Pan-European analysis shows biggest companies leading on environmental action, while rest must close gap28-11-2017
● Europe well-represented on CDP’s A List of leading companies, with over 40% of all global leaders acting on climate change, water insecurity and deforestation.
● 81% of Europe’s biggest companies now have carbon emissions targets, with 23% of targets stretching up to 2035
● Climate change now a board-level responsibility for 88% of companies in 540-strong continental European sample.1
● But only leading 5% are committed to aligning their targets with climate science, and 57% are yet to respond to CDP’s climate change questionnaire.
BERLIN, November 20, 2017: The largest pan-European review of the region’s major companies’ action on climate change, water security and deforestation is published today by CDP, the non-profit holding the world’s biggest corporate environmental dataset.
Learning from the leaders finds Europe’s leading companies embedding ambitious low-carbon goals in their long-term plans as they align their carbon emissions reductions with climate science, with 81% of the region’s biggest, most impactful businesses now setting emission reductions targets.
Reflecting the holistic nature of environmental challenges facing companies, the report also highlights leading European businesses' growing accountability and performance in water management and on issues of deforestation.
The report, which includes region-by-region and industry sector-based analyses, is based on data from 540 companies disclosing on climate change, 106 disclosing on water management and 31 on deforestation.
But it finds a significant gap between the leaders, who make up 66 of the 160 companies on CDP’s global A List, and the laggards, whose environmental awareness, transparency and action remains behind.
Key findings in the analysis include:
With emissions reductions key to achieving the Paris Agreement’s goals, many companies are stepping up their response to climate change and driving innovation as they embrace and develop new tools for change.
The clear majority of companies are mapping out their low-carbon futures - 81% have emissions reductions targets for 2017, while 66% have emissions reductions targets to at least 2020. 23% of set targets are long-term to 2035, but only 8% go beyond 2036, targets which are crucial to avoid lock-in effects of current investments into high-carbon infrastructure and assets.
24% of companies now use internal carbon pricing, and a further 14% plan to do so within two years
The leaders are the 25 companies future-proofing their growth by committing to set science-based targets via the Science Based Targets initiative2, with a further 62 (11%) officially committing to do so within two years.
37% of companies now offer low-carbon products such as electric vehicles and zero-energy buildings, while 70% enable third parties to reduce emissions through their products and services.
29% of companies have a renewable energy consumption or production target, with leading companies including IKEA and Nestlé committed to sourcing 100% renewable energy by 2030 as part of the RE100 initiative.
Natural capital action is led from the board: 88% of responding companies now have board or senior management-level responsibility for climate change, with 75% using financial incentives to reach targets. 77% report board-level responsibility for water-related issues, and 81% - compared to 64% globally - for deforestation issues.
Disclosure of environmental impacts and risks is the critical first step – and it must be made complete. 68% of responders now independently verify at least 70% of their direct emissions - up from 49% globally in 2016. However, only 42% verify their indirect emissions to the same level, and value chain (Scope 3) emissions are a challenge for most, as almost half recognize at least one major emissions category not yet calculated.
Significant growth in companies taking action on water security. This year, 106 European companies reported on their efforts, up from 86 in 2016, with a jump from 6 to 24 companies making the Water A List in the same time. 81% of companies now factor water management into business strategy, and 61% set water-related targets. Yet only 49% engage with their suppliers on critical water risks and opportunities, and 53% are yet to respond.
Steven Tebbe, Managing Director of CDP Europe, said: “Since governments’ landmark agreement in Paris two years ago, European companies have made unprecedented commitments to accelerate their environmental action. This report, our first-ever holistic view on corporate environmental actions, reveals this transition’s winners and losers emerging. And it shows that the region’s best practices, from setting science-based targets and using internal carbon pricing, to engaging their suppliers to reduce water risks, are led more than ever from the boardroom.
“Moving past the leaders, the rest need to pick up the pace or risk losing out. Disclosure is the critical first step towards realizing a water-secure, deforestation-free, low-carbon world, and more than half have yet to take this step. The majority of the major businesses we assessed are behind the leaders setting long-term targets to successfully transition, although the ambition is growing. We appeal to these companies to use the tools available to align their targets with climate science, and make their business resilient to water and deforestation risks.”
Learning from the leaders: CDP Europe Natural Capital Report 2017 is available on the CDP website, alongside all rankings for the thousands of companies that publicly disclose through CDP .
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About Learning from the leaders: CDP Europe natural capital report 2017
CDP’s comprehensive 2017 analysis, Learning from the leaders, assessed a sample of 1323 companies, 540 of which responded to the request to disclose on climate change made on behalf of over 800 institutional investor signatories with assets of US$100 trillion. These responding sample companies represent 82% of the market capitalization of the sample, set in 2016 as a benchmark for corporate action on climate change representing the most significant companies in continental Europe in terms of market capitalization and environmental impact. 106 of Europe’s largest publicly listed companies, out of 227, reported to CDP’s water program, while 31 of 141 responded to the CDP forest program.
About the CDP A List 2017
The CDP A List names the world's businesses leading on environmental performance, with over 150 corporates recognized as pioneers in taking action on climate change, water and deforestation in 2017. Over 3,300 of the world's largest companies are scored from A to D-, highlighting increased corporate transparency and measurement of environmental action across the board in 2017; the number reporting to CDP rising 33% since 2013. Companies disclose to CDP at the request of over 800 investors with assets of US$100 trillion. For more see the Scoring methodologies, and CDP scores 2017.
With acknowledgements to our scoring partners in Europe: Dekra PWC, South Pole Group and ADEC Innovations.
CDP is an international non-profit that drives companies and governments to reduce their greenhouse gas emissions, safeguard water resources and protect forests. Voted number one climate research provider by investors and working with institutional investors with assets of US$100 trillion, we leverage investor and buyer power to motivate companies to disclose and manage their environmental impacts. Over 6,300 companies with some 55% of global market capitalization disclosed environmental data through CDP in 2017. This is in addition to the over 500 cities and 100 states and regions who disclosed, making CDP’s platform one of the richest sources of information globally on how companies and governments are driving environmental change. CDP, formerly Carbon Disclosure Project, is a founding member of the We Mean Business Coalition. Please visit www.cdp.net or follow us @CDP to find out more.
1 This analysis uses 540 received responses of 1,323 companies formally requested to respond to CDP’s climate, water and forest programs in continental Europe. These companies are part of a wider CDP sample of 1,800+ companies, selected in 2016 to represent the most significant in terms of market capitalization and environmental impact. The data includes companies incorporated in: Austria, Denmark, Finland, France, Germany, Hungary, Italy, Luxemburg, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Switzerland. Companies part of the FTSE 350 index in the United Kingdom are analyzed in CDP’s global report, published on 24th October 2017, which can be accessed here.
2 The Science Based Targets initiative is a collaboration between CDP, World Resources Institute (WRI), the World Wide Fund for Nature (WWF), and the United Nations Global Compact (UNGC) and one of the We Mean Business Coalition commitments. In total, over 300 companies have committed to set emissions reduction targets through the initiative.