Global corporations are in the process of transitioning to a low-carbon economy, according to a new report from CDP, but there are nevertheless large numbers still at risk of being left behind.
According to a new report published this week from global non-profit environmental data platform CDP, entitled Out of the starting blocks: Tracking progress on corporate climate action, a number of global corporations are already transitioning to a low-carbon economy, with 85% of companies already with emissions reduction targets in place. Some companies are managing to capitalize on the opportunities that an early transition away from a carbon-reliant economy affords, but CDP warns of a large number of companies that risk being left behind as a result of a lack of long-term planning and inertia. The report outlines a new baseline for corporate climate action necessary in the wake of the Paris Agreement, and further benchmarks companies’ existing progress in the transition to a low-carbon economy.
“This baseline-setting report uses data related to companies’ activities pre-Paris Agreement; it shows that while many are already on the right path, there is still a large gap to close,” explained CDP’s chief executive officer Paul Simpson. “With hundreds of companies already disclosing to CDP that they anticipate substantive changes to their business resulting from the Paris deal, we expect to see a shift to longer-term, more science-based targets in future years.”
“As investors look to reduce risk by shifting investments to less carbon intensive infrastructure, the spotlight will shine more intensely on corporate actions. There is still all to play for in the race to seize the opportunities from this transition.”
The report presents carbon emissions and climate change mitigation data from a total of 1,089 companies, disclosed to CDP at the request of 827 institutional investors with assets worth $100 trillion. The companies together account for 12% of total global greenhouse gas emissions. The report shows that of the total companies it analyzed, 62 succeeded in cutting their emissions by 10% or more, while at the same time increasing their revenue by the same margin. Taken as a whole, revenue for the group of 62 increased 29% while emissions were reduced by 26%. For the remainder of the companies analyzed, revenue decreased by 6% while greenhouse gas emissions increased by 6%.
This shows the potential for companies that are willing to commit to reducing their greenhouse gas emissions, though the report is explicit in stating, “correlation must not be taken to be causation.” Nevertheless, “it is still worth noting” that the group of 62 were so clearly able to decouple their greenhouse gas emissions reductions from economic growth — a decoupling which for decades was thought to be impossible.
“We Mean Business is delighted to partner with CDP on this report, that sets the baseline for corporate action to combat climate change,” added Nigel Topping, chief executive officer of We Mean Business, which partnered with CDP to produce the report.
“We know that global business is instrumental in creating a below 2˚C world; this report shows that some companies are already reaping the business benefits of early action on climate.
“Future editions of this report will be the tool for the We Mean Business coalition to track how companies are capitalizing on the low-carbon transition, and bringing the global economy ever closer to its climate goals.”
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