In the number of companies disclosing environmental data
CDP, a climate research and environmental disclosure platform supplier, revealed today that more than 18,700 companies published environmental data via CDP in 2018, an increase of more than 40 percent from the previous year.
CDP operates a global environmental disclosure system that allows investors and other stakeholders to monitor and track the performance of organizations in important environmental sustainability areas, including climate change, deforestation, and water security. The platform provides annual scores for companies – typically released in December of each year – on each of the key categories. The data is also utilized by information services providers such as Bloomberg, STOXX, Trucost, FTSE/Russell, MSCI, and ISS ESG to power investment research, products, indices, and ratings.
With this year's record results, corporations with a combined market capitalization of approximately $61 trillion are now releasing information on climate change, deforestation, and water security through CDP.
CDP's Chief Stakeholder Officer, Mercedes Tallo, stated:
"This is a watershed year for environmental transparency. Disclosure gives the drive for action and the framework for accountability, thus this is vital. There is unprecedented consensus among stakeholders that environmental disclosure is essential for measuring and driving progress to demonstrate the effect, and it is now clearly at the top of the board and government agendas."
Companies worldwide are planning to comply with required climate and sustainability disclosure rules now in place or shortly to be adopted by regulators in regions such as Europe, the United Kingdom, and the United States. Since the signing of the Paris Agreement in 2015, disclosure through CDP has increased by 233%, and by 37% in 2021.
Although the number of companies that report has increased, the majority do not currently report on all environmental data components. Last year, virtually all CDP-reporting corporations submitted climate data, but only around a quarter reported on water security and less than 10% on forests.
In addition, the Carbon Disclosure Project (CDP) has recently released a report indicating that significant gaps exist in the disclosure of information by companies regarding their climate strategies, with slightly more than one-third of companies assessed as having credible emission reduction targets and less than one percent reporting on all of CDP's key climate transition-focused indicators.
According to CDP, despite increased investor and regulatory demand for ESG data, more than 29,500 companies have yet to reply to the disclosure request.
CDP has claimed that it intends to expand its data repository to include 90 percent of the world's most influential companies by 2025.
With obligatory disclosure on the horizon, we are urging the over 30,000 non-disclosing corporations to report and prepare for the future.