CDP – the global environmental disclosure nonprofit – has scored over 21,000 companies based on information reported through its climate change, deforestation and water security questionnaires. Just under 400 (2%) of these have been named on its 2023 A List for disclosing actionable, high quality environmental data.
Disclosure is a critical tool for achieving net-zero targets and avoiding greenwashing, tracking progress against the Paris Agreement goals – and providing robust data and recommendations for the Global Stocktake. 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.
At the same time, mandatory disclosure regulation is continuing to gain momentum and coming into place in a growing number of jurisdictions. CDP brings disclosure standards and frameworks together in its questionnaires, and A List companies are better prepared to meet these regulatory requirements.
By scoring companies from D- to A, CDP takes them on a journey starting from disclosure, to understanding what to measure and finally how to take tangible, measurable actions. Companies providing the highest quality environmental data remain a small minority. Disclosure through CDP grew by 24% last year. While this growth is positive, most are still not reporting at the level needed for tracking progress, achieving targets and avoiding greenwashing.
10 companies were awarded an A across all three thematic questionnaires – Climate Change, Forests and Water Security. The number of companies requested to disclose against all environmental issues in 2023 almost tripled since 2022. Financial institutions and major buyers are increasingly urging companies to consider climate and nature as interconnected; companies must address all environmental issues holistically.
CDP 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. Companies that achieve an A – although among the most transparent when it comes to disclosure and performance on climate change, deforestation or water security – are by no means at the end of their environmental journey.
As examples of this, in 2023, leading Climate Change companies needed to provide 100% verification of their Scope 1 and 2 emissions with no significant relevant exclusions (this requirement was 70% in 2022). Leading Forests companies needed to report traceability of their entire commodity supply chain including sourcing origins of forest-risk countries, without any significant exclusions, and leading Water Security companies needed to demonstrate comprehensive water accounting by indicating the regular monitoring of water withdrawals, water discharge, and the provision of water, sanitation and hygiene services to all workers.
Sherry Madera, CEO of CDP, 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. 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.
“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. Without transparency and accountability – followed by immediate action – claims of sustainability are meaningless.
“A heartfelt congratulations to this year’s A List. As CDP continually raises the bar for what represents environmental leadership, the work of all companies should be celebrated, but is never complete. We must see corporate ambition ramp up on climate and nature-positive action. This has never been more crucial.”
CDP campaigns each year for greater transparency and action. In 2023, 288 financial institutions with nearly US$29 trillion in assets requested environmental disclosure from more than 1,500 high-impact companies. 317 companies disclosed as a result of this direct engagement [1]. However, more than 38,000 companies worth at least US$26.6 trillion in market capitalization [2] – including Aramco, Berkshire Hathaway, Tesla, Exxon Mobil and Chevron – failed to respond to the request.
