Patturaja Murugaboopathy, Simon Jessop

LONDON, (Reuters) – The last year saw a nearly 40 percent increase in the number of climate data sharing companies with CDP. This is due to investors and policymakers putting pressure on boards, according to data seen by Reuters.

The majority of asset managers around the globe focus on climate change disclosures as part of their effort to identify winners in the shift to a low carbon economy and assess portfolio risks.

Some countries make these disclosures mandatory. However, investors can still access the same standardised data provided by the CDP platform to help them compare company performance.

The number of CDP-filing companies has increased more than tenfold since the 2015 Paris Agreement, which saw countries agree to reduce global warming. In 2000, the CDP was established.

If you take a look at these numbers you will see that the rate of change is increasing. I believe this to be very important. Each year, we see a bigger jump than we anticipated from the prior year,” Nicolette Barrtlett, CDP executive director. (Graphic: Number of corporate climate disclosers , https://graphics.reuters.com/CLIMATE-CHANGE/lgpdwojwxvo/chart.png)

There has been no COVID-19-induced slowdown in disclosures. It grew 38% in 2020-2021.

CDP has seen an increase in company reporting. However, CDP’s quality remains poor. In fact, nearly 17,000 companies got the lowest possible grade of ‘F’ in the annual NGO assessment. This is because they did not report any data.

Companies are encouraged to disclose data and set emission targets. These targets should be in accordance with climate science and the goal of limiting global warming to 1.5 degrees Celsius (2.7 Fahrenheit above pre-industrial levels).

Yet, only 1,054 businesses have their targets certified by Science-based Targets Initiative. It is a joint venture between CDP and other non-governmental organizations. Also, less than 1,000 CDP disclosers are required to report on the emission related to products they purchase and their use.

Bartlett stated, “We are clear that disclosure is the first stage of our journey for companies entering our system and measurement clearly means that you manage and hopefully transform your business model.”

Investors and companies continue to drive disclosure, pushing suppliers to take action. Additional impetus came from new U.N. pledges to curb emissions in Scotland’s climate negotiations last month.

The largest jump in disclosures from Paris since then was seen from Latin America. It grew 332% to 1,614 (from 374). Asia climate was 201% warmer than Europe at 3,774 (from 1,256). Europe’s temperature rose 140% from 1,745.

China was the most prominent country with 416% increase in disclosures, to 1,408 from 273. (Graphic: Countries leading on corporate climate change disclosures this year, https://graphics.reuters.com/CLIMATE-CHANGE/jnvweajyyvw/chart.png) (Graphic: Number of corporate climate change disclosers by region, https://graphics.reuters.com/CLIMATE-CHANGE/zgvomnarrvd/chart.png)

Although the number of corporate disclosures increased, the breakdown of sectors shows that some of the most prolific emitters lag in sharing data. (Graphic: Increase in corporate climate change disclosers by region, https://graphics.reuters.com/CLIMATE-CHANGE/gkplglqrqvb/chart.png)

Only 11 global coal miner companies reported data and only 63 international oil and gas producers provided data. However, fossil fuels are the main driver of human-driven greenhouse gases. At the other end of the scale, electrical & electronic equipment companies led disclosures, with 1,395. (Graphic: Top corporate climate change disclosers by sector, https://graphics.reuters.com/CLIMATE-CHANGE/dwpkrzkayvm/chart.png)