CDP was founded on the philosophy that what gets measured gets managed; that disclosure is key to informing decisions and driving change. Our new Corporate Environmental Action Tracker (CEAT) aggregates CDP’s corporate climate data making it available to the general public for the first time; and sends clear signals to companies, investors, policy makers and civil society that more action is urgently needed. The tracker reveals a stark picture: only 5% of global emissions are covered by on-track targets.
The tracker is built on the world’s largest corporate environmental data set and draws data from nearly 10,000 companies, covering 16% of global emissions. One of the priorities for CEAT is reliable, ready-to-use data. By aggregating Scope 1 data drawn from a subset (about 50%) of the full CDP data set , only companies that disclosed sufficient and credible emissions data were included in the tracker.
The tracker aggregates and tracks climate commitments to reduce emissions, and progress along six key steps of the transition journey, from disclosure to impact, using 11 key indicators. It breaks down complex data into accessible analysis by geographies, sectors and two market indices (FTSE 100 and S&P 500) from 2019 onwards. This gives a clear indication of the leaders and laggards on climate disclosure and action.
A concentrated data set with a big story to tell
The 16% of global emissions covered in the tracker represents a core of reliable and powerful emissions data, an emerging picture of global trends that we can rely on, from some of the leading companies.
Throughout CEAT (except for the Target Impact step) we present aggregated direct (Scope 1) emissions disclosed through CDP. By their nature, Scope 2 and 3 are indirect emissions, which means two or more companies may account for the same emissions within the two different categories, creating a false impression of the total emissions when aggregated. To ensure we are comparing ‘apples with apples’, disclosed Scope 1 emissions can be simply matched against national emissions inventories. Using direct emissions therefore enables us to present the most reliable picture of progress on emissions reductions, with no fear of ‘double-counting’. (We do provide Scope 1 & 2 values in the accompanying notes on the Global and Sector charts via CEAT’s ‘tooltips’ for a more complete picture of corporate footprints.)
The insight that 16% of emissions gives should not be underestimated. Coming from less than 50% of CDP disclosers, it already amounts to more than the entire emissions of the US. If these emissions were a sector, it would equate to the output of all global transport. Through CEAT therefore, we are already able to get a clear picture of how companies are progressing against targets to reduce emissions.
We know too that these companies are not the end of the story. A significant part of remaining global emissions is being reported and addressed by companies’ Scope 3 reporting and target setting. About one third of the companies included in CEAT have set a Scope 3 target. A recent World Bank report, produced with CDP data, showed that while 10% of global emissions comes from a concentration of multinational companies’ Scope 1 & 2 emissions, these companies’ supply chains account for a further 50%.
We need to do more, faster
The tracker presents two uncomfortable but necessary truths: not enough companies are disclosing and setting targets, and current targets need to be bolder. If all actors adopted similar targets to CDP disclosers, the gap in potential emissions reductions by 2050 from where we need to be for a 1.5° future would be equivalent to the current annual emissions from China and the US combined.
The data lays bare the scale of progress required : only 60% of companies have emissions reduction targets, and only 81 disclosed a credible transition plan to get there.
However, there are green shoots to offer hope. Our first live data set features more than twice the number of assessed companies we had when we announced the tracker in 2021. This is a testament to progress and to the impact of data reporting: companies are increasingly understanding the importance of environmental disclosure and the opportunities that await those who do it well.
Business leaders are embracing the need for change, with over 90% of FTSE 100 companies and 80% of the S&P 500 included in the tracker. We know too that the proportion of global emissions covered by companies with a target that includes Scope 3 has more than doubled since 2019.
The right tool with the right data at the right time
When we first announced plans for the tracker as part of our post-COP 26 debrief, we talked about taking that conference’s mantra of shifting from negotiation to implementation and placing it at the heart of pledges, initiatives and agreements.
The following year, in COP 27 the High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities laid out pathways to action built on setting credible targets and reporting progress against those targets. Scrutiny of private sector actors for signs of ‘greenwashing’ has never been greater.
By making CDP’s rich data accessible and clearly presented, CEAT provides an essential service, enabling us all to hold non-state actors to account for tracking, assessing and delivering on meaningful climate transition.
Data, insight, action – at your fingertips
One of our aims with CEAT is to democratise CDP’s data, making a wealth of analysis available to anyone concerned with the role of corporate leadership in the future of the planet.
From corporate environmental reporting and companies demonstrating the impact of efforts to reduce greenhouse gas emissions, to investors making informed decisions about their portfolios and their environmental alignment, the tracker is a vital, free and easy tool.
This is just the beginning. We talked during that first announcement about the tracker providing a live feed, not a photograph. With each year more layers of data will help build an ever more accurate picture of the state of corporate environmental progress and help hold companies to account.
We know that climate is just one aspect of an over-arching environmental challenge. It is crucial that we tackle the climate crisis holistically, and with future iterations of the tracker we will bring together CDP’s full range of environmental data.
Just as there is no magic bullet for tackling the climate crises, CEAT does not claim to pose the answer, rather the lens through which we need to seek one. In the move from identifying a problem to having the perfect data to confront it, CEAT provides the next step, the use of credible data in responsible and responsive ways.
Updated with the latest CDP data each year, CEAT is a one-of-a-kind tool that will inform business decisions and drive accountability, supporting impactful climate action. In so doing, CEAT will not only offer a window on the emerging state of progress of corporate climate transition (and shine a light on the gaps) but provide a vital tool for us all to hold laggards to account where performance or ambition fall short.