Making corporate environmental performance visible and actionable is the lifeblood of CDP’s work. The absence of regulatory requirements for climate-related disclosures in North America makes voluntary submissions to CDP critical to feeding vital data ecosystems used by financial institutions, environmental NGOs, academics and policymakers – and it’s more important than ever to be part of the process.
I recently took the reins as President of CDP North America, where I find myself humbled by the scale of companies voluntarily sharing their environmental data with CDP each year – more than 7,000 last year, a number we will likely exceed in 2019.
Today, some two billion people already live in countries facing high water stress, the latest climate science is warning the next 12 years will be critical for halting the most devastating climate impacts, and we continue to lose our precious forests at a rate of five million hectares every year. Time is of the essence. Now is the time to step up, not step back.
Corporate sustainability professionals have complex roles with big responsibilities, and rarely have the resources needed to do it all. I have been in their shoes in my previous roles at Dell and NRG, where I oversaw our annual company disclosures to CDP. But as a former discloser myself, I saw the benefits of going through the process. And in the end, we were contributing to a body of knowledge that fuels countless other organizations’ efforts to fight climate change and environmental degradation.
Providing this kind of transparency is not easy. The process of disclosure is difficult and tedious at times. But never has it been more worth doing. Environmental concerns need to underpin every business and investor decision. How do we make this happen? With data. With standardized disclosures.
Still, I recognize that we at CDP have opportunities to make this process clearer and simpler. I am working with my colleagues to streamline the disclosure process, ensuring our tools are intuitive and the data collected is not just interesting but useful for decision-making.
And it works. I have seen how transparency can lead to lasting action. For example, 38% of companies responding to CDP for the first time have emissions reductions targets in place. For third year responders, this figure jumps to 69%.
Through the annual disclosure cycle, companies are able to identify the gaps and see the opportunities for action, such as setting science-based targets, committing to renewable energy or engaging with suppliers to ensure sustainable sourcing.
CDP asks companies to disclose their environmental impacts, risks and opportunities on behalf of investors and purchasing organizations not just for the sake of reporting out to those stakeholders and inciting corporate action. The other benefits of CDP disclosure are no less significant:
- Each company’s disclosure is included in the most comprehensive, comparable set of environmental data on Wall Street and beyond. CDP’s corporate data request now goes out on behalf of 525+ global institutional investors with assets of US$96 trillion.
- CDP data is utilized in investment research, products, indices and ratings including S&P Trucost, Bloomberg and MSCI ESG Research.
- Investors are increasingly using CDP data to pick future market winners and losers. Schroders and CalPERS are just two examples.
- CDP data powers new financial products such as the STOXX Low Carbon Indices or the New York State Common Retirement Fund’s low carbon index created by Goldman Sachs. And you must disclose to CDP to be included in Climetrics, the world’s first and only independent climate impact rating for investment funds.
- Nearly three quarters of CDP Supply Chain members, representing $3.5 trillion in procurement spend, said they are either currently deselecting or considering deselecting existing suppliers based on their environmental performance provided by CDP’s data.
CDP disclosures feed an entire data and analytical ecosystem that relies on corporate leaders committing to standardized disclosures. Without these, the sustainability field is blind and accountability falls flat. If every company decides what, how and when it wants to disclose, the collective action and insights system is dramatically weakened.
To those of you who have already submitted your 2019 CDP disclosure: thank you. Your efforts not only support the long-term success of your business, but also play a significant role in the global efforts to combat climate change.
We all have a part to play in this great movement to build a thriving economy that works for people and planet. Thank you for committing to a future where financial prosperity does not mean environmental instability, where our actions today don’t compromise the needs of tomorrow.