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Recently, a critical measurement for environmental action was released. It’s the annual CDP score publication, a global disclosure and rating system that enables companies, cities, states and regions to measure and manage their environmental impacts.
Why is CDP important? Each year this organization analyzes information supplied by companies to determine if we are on the right path for carbon reduction. CDP reporting is growing exponentially. In 2019, 8,400+ global companies responded to CDP’s climate change, water security and forests questionnaires. In addition, some 120 states and regions—representing 672 million people and 21% of the global economy—and 800 cities also disclosed their environmental information for all the world to see. More than 525 investors request information through CDP on climate change, water security and deforestation and this trend will continue to increase as stakeholder pressure mounts.
With over 8,000 companies scored for their action on climate change, 179 companies made this year’s prestigious A-list, meaning only the top 2% of reporting companies achieved this coveted mark. Global average score was a C, highlighting that while most companies have knowledge of impacts on, and of, climate issues, they are not yet tackling coordinated action or implementing best practices. As ambition increases and bolder commitments are made, more and more companies are recognizing the benefits of reporting, including informing investors and purchasers; reaching decision-makers; boosting competitive advantage; benchmarking and driving progress; and managing risk.
On October 15, GreenBiz and ENGIE Impact partnered to present a webinar, Key Accelerators to Achieving a Zero Carbon Future, moderated by Joel Makower, Editorial Director for GreenBiz Group. Clinton Moloney, Managing Director, Sustainability Solutions - Americas, at ENGIE Impact and I walked the audience through some of the key accelerators that organizations are currently employing to achieve carbon neutrality, including renewables, demand-side reductions, and supply chain mobilization.
Some of the most interesting insights came from a post-webinar survey, revealing the pain points organizations are facing to implement sustainability transformation. Responses exceed 100% because respondents were allowed to select more than one answer.
We asked respondents about their top challenges in reducing carbon emissions. Not surprisingly, lack of funding came out on top for 54% of respondents, followed by insufficient payback or return on investment at 45.9% and lack of tools to measure and model emissions reductions at 40.50%. Other respondents cited lack of technical expertise, business growth, and lack of executive support.
What companies are taking action and how are they prioritizing? We asked what strategies are being employed to accelerate progress toward net zero carbon. Slightly more than 70% of respondents indicated they had set a zero carbon target, which is a critical first step. Nearly 65% have engaged stakeholders and conducted a greenhouse gas inventory and set baselines. Another 41% have employed demand-side reduction activities, while 32% have developed a roadmap to achieve goals.
Take Action: ENGIE Impact recently discussed strategies for accelerating progress with two leading businesses that have found success, Caesars Entertainment and Staples. Watch our webinar, Lessons from Leaders, to learn more about optimizing utility usage, identifying untapped areas, innovative financing models and engaging your stakeholders.
A question on the post-webinar survey inquired about the reduction strategies people would like to learn more about. The responses to this question showed that a minority of respondents are truly “starting from scratch.” Only 29% need more expertise with creating a materiality assessment and only 35% need guidance for setting an emissions baseline and greenhouse gas inventory. More people are interested in accelerating implementation (58%), stakeholder engagement and education (58%), and innovation and collaboration opportunities (64%).
Take Action: Achieving carbon neutrality is complex – read more on resiliency, clean energy, and reputation considerations.
We wanted to know which webinar survey respondents disclose to CDP, DJSI or other programs. Nearly one half of respondents (40%) indicated that they currently are disclosing. Another 43% do not, and 5% don’t but are planning to. A few (10%) are not planning on disclosure at all.
Take Action: Disclosure is a vital part of your business strategy, especially in relation to your reputation. Disclosure can be the driver of accurate data collection and analysis so you can report out. Learn more about how disclosure fits into your reputation management strategy.
The 2020s are the decade for corporations, cities and governments to take action to accelerate their progress to zero carbon. But this progress cannot be made in silos. Each year, through disclosure, we are getting a better look at the strategies and outcomes of zero carbon success. More and more companies are seeing the benefits of disclosure. In 2018, 7,016 companies disclosed to CDP. 2019 saw a 20.4% increase in the number of companies disclosing for a total of 8,446 companies. Many of the challenges, progress and insights from leaders are available simply by looking at CDP scoring criteria that assess successful achievements of ambitious goals.
At ENGIE Impact, we recently released a report, The Path to Zero Carbon: Insights on Success from CDP Disclosures, which does just that. Our research spans six industries across 32 sectors in 50 countries. We analyzed how leaders stacked up in setting and achieving net-zero carbon targets, adopting renewable energy, engaging supply chain, and how leaders understand risks, opportunities and oversight.
