CDP has scored more than 21,000 companies based on information reported through its climate change, deforestation and water security questionnaires.
However, less than 400 (2%) of these have been named on its 2023 A-List for disclosing actionable, high quality environmental data.
According to CDP, the number of companies requested to disclose against all environmental issues almost tripled between 2022 and 2023.
In 2023, 288 financial institutions, with nearly $29trn in assets, requested environmental disclosure from more than 1,500 high-impact companies with at least 317 companies sharing data on their environmental impact as a result of direct engagement.
Disclosures and scoring companies
The non-profit explained that by scoring companies from D- to A, it takes them on a journey starting from disclosure, to understanding what to measure and finally how to take tangible, measurable actions.
CDP noted that, despite a 24% increase in disclosures through its platform last year, companies providing the highest quality environmental data remain a small minority.
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Based on the scoring, A-List companies are those with the most accurate picture of their environmental impacts and are best equipped to take climate and nature-positive actions to mitigate them.
Out of the A-list, which consists nearly 400 companies, fashion conglomerate Kering and speciality fibre company Lenzing AG were were awarded an ‘A’ rating across all three thematic questionnaires – climate change, forests and water security.
The news comes shortly after Kering, which owns several luxury fashion brands including Gucci, Saint Laurent, and Alexander McQueen, released an updated sourcing policy for brands and guidelines for its suppliers.
CDP explained it regularly raises the bar for what qualifies as ‘environmental leadership’ in line with emerging science, feedback from stakeholders and market needs for greater environmental transparency. It emphasised that companies achieving an ‘A’ are by no means at the end of their environmental journey.
Transparency and accountability vital for sustainability
Sherry Madera, CEO of CDP, believes it is only by laying the groundwork of disclosure that companies can show they take seriously the vital part they play in safeguarding the future.
She said: “It is encouraging to see so many companies across the globe starting or accelerating their journey towards environmental transparency in 2023. We saw a 24% increase in disclosures last year and that trajectory is welcomed. The stark reality is that we are incredibly far behind where we need to be, and progress is much too slow.
“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. And yet it is still a minority of companies that are rising to the challenge. We must see corporate ambition ramp up on climate and nature-positive action. This has never been more crucial.”
Madera also underscored the importance of transparency and accountability followed by immediate action, without which she adds claims of sustainability are meaningless.