The CDP (Carbon Disclosure Project) earlier this month recognized 272 companies worldwide - worth $12 trillion in market cap - for environmental leadership, based on their level of transparency and performance on climate change, forests and water security. These leading companies have been named on CDP’s annual A List, and are among nearly 12,0001 ranked A to D- on their environmental performance.
Companies are taking a more holistic approach to reporting, with 14 pioneering companies - including L'Oréal, Unilever, HP and Lenzing AG - achieving a triple A for their performance on all three environmental themes in 2021, an increase on last year’s record of 10. What’s more, the number of companies on CDP’s Forests A List rose from 16 to 24 while the Water A List grew from 106 to 118.
Examples of Excellent Programs
Some examples of environmental action from companies on the A List include:
- Owens Corning, the world's largest manufacturer of fiberglass composites, has incentives for the CEO and CSO to reduce water usage as it relates to the company’s 2020 and 2030 goals. The performance indicators relate to the reduction of water withdrawals, reduction in consumption volumes and improvements in efficiency across direct operations.
- Fujitsu Limited, the IT service company, works across its value chain with clients in Asia to find solutions for areas increasingly experiencing water issues e.g. The Jakarta State Disaster Prevention Bureau uses Fujitsu’s disaster information management system to establish timely and accurate responses to natural disasters.
- In December 2020, Unilever implemented a climate transition plan to help reach its net-zero target. In May, it was put to a vote at the AGM and received an overwhelming 99.6% approval rate.
Improvement Needed
While the group is pleased with the forward movement, they point out that more needs to be done since just 2% of all scored companies made the A List, and 58% scored between C and D-, meaning they are only just beginning to recognize their environmental impact.
CDP points that there are financial benefits to reporting environmental data. “Companies that publish their environmental data consistently and on an annual basis can protect and improve their reputation, get ahead of regulation, boost their competitive advantage, uncover risks and opportunities, track and benchmark progress and get access to lower costs of capital,” the group said in a statement.
There is also evidence to suggest that companies that score highly on environmental metrics perform well financially. The Stoxx Global Climate Change Leaders Index, which is based on CDP’s A List, has seen an average annual return that is 5.8% higher than its reference index over the past eight years.2
“Business can only thrive on a healthy planet,” said Alan Jope, CEO of Unilever, in a statement.” Unilever sees CDP as a key partner in delivering the changing business needs to make, working with some of the most influential companies, cities and regulators to build sustainable economies.”
Over 14,000 organizations around the world disclosed data through CDP in 2021, including more than 13,000 companies worth over 64% of global market capitalization, and over 1,100 cities, states and regions.
