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CDP: Water is rising up the corporate agenda

  • CDP: Water is rising up the corporate agenda
  • 272 out of nearly 12,000 scored companies recognized on CDP’s annual A List.
  • Water and forests rising up the corporate agenda, as more companies than ever taking leading action.
  • 14 pioneering companies awarded Triple A scores for their work across climate change, forests and water security.
  • Fall in number of corporates on climate A List as bar is raised on climate leadership.
  • A record 13,000+ companies reported environmental data through CDP in 2021. But nearly 17,000 worth US$21 trillion still failing to disclose.

About the entity

CDP Disclosure Insight Action
CDP is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts.


272 companies worldwide - worth US$12 trillion in market cap - have been highlighted for their environmental leadership, based on their level of transparency and performance on climate change, forests and water security.

These leading companies have been named on CDP’s prestigious annual A List, and are among nearly 12,0001 ranked A to D- on their environmental performance by CDP – the non-profit that runs the world’s environmental disclosure system for companies, cities, states and regions.

Some big names on CDP’s A List include Diageo, Infosys, PepsiCo, TETRA PAK, AstraZeneca, Colgate Palmolive and Lenovo Group.

Nature had a clear seat at the table at this year’s COP26 summit, and the Glasgow Pact as well as the IPCC’s Sixth Assessment Report made it clear that environmental issues are interconnected and must be managed together. Companies gradually seem to be recognizing this and adopting a more holistic approach to reporting. 14 pioneering companies - including L'Oréal, Unilever, HP and Lenzing AG - achieved a triple A for their performance on all three environmental themes in 2021, an increase on last year’s record of 10. What’s more, the number of companies on CDP’s Forests A List rose from 16 to 24 while the Water A List grew from 106 to 118.

The number of companies on the Climate A List has dropped from 280 last year to 200 in 2021, as the consensus on what qualifies as climate leadership has evolved and the bar raised. Much of the low hanging fruit at companies’ disposal has now been utilised and more ambitious action is urgently required. Among other criteria, to score an A, companies must have robust governance and oversight of climate issues, rigorous risk management processes, verified scope 1 and 2 emissions and be reducing emissions across their value chain. Most also now have well established emissions targets that have been approved by the Science Based Targets initiative, and evidence of targets which cover their scope 3 emissions.

It is encouraging to see that many other companies made a significant improvement in the quality of their disclosures this year

It is encouraging to see that many other companies made a significant improvement in the quality of their disclosures this year and moved up in the rankings. 509 companies improved their scores from a C or below in 2020 to a B in 2021, meaning they have advanced from merely disclosing and being aware of their environmental impact, to taking action to manage it.

While it is positive to see the leadership of some pioneering companies, and the efforts of others to improve, these companies represent only the tip of the iceberg. Just 2% of all scored companies made the A List, and 58% scored between C and D-, meaning they are only just beginning to recognize their environmental impact. It is also concerning that 16,870 companies worth US$21 trillion in market cap – including Chevron, Exxon Mobil, Glencore and Berkshire Hathaway – failed to respond to the request for information from their investors and clients, or provide sufficient information in their response.

These non-disclosing companies are now going against a tide of change, with a series of environmental disclosure requirements being developed and announced at COP26 and throughout 2021, as well as more companies than ever disclosing environmental information every year. CDP recorded over 13,000 corporate disclosures, representing some 64% of global market capitalization in 2021 – an all-time record. In addition, there is rising market demand for corporate environmental transparency. More than 590 investors with over US$110 trillion in assets and 200 major buyers with US$5.5 trillion in procurement spend requested corporate environmental data through CDP in 2021.

Just 2% of all scored companies made the A List, and 58% scored between C and D-

Companies that publish their environmental data consistently and on an annual basis can protect and improve their reputation, get ahead of regulation, boost their competitive advantage, uncover risks and opportunities, track and benchmark progress and get access to lower costs of capital. There is also evidence to suggest that companies that score highly on environmental metrics perform well financially. The Stoxx Global Climate Change Leaders index, which is based on CDP’s A List, has seen an average annual return that is 5.8% higher than its reference index over the past eight years.2

Dexter Galvin, Global Director of Corporations & Supply Chains at CDP, said:
“COP26 highlighted the necessary role corporates play in driving the real economy changes to tackle the climate and ecological emergency, and keep us within 1.5°C. It is fantastic that more businesses are disclosing their impact every year and recognizing the interconnectedness of environmental issues. We now need to see even more ambitious action on climate, and more businesses stepping up on other areas of natural capital. 17,000 corporates failing to even take the first step and report their environmental data is far too many. These companies are not only putting the planet at risk, but themselves. If they continue with business as usual, they will end up on the wrong side of public opinion, regulation and investor sentiment. And scrutiny is rising - empty targets or greenwash simply won’t fly.”

