- In 2021, more than a third (37%) of companies disclosing to CDP in EU27 and EFTA reported having a climate transition plan in place
- Yet, only 2% of European companies disclosing to CDP reported on all elements that make up a credible climate transition plan in 2021
- Across the 8 key elements of a credible transition plan as defined by CDP, reporting on targets is particularly sparse. And less than one fourth of companies fully report in the areas risks & opportunities, scenario analysis and value chain engagement & low carbon initiatives
- One third of companies (34%) assess the impact of their value chains on biodiversity and 17% assess both their upstream and downstream impacts.
Berlin, 17 January 2023 - In February 2022, the European Commission published its proposal for a Directive on Corporate Sustainability Due Diligence (CSDDD). This critical piece of legislation aims to provide a regulatory framework on corporate sustainability governance.
Among key provisions of the CSDDD, Article 15 requires EU companies with 500+ employees and EUR 150 million+ in net worldwide turnover to have transition plans aligning their strategy and business models with a global warming limit of 1.5°C. It also obliges Member States to monitor companies’ operations and emission reduction plans and how the variable remuneration of executive directors is linked to the achievement of sustainability objectives.
According to CDP’s latest data, more than a third of companies in Europe (37%) report that they have a climate transition plan in place and only 2% of those companies report on all relevant transition plan indicators. CDP defined 8 key elements that constitute a credible climate transition plan. These elements can be identified via disclosure on 24 indicators found in the CDP climate questionnaire.
Sky for example, one of Europe’s leading media, technology and entertainment companies, is currently implementing and reporting on its 1.5 transition plan via the relevant indicators and is using CDP data to support its sustainability due diligence. However, less than one fourth of companies fully report in the areas risks & opportunities, scenario analysis and value chain engagement & low carbon initiatives.
While this legislation is a landmark approach for the EU’s corporate behaviour norms, extending transition planning in its article 15 to include nature would reaffirm EU’s leadership and understanding of how to effectively implement its biodiversity goals.
Mirjam Wolfrum, Director Policy Engagement at CDP Europe said : “The EU’s Corporate Sustainability Due Diligence Directive can scale up and drive comparability of transition planning, for which Article 15, requiring companies to develop a climate transition plan, must be maintained. At the same time, an extension of Article 15 to include biodiversity would lay the foundation for nature transition planning by companies, thus delivering on the goals of the Paris Agreement, and the EU Biodiversity Strategy 2030, as well as the Global Biodiversity Framework”.
CDP data reveals that just one third of companies (34%) assess the impact of their value chains on biodiversity and only 17% assess both their upstream and downstream impacts. European companies with a climate transition plan in place are equipped with the necessary tools to track progress on nature and biodiversity. The CSDDD can support them with a set of clear and coherent policy measures in their journey of aligning their business model with a net-zero and nature-positive world.
Ursula Woodburn, Head of EU relations at CLG Europe said: “Currently, thousands of businesses are signing up to net zero pledges, while in parallel citizen and NGO scrutiny of the implementation of these targets. It is clear companies must walk the talk - in the short and long term. The EU’s Corporate Sustainability Due Diligence Directive will play a key role in setting clear guidelines for companies. It will support businesses to be future proof - driving both their internal policy and structural changes to implement ambitious internal decarbonisation plans, as well as helping them see how to support policies to achieve the goals of the Paris Agreement.”
Fiona Hill, Group Director, Responsible Business, Sustainability and Social Impact at Sky added: “Businesses play a crucial role in solving the climate crisis and achieving a just transition. That is why we at Sky are committed to becoming net zero carbon by 2030 across our value chain by cutting the carbon emissions of our business and our suppliers in absolute terms by 50% to limit global warming to 1.5 °C in line with the Paris Agreement. We aim to achieve this by progressively reducing the carbon consumed by our products and shifting our suppliers to renewable energy. We welcome the European Commission’s enterprising proposal to enforce environmental due diligence within the Corporate Sustainability Due Diligence Directive. The data revealed by CDP today shows that more can be done to ensure we all safeguard the environment and Sky will remain focused on our target.”
ENDS
Notes to Editors:
CDP latest factsheet ‘Combatting the interlinked crises of climate change and nature – article 15 of the CSDDD on transition planning’: CSDDD_Factsheet
CDP 2021 Climate transition report ‘Are companies being transparent in their transition?’: 2021_Climate_transition_plan_disclosure_FINAL.pdf (cdp.net)
CDP Technical Note ