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Home > Out of the starting blocks: Tracking progress on corporate climate action report
Out of the starting blocks
Read the first global report showing: the current state of play for corporate action on climate change; how prepared companies are for the low-carbon transition; and which companies are already starting to reap the benefits.
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2 hour read

Out of the starting blocks
Tracking progress on corporate climate action

The low-carbon revolution is upon us and the way we do business has transformed forever. Are companies ready for the momentous changes ahead?

This report sets the baseline for corporate climate action following the Paris Agreement, ratified at unprecedented speed by the world’s biggest emitting countries. It is a benchmark for companies’ progress in the transition to a low carbon world and for tracking their progress in the years to come.

Discover if companies are ready for the inevitable shift to a below-2-degree world. Find out who is leading the way, gaining a competitive advantage from reducing their emissions, and who is falling dangerously behind.


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1,089
companies who disclosed data to CDP are included in this report
Their progress on climate action will be tracked in future against this year’s baseline.
12%
of global GHG emissions are represented by these companies
Presenting real potential for significantly reducing global emissions if meaningful action is taken.
1Gt
if companies meet their targets
The same as the emissions produced by 291 coal fired power-plants in a year. However, this is only 25% of necessary reductions to meet below-2°C goals.
The Business Case for Climate Action
For the last four years, Philips has been recognized by CDP for its integrated climate change strategy ... Achieving these ambitions has required a new way of doing business – one that moves away from the traditional way of working ... We must continue to innovate and build on the momentum we’ve achieved.
Frans van Houten, CEO, Royal Philips


See transition as an opportunity, rather than a restriction.

Companies tackling climate change will be more attractive to investors, capitalize on new business opportunities and revenue streams, and build resilience for the future. New regulations and policies resulting from the Paris Agreement will mean a change in business practices is inevitable and those able to adapt will thrive. Fundamental changes to the way we do business can result in significant emissions reductions without any negative impact on revenue - in fact, it can mean quite the opposite.

Business benefits of reducing emissions

Over a five-year period, 62 companies in our sample have succeeded in decreasing emissions whilst also increasing revenue. This highlights the opportunity for innovative companies to turn the challenge of emissions reduction from risk management to business success.

Host Hotels & Resorts Inc. The US real estate company saw revenue growth of 22% over five years alongside a 23% drop in emissions, with overall emissions intensity falling by 37%. The company has a science based target in place to reduce its scope 1 and 2 emissions on an emissions per square foot basis 28% by 2020 from a 2008 base-year

Other notable companies revealing that the low-carbon transition can bring high returns are SSE, SCA and Wipro.


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29%
increase in revenue
Shown by companies that met the “decoupled growth criteria” in our sample.
26%
reduction in GHG emissions
Shown by these same companies.
6%
decrease in revenue and increase in GHG emissions
Was found to be the average for all other companies.
Business taking action

CLP is another company that has recognized the importance of gearing up to go low-carbon. They are taking action to ensure they don't risk being left behind in a changing business climate.


Richard Lancaster, chief executive of CLP Holdings, explains how the company is taking serious steps to address business practices in the light of the climate crisis, with the aim of lowering its carbon intensity by 75% (from 2007 levels) by 2050.

“Our approach is to reduce the carbon intensity of our business progressively over time and at a pace that’s consistent with the objective of stabilizing global temperature. We aim to work towards a target and at a pace that the consensus of scientific opinion determines is right ...

With the Paris Agreement on the way to ratification, coupled with the renewed effort going into the science of temperature stabilization, this is a good time for us to review our targets and our technology roadmap ... If you’re embracing change, if you’re adapting your business with it, you should be in a good position to find new business opportunities."


Setting more ambitious targets is vital

85% of the 1089 companies that disclosed data for this report have already set targets for emissions reduction. This is a significant improvement on previous years.

In this report we have recorded existing targets and analysed their potential impact in helping to limit global warming to 2℃. Over the next five years, we will continue to track these companies to see how they perform and whether any further targets are made.


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85 %
of companies have set emissions reductions targets
But how many of these targets are ambitious enough or are backed up by realistic long-term plans?
14 %
of companies have targets set out as far as 2030 or beyond
Meaning only a small number are thinking long-term.
94
companies have set long-term goals based on climate science
by committing to greenhouse gas reduction targets via the Science Based Targets Initiative.

Unambitious targets or unrealistic plans for meeting them could mean that future progress will fall short.

Whilst current targets may not be on track to meet future goals, given that this data mostly predates the Paris Agreement, we can hopefully expect significant steps towards meaningful action in subsequent years.

For companies considering the transition to a low-carbon economy, long-term targets are the compass they should be using. Targets help companies understand where they are, can guide them to their destination, and check they are on-course during the journey.

For this reason, it is important that targets should be set with the ultimate destination in mind - that of limiting global warming to 1.5°C-2°C.


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Current targets set by disclosing companies are still only 25% of the way to meeting necessary emissions reductions.


