Most corporations that disclose knowledge on their local weather dangers and dependencies are failing to report their impacts on nature, regardless of rising consciousness of the deep hyperlinks between the worldwide biodiversity and local weather crises.
That’s the conclusion of a research launched by the environmental disclosure platform CDP, which reveals an enormous gulf between the extent of local weather danger knowledge disclosed by corporations, and the quantity of knowledge offered on nature impacts.
Environmental disclosures to CDP’s platform surged final 12 months by virtually 1 / 4 — 24 p.c — with 23,000 corporations comprising two-thirds of worldwide market capitalization submitting data to CDP’s platform.
Nonetheless, most corporations disclosing such knowledge to CDP stay centered on local weather danger, and are failing to measure and publicly disclose the impacts and dependencies of their enterprise on water, forests and nature, the research suggests. Simply 38 p.c of corporations that reported data to CDP in 2023 offered knowledge past local weather, it mentioned.
That’s regardless of environmental danger reporting providing vital enterprise advantages, with 63 p.c of companies disclosing local weather knowledge, 73 p.c disclosing forest knowledge and 50 p.c disclosing water knowledge reporting alternatives that maintain potential for “substantive monetary and strategic affect” inside the group, CDP mentioned.
And throughout all three of those areas — local weather, forest and water — the research discovered the price to handle dangers was decrease than the potential monetary affect of dangers turning into actuality.
“To really deal with the environmental challenges, organizations should quickly embrace a extra complete method to environmental disclosure,” mentioned Sue Armstrong-Brown, director of thought management and affect at CDP. “This consists of going past solely local weather to sturdy disclosure on nature. With the launch of the Taskforce on Nature-related Monetary Disclosure [TNFD] suggestions and extra regulation increasing to incorporate nature-related disclosure, corporations not making ready are set to lose out.”
Elsewhere, in the meantime, CDP’s newest insights spotlight an upward pattern in corporations reporting on their power use, with 13,000 corporations in whole reporting on power consumption in 2023.
Nonetheless, 44 p.c of corporations that submitted knowledge to CDP’s platform in 2023 are nonetheless not reporting on their power use, regardless of this data being important for traders to realize an understanding of company environmental affect and danger publicity, it mentioned.
And of the businesses that did disclose power knowledge, simply 10 p.c have a renewable power goal in place, whereas 31 p.c mentioned none of their power consumption got here from renewables.
The findings additionally reveal that, of 575 monetary establishments that disclosed by CDP in 2023, half reported an estimated $9 trillion of their monetary portfolios had been linked to fossil fuels — a determine roughly equal to the mixed GDP of Japan and Germany.
Armstrong-Brown mentioned the disclosure knowledge confirmed that “company ambition to part out fossil gasoline continues to fall brief.”
“However COP28 is a brand new alternative to speed up the shift to renewable power consumption,” she added. “We have to see the G20’s name for a tripling of renewable power capability mirrored in demand-side targets for transition to renewables with the intention to assist the phase-out of fossil gasoline use.”
In associated information, the Worldwide Sustainability Requirements Board (ISSB) immediately revealed that a whole bunch of corporations, inventory exchanges and organizations have publicly endorsed its climate-related knowledge reporting requirements since they had been printed earlier this 12 months.
Launched in June, the ISSB’s inaugural requirements — IFRS S1 and IFRS 2 — have been publicly backed by plenty of corporations, jurisdictions and different market gamers, together with the worldwide physique for worldwide securities regulators, IOSCO.
The 2 requirements intention present a transparent, holistic framework to allow company sustainability-related reporting for use alongside annual statements and accounts at a world degree in the identical reporting bundle, in line with the ISSB. Greater than 140 corporations are already making ready public disclosures towards the requirements, whereas plenty of governments — together with the U.Okay.’s — have dedicated to aligning reporting laws with the ISSB’s suggestions, the physique mentioned.
Right this moment, furthermore, near 400 organizations from 64 jurisdictions have additional dedicated to advancing the adoption or use of the reporting requirements at a world degree by signing a “declaration of assist” for the requirements printed on the sidelines of the COP28 UN Local weather Summit.
The signatories to immediately’s declaration embody greater than 40 skilled accounting organizations, 25 inventory exchanges and investor membership teams with greater than $120 trillion of belongings below administration, in line with the ISSB.
ISSB chair Emmanuel Faber, former CEO of Danone, mentioned the sturdy assist for the declaration was “a sign of the urgency behind our work and affirmation that the ISSB Requirements can ship a significant world resolution within the want for higher details about the dangers posed by local weather.”
“Market contributors have persistently advised us by session that they want world sustainability disclosure requirements which might be proportionate and scalable,” he mentioned. “The ISSB Requirements present this and with the assist of organizations around the globe we are going to work to construct the market infrastructure and capability constructing essential to implement the requirements worldwide.”
