Over 23,000 companies disclosed their environmental impact through the Carbon Disclosure Project (CDP) in 2023, a record number, the non-profit organisation has announced.
This is according to the annual update from the disclosure platform, which reports that this represents a 24% increase in the number of companies that disclosed in 2022 and an increase of over 300% since CDP was founded in 2000.
The report also confirmed that listed companies with a combined market capitalisation of $67 trillion (£55 trillion), accounting for over two-thirds of total market capitalisation, now provide some form of environmental impact data on their business through the platform.
Whilst disclosing companies are from around the world, the United States, China, and Japan continued to be the top three nations. However, the Asian landscape saw substantial growth, with South Korea and Cambodia more than doubling their participation compared to the previous year.
Sherry Madera, who took the reins as CDP’s CEO earlier this month, commented on the report, stating, “With over 23,000 businesses disclosing through CDP this year, it is clear that sustainability – and the data that underpins it – is not a ‘nice to have’, but an essential part of long-term success in the business community.”
“This trend is showing no sign of slowing down – nor should it.”
However, while reporting across the three key areas of climate change, water security, and deforestation has increased, only 1% of companies reported on all three areas, underlining the need to enable better disclosure on nature.
Businesses aren’t alone in upping their disclosures. The report also highlights how city, state, and regional disclosures have also increased, reaching over 1,100 in close to 100 countries. This covers cities from Austin to Auckland, and states and regions in each continent – such as Latin America, where nearly 90% of the Brazilian Amazon is covered by regions reporting to CDP.
The news comes just days after the Taskforce for Climate-related Financial Disclosures (TCFD) released its final status report, finding that 57% of the world’s listed companies now report climate risk in alignment with five or more TCFD recommendations. However, similar to CDP’s report, the TCFD found that only a small minority of companies fully comply with all recommendations.
Beginning in 2024, the International Sustainability Standards Board (ISSB) will assume responsibility for monitoring climate-related disclosures. CDP has confirmed it is aligned with the TCFD recommendations and that its 2024 questionnaire will align with the ISSB’s climate disclosure standard (IFRS S2). From next year, it will also start to reflect the Taskforce on Nature-related Financial Disclosures (TNFD) framework, encouraging more companies to report across both climate and nature matters.
Despite progress, more corporate action is needed on climate. In early 2023, CDP released its Corporate Environmental Action Tracker, which aggregates and tracks climate commitments and actions taken by companies to reduce their emissions as detailed in their disclosures. The tracker found that only 24% of disclosing companies, covering 5% of emissions, are on track to meet their targets.
You can read the full release here.
