually and will provide a key tool to inform business decisions and drive accountability to support impactful climate action.
The tracker draws data from nearly 10,000 companies that included emissions values in their disclosures, covering 16% of global emissions. The tracker includes data from some of the world’s most important and influential corporates including the majority of FTSE100 and S&P500. It comes as CDP calls for all companies across the globe to disclose to provide a more comprehensive picture of how far off the global economy is from hitting 1.5°C degrees warming, and where more action is needed.
Users can navigate through six steps in the tracker (disclosure, governance, target setting, strategy and transition plans, target attainment and target impact), made up of 11 indicators. The tracker displays CDP’s climate disclosure through the critical lens of emissions and emissions reductions.
Anyone can access the tracker for free and view data analysis and insights that are key to transforming the global economy. It takes the complex data collected by CDP and displays aggregated analysis broken down by geographies, sectors and two market indices (FTSE 100 and S&P 500) from 2019 onwards. This gives a clear indication of the leaders and laggards on climate disclosure and action.
| The Corporate Environmental Action Tracker provides information on:
〉The proportion of global, country and sector-based emissions disclosed through CDP, and the proportion of FTSE100 and S&P500 companies disclosing through CDP (by number and revenue).
〉The proportion of global and sector-based emissions covered by a credible climate transition plan, board-level oversight or executive incentives.
〉The proportion of companies in the FTSE 100 and S&P 500 that have a credible climate transition plan, board-level oversight or executive incentives (by number and revenue)
〉The proportion of global emissions covered by validated 1.5-aligned SBTi targets.
〉The number of companies that have Scope 3 targets, and what proportion of global emissions this covers.
〉The number of companies that are on track to reach their disclosed targets.
〉The expected and potential impacts of disclosed targets for reducing emissions.
Future iterations of the tracker will bring together CDP’s environmental data, including water security and forests. Damage to nature – particularly forest, wetlands and ocean degradation – is the second biggest source of emissions after fossil fuel burning and equitable action on nature is critical to a 1.5C future.
“For over 20 years we have mainstreamed the role of disclosure as an essential tool to inform decisions that help drive change. Now, we’re democratising our data. CDP’s Corporate Environmental Action Tracker is for anyone who is concerned about corporate leadership for the planet. Our tracker will help users understand our disclosure data at a glance, highlighting where more action is needed. CDP is uniquely positioned to develop this tool as we had almost 19,000 companies disclosing through us in 2022, some just starting out and others who have been disclosing for over 20 years.
The tracker shows only 24% of disclosing companies, covering 5% of emissions, are on track to meet their targets . Despite the innovation displayed by the leaders, action overall is not at the level we need, and with time running out to transform our global economy, we are placing our tracker into the hands of the world’s climate data users. I hope that this increased transparency is a clear signal of CDP’s commitment to enabling the transformative action we must see to have any hope of limiting warming to 1.5 degrees”.
-Paul Dickinson, Founder Chair of CDP
CDP’s tracker allows users to develop a picture of corporate action, for example understanding performance against 1.5-aligned targets [See notes to editor]. The tracker also shows indications that some companies are making progress on their climate impact, for example:
〉The number of disclosing companies in all sectors bar aviation and shipping has increased since 2019.
〉91% of FTSE 100 companies disclose through CDP (this has remained relatively stable over the period 2020‒2022) and 82% by number of all S&P500 companies disclose.
〉The proportion of global emissions covered by companies with a target including Scope 3 has more than doubled since 2019
〉Globally, the proportion of emissions coming from companies who are on track or almost on track to meet their targets has increased from 5% in 2020 to 6% in 2022.
Companies should use the tracker to inform environmental reporting and business planning and see how their joint efforts are reducing and could further reduce GHG emissions.
Investors should use the tracker to understand the performance of different geographies, sectors and indices and to make data-informed decisions about investments and their environmental alignment.
Policymakers should use the tracker to assess the impact of regulation and put pressure on non-state actors and encourage further disclosure.
To view the tracker, visit CDP’s website: www.cdp.net/en/data/corporate-environmental-action-tracker
Please note years marked on the graphs in the tracker refer to reporting years (the year the emissions occurred in), the tracker contains data from companies disclosing between 2020-2022.
| about
CDP is a global non-profit that runs the world’s environmental disclosure system for companies, cities, states and regions. Founded in 2000 and working with more than 740 financial institutions with over $130 trillion in assets, CDP pioneered using capital markets and corporate procurement to motivate companies to disclose their environmental impacts, and to reduce greenhouse gas emissions, safeguard water resources and protect forests. Nearly 20,000 organizations around the world disclosed data through CDP in 2022, including more than 18,700 companies worth half of global market capitalization, and over 1,100 cities, states and regions. Fully TCFD aligned, CDP holds the largest environmental database in the world, and CDP scores are widely used to drive investment and procurement decisions towards a zero carbon, sustainable and resilient economy. CDP is a founding member of the Science Based Targets initiative, We Mean Business Coalition, The Investor Agenda and the Net Zero Asset Managers initiative. Visit cdp.net or follow us @CDP to find out more.
| All opinions expressed are those of the author and/or quoted sources. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.
