Corporations based in Europe are among those most likely to be making significant climate-related commitments and progress, with as much as 75% of Europe’s largest corporations acknowledging “transition” risks such as new climate legislation will meaningfully affect their businesses.
These are the key findings from the latest European Report published this week by non-profit environmental disclosure platform CDP, formerly known as the Carbon Disclosure Project, based on analysis of environmental disclosures from 859 European corporations based in 24 European countries — a figure which plainly presents a representative picture of behavior in Europe. Further, half of CDP’s 2018 “A List” is based in Europe, and 45% of companies with approved science-based emission reduction targets are also based in Europe, highlighting the region’s tremendous importance for corporate-level action on climate and the environment.
Of those reporting to CDP, 75% now believe that “transition” risks such as the prospect of new climate legislation will have a meaningful impact on their businesses. In an effort to appropriately manage these risks, 47% of companies now incentivize their C-suite, CEO, and board members to manage climate issues, while 25% incentivize meeting climate targets financially.
CDP’s Europe Report 2018 also found that, by 2020, 72% of companies disclosing to CDP will be using different climate scenarios to inform their business strategies. Further, almost 90% of European corporations see business opportunities resulting from climate change, including almost 50% which expect more demand for lower-carbon goods.
“The next decade is vital if our shift to a sustainable economy is to be successful, and companies lie at the heart of this transition,” said Steven Tebbe, CDP Europe Managing Director. “Companies on the A List show that environmental and economic leadership go hand in hand, with the A List-based STOXX Global Climate Change Leaders Index having outperformed the STOXX Global 1800 by 5.5% per annum from 2011 to 2019.”
“Europe is home to some of the world’s most ambitious corporates, showing transformative leadership on sustainability issues and finding new ways to prove that profitability doesn’t have to come at the expense of the planet,” added Tom Delay CBE, Chief Executive at the Carbon Trust. “But even in a part of the world where there is an almost unique combination of committed businesses, comparatively strong environmental policy frameworks, and citizen support for action, progress is still not happening quickly enough. While some leaders are showing the way forward, many others are only just starting to take their first steps on the journey, or moving too slowly along the pathway to sustainability. Others must follow rapidly in the footsteps of those leaders if we are to tackle one of the most urgent global challenges we face today.”
The need to increase the scale and pace of climate and environmental ambition is highlighted in CDP’s figures which show that 53% of reporting corporations still do not have a target for their absolute emissions — and of those that do, only a third have targets that reach beyond 2025.
“In Europe we see many companies taking a leadership role on climate change, water security and deforestation,” said Steven Tebbe, Managing Director of CDP Europe, speaking to CleanTechnica via email. “Around 50% of all CDP A List companies are based in Europe, while around 1 in 5 companies we analysed in this year’s report have either already set or are officially committed to setting a science-based target. We are seeing growth in public commitments to SBTs at around 65% a year in Europe, so clearly this is becoming best-practice and a market norm. Yet still in Europe, a majority of companies analysed in this report have not set targets for reducing their absolute emissions. The more that leaders can step up and commit to setting targets in line with climate science, the faster other corporate peers in Europe and around the world will feel the pressure from investors and customers to raise their ambitions to reduce their impact.”
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