Some examples of environmental action from companies on the A List include:

  • In December 2020, Unilever implemented a climate transition plan to help reach its net-zero target. In May, it was put to a vote at the AGM and received an overwhelming 99.6% approval rate.
  • Landsec, the property development and investment company, has established a voluntary internal price on carbon of US$107.50/tonne (£80) to help drive its activities towards the practices required to limit the most dangerous effects of climate change.
  • Amaggi, the Brazilian commodities company, has integrated geospatial tools and data into 100% of its purchasing decisions, cross referencing its suppliers against their environmental impacts. This allows Amaggi to ensure traceability as well as monitor and manage potential deforestation across its value chain.
  • In 2021, Kao Corporation, the chemicals and cosmetics company, commenced support for approximately 800 small-scale plantations in Indonesia to acquire sustainable palm oil (RSPO3) certification with the aim of doing so for 5000 plantations in the region by 2030.
  • Fujitsu Limited, the IT service company, works across its value chain with clients in Asia to find solutions for areas increasingly experiencing water issues e.g. The Jakarta State Disaster Prevention Bureau uses Fujitsu’s disaster information management system to establish timely and accurate responses to natural disasters.
  • Owens Corning, the world's largest manufacturer of fiberglass composites, has incentives for the CEO and CSO to reduce water usage as it relates to the company’s 2020 and 2030 goals. The performance indicators relate to the reduction of water withdrawals, reduction in consumption volumes and improvements in efficiency across direct operations.

Alan Jope, CEO of Unilever, said: “Business can only thrive on a healthy planet. Unilever sees CDP as a key partner in delivering the change business needs to make, working with some of the most influential companies, cities and regulators to build sustainable economies. We’re delighted that Unilever has been awarded Triple A status for our approach to climate action, water security, and forestry. And it’s great to see so many other companies on the list, indicating a real step change in ambition and shared accountability as we gear up to a net-zero world.”

James McCall, Chief Sustainability Officer at HP Inc., said: “To drive change, companies need to take decisive and urgent action to support the communities we serve, and the natural ecosystem we all depend on. We believe that purpose driven companies should lead by example, creating a path for our supply chain, business partners, and customers to join us. Being recognized on CDP’s A Lists for Climate, Forests and Water for the third consecutive year is an honor, and serves as further motivation for us to continuously raise the bar. CDP’s robust disclosure process is an important mechanism to drive accountability as we strive to be the world’s most sustainable and just technology company.”

CDP scores companies based on a transparent methodology covering disclosure, awareness, management and leadership. Between now and 2025, to support the need to reach net-zero emissions and full nature recovery by 2050, CDP will develop its scoring methods to focus even more on tracking against scientific benchmarks and pathways reflecting companies’ historic, current and projected impacts; product portfolios; and investment and transition plans. These scores will provide a clear assessment of a company’s ambition and how they are performing against targets, driving greater credibility and accountability.

As part of its new five-year strategy, and to help tackle the climate and ecological emergency, CDP will also be expanding its work to cover more environmental issues. This will include land, oceans, biodiversity, resilience, waste and food.

Olivier Mariée, CEO of CPR Asset Management, said: “As an asset manager, we are strongly committed to support, through our investments, the advancement of the Paris Agreement goals. Since our launch of the CPR Invest – Climate Action international equity fund with CDP in 2018, CDP’s scores have been central to our designing of credible, impactful climate investment solutions across all mainstream asset classes. The expanding breadth of their coverage is of critical importance in building diversified and robust investment universes, and their data and modelling provides an insightful source of information to select companies that are ahead of the transition towards a low-carbon economy.”

Carola van Lamoen, Head of Sustainable Investing at Robeco, said: “Investor expectations on climate, water, biodiversity and deforestation data have risen drastically in recent years and there is no doubt that this will continue. Robeco supports CDP in its efforts to enhance transparency and comparability in companies’ environmental disclosures. The reporting framework CDP provides enables companies to stay abreast of the growing investor demands for sophisticated disclosures on environmental risks and impacts. For us, CDP is a valued source of information that provides insights into environmental risk management practices and performance across a set of indicators, and supports our engagement with companies.”

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