Companies aren’t drawing up credible climate transition plans

Jun 19, 2024

Synopsis
The number of companies that actually reported a 1.5C plan increased by 44% to roughly one in four. While that’s “encouraging, action on credible climate-transition planning isn’t moving fast enough", says the CDP report.

Companies aren’t producing transparent and credible plans for addressing climate change fast enough, according to a fresh study that looked at more than 23,000 firms worldwide.

Just 2% of companies that have committed to a 1.5C-aligned plan provide the full range of information needed to ensure their emissions-cutting plans can work, according to CDP, the global nonprofit focused on increasing environmental disclosures.

What’s more, the figure falls to less than 1% when all companies reporting environmental data are considered. The number of companies that actually reported a 1.5C plan increased by 44% to roughly one in four. While that’s “encouraging, action on credible climate-transition planning isn’t moving fast enough,” according to the report.

The slow pace of companies’ response is prompting governments to increasingly impose requirements to disclose net zero transition plans. Most recently, the European Union has adopted the Corporate Sustainability Due Diligence Directive, which will require companies to develop climate transition plans and face legal liability when failing to identify and address human rights and environmental violations in value chains.

CDP highlighted some bright spots in its latest report. Japan has the most companies (32) with transition plans that provide all of the recommended information and climate disclosures are improving in the US, UK and European Union.

[The Economic Times]