Companies setting climate transition plans up 44% in 2023, research shows
The number of companies saying they have a climate transition plan in line with the world’s most ambitious goal has jumped by nearly half, but many do not give investors enough information to check the claims, according to non-profit data tracker CDP.
One in four companies to provide data to the world’s only independent environmental disclosure platform, or 5,906 in total, said they had a plan aligned with capping global warming at 1.5 degrees Celsius above the pre-industrial average.
Doing so is crucial to avoiding the worst impacts of climate change, yet the United Nations said in December that the world was currently on track to record a temperature increase of 2.9 degrees Celsius.
Regulators in the U.S., European Union and elsewhere are increasingly making reporting by companies mandatory, but in many countries it remains voluntary, and the actions of some boards are outpacing change by policymakers.
To help investors track the quality of the plans, CDP has picked 21 indicators it said a company should aim to provide, such as emissions data from across its supply chain, clarity on any assurance provided, and the degree of board oversight.
Of the companies to lay claim to a 1.5 degrees Celsius-aligned transition plan, 39% disclosed information on at least two-thirds of the CDP target metrics, but just 1% of the companies, some 140, gave information on all the metrics.
“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,” said CDP Chief Executive Sherry Madera in a statement.
“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.”
