Less than 1% of businesses report credible climate plans

Organisations around the world are woefully underperforming when it comes to reporting on climate planning, according to a new report.

The research from the CDP – the world’s environmental disclosure platform – analysed climate transition plan disclosures from more than 18,600 companies across 13 industries in 135 countries. A climate transition plan outlines how a company will achieve its strategy to align its assets, operations, and entire business model with the latest and most ambitious climate science recommendations.

Against 21 key indicators in CDP’s climate change questionnaire, just 81 companies (0.4% of the total reporting) disclosed all relevant information, which include topics such as governance, financial planning, risks, targets and emissions reporting. The figure is less than last year, when 135 companies made the grade, because CDP has tightened its criteria for what makes a credible climate plan based on the latest science. 

Companies in power generation (2.2%) and infrastructure (1.7%) industries were most likely to disclose to all key indicators while the apparel, fossil fuels and hospitality industries had only one organisation each disclose to all key indicators.

According to the CDP, it is vital that companies implement – and report on – a comprehensive climate transition plan if they’re to remain on track to reach net zero. The report’s findings therefore add urgency to UN Secretary General António Guterres’ call at Davos for ‘full engagement of the private sector’ as the world heads to a level of global warming of 2.8 degrees, considerably higher than the 1.5 degree Paris Agreement target.

However, the report did note that more companies are beginning to recognise the importance of climate planning, with 13% of companies disclosing between 14 and 20 indicators, demonstrating that they are on their way to disclosing a credible climate transition plan. CDP also notes that 35% of reporting businesses state that they intend to develop a climate plan in the next two years.

Amir Sokolowski, global director of climate at CDP, said: “Tracking corporate disclosure against transition related indicators is essential to ensure companies are kept accountable to the targets and plans they set.” He added that “whilst overall disclosure of credible climate transition plans is low it is encouraging to see more companies recognising the relevance of a climate transition plan and start their journey towards developing one.”