Will the Paris Agreement help companies step up and close this gap?

The current level of targeted emissions reductions is an improvement on previous years. The total reduction targeted has consistently increased from 2011 to 2016. If current targets are met by disclosing companies, emissions reductions of 1Gt CO2e (1,000 MtCO2e) could be realized by 2030.

However, this is only about one quarter of the 4,145 MtCO2e of reductions that this group of companies would need to achieve in order to be in line with a 2°C-compatible pathway. So despite this improvement, efforts are still insufficient.

As existing commitments by the business sector were made before the Paris Agreement, goalposts will be shifting dramatically. As companies factor in the implications of the Paris deal we would hope to see a greater shift to longer-term, more science-based targets in future years.

Elzen, Michel den; Admiraal, Annemiek; Roelfsema, Mark ; van Soest, Heleen; Hof, Andries F.; Forsell; Nicklas (2016) “Contribution of the G20 economies to the global impact of the Paris agreement climate proposals”, Climatic Change (2016) 137:655–665, DOI 10.1007/s10584-016-1700-7

The choice facing companies and investors has never been clearer: seize the opportunities of a carbon-constrained world and lead the way in shaping our transition to a sustainable economy; or continue business as usual and face serious risks.
Paul Simpson, CEO, CDP

How can companies close the gap and move more assertively towards the destination of a below-2-degree world?

Emissions reductions are often talked about at the country level, and national governments will obviously lead with policy changes and regulation. However, companies are among the biggest emitters and they can move much faster than governments, meaning they are in a better position to start acting and implementing change.

Increasing ambitions and long-term planning for target-setting is of course key to start closing this gap. In this annual report, CDP will be monitoring the adoption of targets based on the most up-to-date climate science (“science based targets”) alongside levels of engagement with other primary tools and initiatives available for companies to step up their emissions reductions, such as the use of internal carbon pricing, and renewable energy production and consumption.


Science Based Targets
A tool to help companies align GHG reductions with global emissions budgets generated by climate models.
Renewable Energy
Targets for replacing existing energy sources with renewable energy should form a large part of any transition strategy
Internal Carbon Pricing
A tool for helping companies internalise the external cost of carbon emissions.

Whilst there’s still some way to go in order to bring goals and actions in line with the Paris Agreement, many companies are already taking meaningful action with many more expected to join them in the coming years.


Regional reports

Explore insight from CDP offices around the world

CDP's A List

Alongside the report, CDP is also launching its 2016 Climate A List which comprises those companies identified as A grade for their actions in mitigating climate change. Following an independent assessment against CDP’s scoring methodology, 193 companies have made the list.

Some notable names that feature on CDP's A List include:

Apple

Colgate Palmolive Company

Nissan Motor Co.

Sky

Sony

Wipro

See CDP’s full A List for other leading companies.


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Disclosure has never been more important

Meaningful action starts with transparency. However, this benchmark report reveals that a number of companies aren’t engaging even with this critical first step of disclosure. CDP will track the 700+ companies that did not respond to its investor-backed disclosure request to see how many begin to take the first steps towards a sustainable future over the coming years.

The three largest companies by market capitalisation that did not respond to CDP’s request for information are:

- Amazon
- Berkshire Hathaway
- Facebook

Read the full list of non-disclosing companies.

Case studies

These case studies are collaborative content supported by the companies featured.


Case study: Braskem
Braskem aims to be among the best large chemical companies in the world in terms of GHG emissions intensity.
Case study
Case study: Carrefour
Carrefour group set a voluntary target of reducing CO2 emissions by 40% by 2025 compared to 2010 levels.
Case study
Case study: China Mobile
Having the largest scale of networks and customer [in China], China Mobile has been making great efforts to address climate change.
Case study
Case study: Daimler
We are committed to play a decisive role in this transformation towards a more sustainable mobility.
Case study
Case study: Deutsche Telekom
Deutsche Telekom plays a fundamental role in driving the global sustainability agenda
Case study
Case study: Kingspan Group
In 2011 Kingspan set an ambitious target to achieve Net-Zero Energy across all of Kingspan’s 90+ manufacturing sites around the world by 2020.
Case study
Case study: L’Oréal
Last year, just before COP21, we made a new commitment to become a “carbon-balanced” company by 2020.
Case study
Case study: Metsä Board
The forest industry plays a notable role by offering sustainable products and solutions to help with reaching the goals set.
Case study
Case study: Novartis
Novartis has embedded climate change into its corporate strategy and set a Vision 2030 for Environmental Sustainability.
Case study
Case study: Novo Nordisk
Novo Nordisk has committed to set a science-based emission reduction target in line with the Science Based Targets Initiative’s criteria.
Case study
Case study: Santander Brazil
Santander Brazil is committed to the goals of the Paris Agreement through concrete and viable solutions.
Case study
Case study: Stanley Black & Decker
We aspire to be one of the most sustainable companies in the world, and see our inclusion in CDP as an important step in that direction.
Case study
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