As 2020 comes to a close, we reflect on a challenging and extraordinary year. As the world collectively responded to the COVID-19 pandemic, we reeled from the tragic human impact of the crisis and its impact on our health, financial and social systems. Words and phrases like social distancing, lockdown and R number entered our vocabulary for the first time. We attempted to adapt to this unprecedented global crisis and many of us will leave this year behind with a new-found appreciation of the fragility of human systems.
What started as a health crisis, has morphed into a burgeoning economic crisis, shining a light on inequalities and vulnerability in society. This year, the Black Lives Matter movement showed us why environmental action and racial justice must go hand-in-hand. And, while we know that climate change is arguably the biggest long term global challenge, if 2020 has taught us anything, it’s that in the darkest of days, hope and determination prevail.
Decade of action
When it comes to climate change, water security and deforestation, we have now entered a global emergency and the decade of action, our last chance to make rapid and deep cuts to global emissions and to protect biodiversity. Despite the pandemic, we are bolstered by the environmental leadership and ambition of many companies, investors, governments, cities, and regions worldwide. With so much at stake and the clock ticking down, 2020 saw record disclosures through CDP’s platform, with over 10,000 entities now disclosing their data on climate change, water security and deforestation issues.
With more than 9,600 companies, worth over 50% of global market capitalization now disclosing to CDP, corporate disclosures are up 70% compared to five years ago when the Paris agreement was formed. This is in addition to the cities, states and regions that have disclosed to us so far in 2020.
One thing is certain, we cannot afford to go back to ‘normal’ from an environmental perspective. Propping up the old system, with impending climate change hazards increasing, will lock us into a pathway of even greater risk. Instead we must reinvent and renew our economy into one with greater resilience and more inclusivity, and we must firmly set our sights on a net zero economy, ensuring we make urgent progress now to get there.
Disclosure, transparency, data and science will be crucial to building a more resilient society. As we’ve learned from this current pandemic and climate change, the best time for action is long before the problem becomes severe. Measuring and managing environmental risks through disclosure helps companies, cities, states and regions to build resiliency and plan for the future.
CDP at 20
2020 also marked CDP’s 20th Anniversary. In just twenty years, we have turned our vision of mainstreaming environmental disclosure into a business norm. We’ve come a long way from gathering a group of 35 investors together to sign our very first climate change questionnaire, sent out to 500 of the world’s largest companies in 2002.
Over the years, our focus expanded from climate change into the other interlinked environmental risks and impacts of water security and deforestation and we extended our target audiences to include cities, states and regions. CDP also co-founded the Science Based Targets initiative in 2015, driving ambitious climate action in the private sector by supporting companies to reduce greenhouse gas emissions in line with the latest climate science. Now, five years after the Paris Agreement, there are over 1,000 companies setting science-based targets. CDP is also a founding member of RE100, a partnership led by The Climate Group. RE100 is a collaborative, global initiative uniting over 280 influential businesses committed to 100% renewable electricity.
Watch our story and learn about how environmental disclosure has paved the way for the next ‘decade of ambition’.
The data of tomorrow
As we enter our third decade, and the second year of the decade of action (2021), CDP has a vital role to play as the world’s environmental disclosure platform. The CDP system is fundamental for collecting and providing the data to create a better tomorrow.
Since our inception, CDP has utilized levers to catalyze change. Our first decade used the power of investors to influence companies in their equity portfolios to disclose their environmental impact whilst our second added companies to influence their supply chains through the power of procurement. Our third decade will see us harnessing the power of financial institutions not only to measure and disclose their own environmental impacts, but to request their corporate loan books to disclose.
We are led by the latest climate science. As it evolves, so must we. Ensuring that the right information is embedded into the capital markets andplaced into the hands of policymakers and decision-makers worldwide. CDP’s systems enable this, and it is particularly critical as capital flows seek to transition towards the Net Zero, sustainable economy.
This is the start of a new era. We are witnessing an enormous uptake in sustainability reporting. It is great to see institutions such as the IFRS and policymakers in the EU actively engaged in the debate as to how business can most efficiently disclose their environmental, social and governance data.
Today’s business and civic leaders know that they need a better understanding of the environmental risks, opportunities and impacts they face, to effectively tackle climate change, water security and deforestation. This is why CDP is upgrading our systems to allow our stakeholders to track a wider range of environmental risks beyond climate change, water security and deforestation.
For the critical years ahead, there is a greater need for robust, timely and actionable environmental data. It is by evolving our disclosure systems and moving towards integration of our questionnaires, that CDP will facilitate greater data comparability, faster scoring, and more in-depth insights for decision-making; benchmarking the transition to a 1.5 °C aligned, climate-safe, water-secure, and deforestation-free future.
As we see the first people immunized against COVID-19, we are experiencing first-hand how science and data can help us to solve complex global problems. It is with renewed hope that we welcome the dawn of 2021. There is no looking back, only forward, as the world seeks to avert another global crisis: climate change.
The road to COP26 in Glasgow will be paved with strong ambition from companies, investors, cities, states and regions. They must ramp up ambition and action, transparently report on their efforts and send a clear signal to governments that they are embracing the transition and need to see greater policy ambition to match. Together this can create an ambition loop and propel us on the Race to Zero.
We must build back better from the COVID-19 pandemic. Our economies, societies and livelihoods depend on it.
The time for action is now.