Companies Aren’t Making Credible Climate Plans Fast Enough
Companies aren’t producing transparent and credible plans for addressing climate change fast enough, according to a fresh study that looked at more than 23,000 firms worldwide.
(Bloomberg) -- Companies aren’t producing transparent and credible plans for addressing climate change fast enough, according to a fresh study that looked at more than 23,000 firms worldwide.
Just 2% of companies that have committed to a 1.5C-aligned plan provide the full range of information needed to ensure their emissions-cutting plans can work, according to CDP, the global nonprofit focused on increasing environmental disclosures.
What’s more, the figure falls to less than 1% when all companies reporting environmental data are considered. The number of companies that actually reported a 1.5C plan increased by 44% to roughly one in four. While that’s “encouraging, action on credible climate-transition planning isn’t moving fast enough,” according to the report.
The slow pace of companies’ response is prompting governments to increasingly impose requirements to disclose net zero transition plans. Most recently, the European Union has adopted the Corporate Sustainability Due Diligence Directive, which will require companies to develop climate transition plans and face legal liability when failing to identify and address human rights and environmental violations in value chains.
CDP highlighted some bright spots in its latest report. Japan has the most companies (32) with transition plans that provide all recommended information, and climate disclosures are improving in the US, UK and European Union.
Also noteworthy, CDP said, was that three out of four companies listed on select indexes such as the FTSEurofirst 300 and the KOSPI200 provided information on two thirds or more of indicators.
Some companies “are recognizing that the demands around that are going to tighten and tighten in coming years,” said Amir Sokolowski, global head of climate change at CDP. No longer will firms be able to hide behind claims that data and methodologies aren’t available, and for investors keen to see transition plans that’s good news.
“The capacity to build an absolutely brilliant one is there,” Sokolowski said. “There’s no more statement: Of course we’ll do it, it’ll take me 15 years. You can do it in much less.”
(Updates to add CDP comments from sixth paragraph)
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