Staying within 1.5°C remains a key business goal, according to CDP data showing a nearly 50% increase in companies with 1.5°C-aligned climate transition plans. CDP announces increase in ESG reporting and transition plans.
In brief
- 44% Increase: 1 in 4 companies now have 1.5°C-aligned climate transition plans.
- Credibility Indicators: 39% of companies disclose data on most key indicators.
- Global Leaders: Europe and Korea outperform G20 peers in climate plan disclosures.
CDP clarifies, the facts
- Disclosure Growth: Over 5,906 companies (1 in 4) reported having climate transition plans last year through CDP, the world’s only independent environmental disclosure system. An additional 36% (8,200 companies) plan to create one by 2025.
- Transition Plans: CDP, in collaboration with the UK Transition Plan Taskforce, launched the ‘Disclosure Framework’ to aid companies in developing credible transition plans.
- Indicators of Progress: CDP’s questionnaire, used by companies representing over 66% of market capitalization, includes 21 indicators covering governance, emissions reporting, strategy, target-setting, financial planning, and value chain engagement. Currently, 39% of companies (2,329) are disclosing data on most key indicators, essential for judging the credibility of their plans. Less than 1% (140 companies) reported on all 21 indicators needed to judge a plan’s credibility.
- Regional Leaders: Businesses listed on Europe’s FTSEurofirst 300 and Korea’s KOSPI 200 outperform their G20 peers, with 77% and 75% of companies, respectively, covering most key indicators. In contrast, the S&P/TSX60 (Canada) and CSI 300 (China) are the poorest performers, with only 28% and 29% disclosing data on most indicators.
With nearly 50% more companies reporting climate transition plans through CDP in 2023, it’s evident that data on forward-looking commitments are becoming crucial tools for companies to build and maintain confidence with market stakeholders. This momentum is unmistakable, with a further 8,000 businesses looking to have their transition plans in place by 2025. This is encouraging and a smart business move, as climate transition plans are an essential tool needed for credible businesses as they shift to net-zero.
Sherry Madera, CEO of CDP
It’s good news to see the strong increase in the number of businesses disclosing transition plans and the further growth in intention to create a transition plan in 2025. Transition plans are now an essential part of any organisation’s forward-looking strategy. CDP’s data points to the increased value of using the Transition Plan Taskforce’s best practice disclosure framework to ensure their reporting is comprehensive, robust and credible. I would urge all companies to get started on their transition plan in order to stay ahead of the curve, and continue to disclose those plans year on year to ensure they continue to align with best practice.
Kate Levick, Co-Head of the UK Transition Plan Taskforce
