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Home > Accelerating corporate climate action
CDP briefing for policymakers
Accelerating Corporate Climate Action: The Role of Policy
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Accelerating Corporate Climate Action: The Role of Policy

This is an updated version of a policy brief first published in September 2019. The brief originally examined the impact of climate-related policy on a sample of 366 of the world’s biggest companies, worth $28 trillion in market cap, as disclosed through the CDP platform in 2018. We have now added a second part, consisting of an analysis of companies’ readiness for disclosure legislation, based on a broadened sample of 2,376 companies.

Key messages, derived from analysis of the two samples, are:

What do companies disclose about the impacts of climate-related policy?

  • Policy, both current and anticipated, is a major driver of actions taken by companies to manage climate change impacts;
  • The costs of managing policy-related risks are lower than the potential financial impacts for the majority of industries;
  • Policy can create financial opportunities, by driving demand for products & services and revealing cost savings;
  • Policy uncertainty is a risk, but the anticipation of policy is a powerful opportunity driver.

How ready are companies for disclosure regulation?

  • Companies consider enhanced emission reporting regulations a low impact transition risk;
  • Almost a quarter of companies respond to all TCFD-aligned questions within CDP’s information request. A further 50% are responding to almost all of them;
  • Disclosure and corporate action go hand in-hand. Four times as many companies have set a science-based target within the group of companies who respond to all TCFD-aligned questions, than within the group of companies who don’t;
  • Companies identify a variety of opportunities that can arise from reporting legislation.

Policymakers and business are taking action, but to achieve the goals of the Paris Agreement a step change is needed.



Key recommendations to policymakers are:

  • Submit enhanced Nationally Determined Contributions (NDCs) by 2020, that are in line with the Paris Agreement’s goals, and are consistent with long term strategies and national policies.
    Over 50% of companies analyzed disclose that policy could present an opportunity to their business. 25% of the companies analyzed view uncertainty around policy as a financial or strategic risk driver. NDCs can provide clarity for business, by setting a clear direction of travel towards low-carbon economies, particularly when consistent with long term strategies and other national policies.
  • Ensure a conducive policy environment for globally standardized climate-related disclosure, mandating, where appropriate, the adoption of the recommendations of the Taskforce for Climate-related Finance Disclosure (TCFD).
    By disclosing through CDP, the 366 companies analyzed, along with all companies who disclose to CDP, are already providing high quality, consistent, comparable, TCFD-aligned data at scale. Disclosure requirements that embed the TCFD Recommendations within national jurisdictions would create multiple economic benefits, help to accelerate the low-carbon and climate-resilient transition, and ensure management of risks is embedded within the real economy.
  • Set a price on carbon that is consistent with achieving the Paris Agreement’s goals, as per the work of the High-Level Commission on Carbon Prices.
    Carbon pricing is the most commonly reported driver of policy-related opportunities within the 366 companies analyzed. And whilst carbon pricing is also the most commonly disclosed policy-related transition risk, companies are highly likely to report they are taking steps to manage that risk by taking action to reduce emissions. Recognizing the benefits of a carbon price and anticipating future regulation, a third of the 366 companies analyzed have already set an internal carbon price, with a further 20% planning to do so in the next two years. To achieve the global temperature target of the Paris Agreement, the High-Level Commission recommends carbon prices of at least US$40–80/tCO2 by 2020 and US$50–100/tCO2 by 2030 within the global economy.



Frequently reported climate risks



Anticipated magnitude of impact of different policy risks

CDP helps policymakers to achieve their goals and protect the climate

Learn more about CDP’s policy work
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