As mandatory disclosure regulation gains momentum around the world, a record 18,700+ companies – including listed companies worth US$60.8 trillion (half of global market capitalization) – have this year disclosed their environmental data through CDP, the global non-profit that runs the world’s environmental disclosure system for companies, cities and regions. Representing a 233% increase since the Paris Agreement was signed in 2015, this is the highest number of corporate disclosers CDP has seen since starting over 20 years ago.
However, more than 29,500 companies worldwide, including stocklisted companies worth US$24.5 trillion, failed to respond to requests from financial institutions and customers to disclose through CDP in 2022.
In the EU, over 4.000 companies representing over €8 trillion disclosed to CDP in 2022, while 5.500 companies worth over €830 billion failed to respond.
Mercedes Tallo, Chief Stakeholder Officer at CDP, said: “This is a landmark year for environmental disclosure. This is crucial because disclosure provides the impetus for action and the mechanism for accountability. There is unprecedented agreement among stakeholders that environmental disclosure is a necessity to measure and drive progress to show impact, and it clearly now sits at the top of boardroom agendas and government policy. With mandatory disclosure on the horizon, we’re calling on the near 30,000 non-disclosing companies to report and take action to prepare themselves for the future.”
The top five countries for corporate disclosures in 2022 were the USA (3,700+ disclosing companies), followed by China (2,500+), Japan (1,700+), the UK (1,400+) and Brazil (1,300+).
The IPCC’s Sixth Assessment Report in February highlighted climate risk disclosure as a critical measure for adaptation. Measuring and managing environmental risks through disclosure will be essential if corporates are to build resilience and plan for the future in the narrow window the world has left.
At COP27, governments will focus on assessing progress towards meeting the Paris Agreement goals through the Global Stocktake. The data obtained through disclosure will be critical to effectively capturing global progress, identifying gaps and increasing ambition.
With 90% of global emissions now covered by climate targets and more than 3,600 companies having set or committed to a science-based target, ensuring transparency and tracking progress against commitments has never been more critical. Environmental disclosure enables measurement of progress, helping to ensure that governments, companies and other non-state actors are actually delivering on their net-zero commitments.
CDP convenes a growing number of financial institutions and large purchasing companies, supporting them in their requests for corporate environmental disclosure. In 2022, more than 680 financial institutions with over US$130 trillion in assets requested nearly 10,400 companies to disclose environmental data through CDP, and over 280 major buyers worth US$6.4 trillion in purchasing power requested environmental data from over 47,000 of their suppliers.
City, state and region disclosure has so far reached over 1,100. CDP-ICLEI Track, the leading global climate reporting platform for cities, and CDP’s disclosure platform for states and regions remain open.
Mercedes Tallo added: “For more than 20 years, CDP has been driving change in how capital markets, businesses, cities and governments understand and tackle environmental issues. I am delighted to see disclosure becoming business-as-usual alongside the global movement towards mandatory disclosure. Governments, companies, cities, states and regions must move further and faster to keep up with this momentum. Urgent and transformative action is needed now. All corporations must embrace their responsibility to measure and manage their environmental impacts at speed and scale. The findings of the IPCC’s Sixth Assessment Report and extreme weather experienced globally in 2022 made shockingly clear that companies must prepare themselves for the impacts of climate change and show that they can adapt through resilient supply chains and business models.”