The Disclosure Dividend 2025
Assessing business resilience in a rapidly changing world
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Environmental risk is financial risk, and the costs are accelerating. Ignoring the risks will cost the global economy up to US$38 trillion by 2050 – more than a third of global GDP.
What does this mean for the average business?
In short, your bottom line.
Environmental damage is impacting financial performance. For example, the European Union’s agriculture sector is already losing €28 billion each year as a result of extreme weather. These costs are set to grow as the twin climate and nature crises become more acute.
Tackling these risks head-on will create a more resilient economy and increase companies’ ability to innovate and invest. New markets, goods and services are enabling businesses to thrive in uncertain times.
Building resilience to these urgent environmental issues now, and in the future, means three things: raising awareness of exposure, acting on the risks, and seizing the opportunities.
The following insights are based on CDP data from disclosing companies covering two thirds of global market capitalization [1]. They explore how companies can unlock the economic advantages which come from building resilience in a rapidly changing world.
What is the disclosure dividend?
The disclosure dividend is the return companies receive from disclosing and acting on their environmental risks, impacts, and opportunities. The dividend can be attained across three use cases: access to capital, business resilience and compliance.
These returns can be financial or strategic. They reward early environmental leadership. By investing in disclosure, companies unearth risks, empowering companies to respond effectively and build resilient business models.
But it goes much further than risk management, by positioning companies for growth. The disclosure dividend pays out year after year, enabling better decision-making and attracting investment. It also prepares companies for a rapidly changing regulatory landscape and helps identify new revenue streams.
Instant insight
Risky business
Global companies are already aware of how environmental risk is disrupting how they do business:
Cocoa prices have hit record highs due to extreme weather in West Africa – home to 80% of the world’s total cocoa output.
In Taiwan, droughts have shuttered semiconductor plants and forced companies to bring in water on trucks.
Insurance premiums in the United States have doubled since 2017 due to huge increases in climate-related disaster spending and federal aid.
These vulnerabilities all come at a cost, to both companies and consumers across global supply chains. Watch our video below to find out why water is so important to the technology industry:
The first step towards resilience is awareness, and companies are starting to see clearly.
Over 90% of large corporates already have a process for identifying and assessing their environmental dependencies, impacts, risks and opportunities, or intend to do so within the next two years.
From awareness comes an understanding of what the risks and the potential financial costs are.
of corporates and SMEs identified environmental risks with substantive financial effects.
of disclosing companies stated that policy was their highest perceived risk, followed by acute physical risks (19%) and chronic physical risks (14%).
These risks cover the full range of issues. Policy risks include changes to carbon pricing, increased environmental standards, or changes to national legislation. Acute physical risks can include flooding, wildfires or droughts while chronic risks can include rising sea levels, declining water quality, or changes in land use.
Acting on these risks makes good business sense. The financial impact in the short-term runs into the trillions, while the costs to addressing them are dramatically lower.
Size of the prize
For companies that have grown their awareness and acted on mitigating the risks, the benefits are reaped from consequentially accessing a new world of commercial opportunities.
Despite significant opportunities in the green economy, over half of companies do not offer low-carbon or low-water impact goods and services:
Case study: Green Century
Learn how North American mutual fund Green Century leverages CDP's corporate forests data.
Supply chain frontier
An outsized proportion of a company’s environmental impact comes from its supply chain, with 75% of a company’s emissions coming from its suppliers, on average.
Many industries have high water needs, which are often sourced in countries facing acute water scarcity. For example, 40% of the European Union's water demand comes from outside Europe.
Therefore, engagement with suppliers is an essential component of business resilience. Understanding how your value chain operates and incentivizing sustainable practices will mitigate shocks.
But this is still only a fraction of what could be saved.
CDP data shows that financial incentives are one of the most effective ways to change behaviors, yet only 11% of companies are offering them to their suppliers to improve environmental performance.
Meanwhile, our research has found that suppliers offered financial incentives were 52% more likely to cut their emissions, compared to training.
Case study: Lenovo
Learn how global technology company Lenovo has benefited from supplier engagement.
Some of the vital tools needed to boost resilience are not being fully utilized. These include:
The tools outlined above are critical for companies to capitalize on a disclosure dividend, enabling them to make informed, intelligent decisions around what works for their own business.
Market focus
The global environmental crisis is experienced locally. But the way businesses view this crisis is often starkly different, even among neighboring nations.
Japanese companies identified strong financial opportunities (US$73m per company) – far greater than their Chinese counterparts (US$9.8m).
In the European Union, companies assessed both the financial risks and opportunities as almost equal (US$59m vs US$56m).
By contrast, in the United States, the average company sees potential opportunities of around US$15m. Across the border in Canada corporates valued the size of the prize at US$71m, a potential sign of the differences in business – and political – culture between the two nations.
Case study: How Grupo Boticário recognizes best practice
Grupo Boticário, one of the largest cosmetic companies in Latin America, uses a variety of methods to engage suppliers on sustainability concerns.
As a member of CDP’s Supply Chain program, Grupo Boticário collects vital emissions data from suppliers each year. This data helps the company to better understand how to tailor its engagement strategies and ultimately meet its climate goals.
Tips for success include the following:
Strategically selecting suppliers
Choose relevant suppliers based on multiple criteria, such as market value, alignment with core values, service structure, and potential to enhance business value.
Establishing a dedicated procurement team
Create a team dedicated to fostering supplier growth and education. This ensures initiatives are not only well funded but highly prioritized within the organization.
Providing a tailored approach
Customize engagement to effectively address the unique challenges encountered by suppliers across different industries. For less mature suppliers, collaborate closely to develop tailored action plans for improvement.
Rewarding and recognizing efforts
Use awards to celebrate and incentivize suppliers' sustainability achievements. High performers not only receive recognition but also gain increased business opportunities, thereby fostering a culture of continuous improvement and innovation.
Route to resilience
The insights in this report highlight a growing shift: disclosure is no longer just a transparency exercise – it's becoming an economic imperative. As the financial case for environmental action strengthens, companies that act on their disclosure data stand to unlock measurable returns. The dividend lies not simply in awareness, but in translating insight into impact.
Global brands are taking notice, but they have a long way to go if they want to protect their businesses against the mounting financial impact of environmental risk. So far, their actions don’t reflect the gravity of the coming costs, nor the size of the investment opportunity.
Many companies approach environmental concerns without a holistic view as to what they can and must achieve. This lack of vision is preventing companies from fully capitalizing on the disclosure dividend.
A wider view needs to incorporate elements of awareness, action, and growth.
CDP’s key business resilience recommendations:
Have a process in place to manage environmental dependencies and impacts, including your value chain
Know the risks and opportunities, including where they are and their financial implications
Engage suppliers on your actions
Create a strategy and a plan based on the environmental issues uncovered – this should include key aspects of a transition plan
Create – and benefit from – new initiatives and green products as a response
Start the journey to business resilience
Disclose environmental data through CDP in 2025 and benefit from the disclosure dividend.
Footnotes
This analysis uses data derived from a subset of over 24,800 organizations that submitted environmental issue response data via CDP during the 2024 disclosure cycle.