Over 21,000 companies reported on CDP’s climate change, deforestation, and water security questionnaires for 2023, yet only about 2% of these companies achieved the A List for environmental disclosures.
CDP scores companies annually from a D- to an A, working to help companies recognize what focus areas they should prioritize for measurable climate action. CDP said that while climate disclosures rose by 24% in 2023, the number of A List companies rose by only 14%, indicating that most companies still do not report on the level needed to adequately track progress, achieve targets, and avoid greenwashing.
“The stark reality is that we are incredibly far behind where we need to be, and progress is much too slow,” said CDP CEO Sherry Madera. “Earning a place on the A List is about more than the score. It’s an indication of high quality and comprehensive data that equips companies with a holistic view of their environmental impact, serves as a baseline for transition plans and -- crucially -- enables them to follow through on their stated ambitions.”
Investors are increasingly considering companies’ environmental disclosures as a deciding factor for investment -- CDP said that in 2023, 288 financial institutions with about $29 trillion in assets requested such disclosures from over 1,500 high-impact companies. Meanwhile, over 28,000 companies, such as Aramco, Berkshire Hathaway, Tesla, Exxon Mobil, and Chevron, have not responded to this call for greater transparency.
Companies that achieved the CDP A List were found to be the most transparent about their performance on climate change, deforestation, and water security.
For example, leading climate companies had to provide 100% verification of Scope 1 and 2 emissions, while leading forest companies had to report their whole commodity supply chain, including sourcing origins of forest-risk countries. The number of companies looking to disclose against all three of these categories nearly tripled from last year.
Only 10 companies, such as L'Oréal, Lenzing, and Danone, received an A score across all three themes, but CDP said that even those with high scores are still far from the end of their environmental journey. Disclosure is an important first step in addressing corporate impact on climate, but it acts as a starting point, or baseline for transition plans and a crucial way for companies to measure progress.
“It is still a minority of companies that are rising to the challenge," said Madera. "Without transparency and accountability -- followed by immediate action -- claims of sustainability are meaningless.”
