Joint research from Capgemini Invent and non-profit CDP has found European businesses are increasingly disclosing their emissions to CDP, but are still struggling to set impactful actions for important emissions hotspots.
The study, “From Stroll to Sprint: A race against time for corporate decarbonisation,” analysed the corporate decarbonisation strategies in Europe across 17 sectors, and how they evolved between 2019 and 2022. Companies included represented approximately 75-80% of the total market capitalisation in the EU.
According to the results, an overwhelming majority (92%) of emissions disclosed by European companies in 2022 were scope 3 (indirect emissions), with the use of sold products (57%) and purchased goods and services (17%) cited as companies’ key hotspots.
While there has been a 56% increase in emissions disclosures to CDP over the past three years, the study found that only 37% of Scope 3 emissions are currently being covered by decarbonisation measures.
“Our analysis reveals that although some fast progress has been made by leading companies, particularly on science-based target setting, the majority need to take more decisive action to address their Scope 3 emissions quite promptly,” said Maxfield Weiss, CDP Europe executive director.
“With the urgent need to align corporate decarbonisation with the 1.5 °C limit, companies need to set out clear climate transition plans now that will deliver the reduction we need to keep our economy and society safe.”
The study also found that while overall companies are making progress in reducing the environmental impact of their operations, with up to 40% reduction in Scopes 1 & 2 emissions achieved mostly through energy efficiency measures, there is still major room for improvement.
For example, in 2022 renewable energy covered less than a third of the energy used in the vast majority (70%) of sectors analysed, suggesting there are still major reductions in emissions to come through sourcing renewables.
The standard of net zero targets
The study found 47% of companies reported having emissions reduction targets approved by the Science-Based Targets initiative (SBTi), compared to just 14% in 2019. However, these targets cover only 13% of the total greenhouse gas emissions disclosed by companies to CDP in 2022.
Despite their uptake, credible net zero targets are still in their infancy, with the report suggesting only 8% of companies reported having set net zero targets approved by the SBTi, and a further 14% awaiting target validation. Although the number of companies disclosing to CDP has grown, almost one quarter (23%) still lacked any emissions reduction targets in 2022.
The study concluded while there is a clear trend towards increased decarbonisation transparency among European businesses, there is still a significant gap between transparency and action.
The full report is available for download here.
About CDP and Capgemini
CDP (formerly the Carbon Disclosure Project) is a global non-profit organisation that helps companies, cities, states, regions, and public authorities disclose their environmental impact. CDP’s data is used by investors, businesses, and policymakers to make informed decisions about climate change.
Capgemini is a multinational consulting, technology, and outsourcing services company that helps businesses of all sizes transform their operations, improve their customer experience, and drive growth. Capgemini Invent is a Gold accredited Service Provider by the CDP for its expertise on Climate Change Consultancy
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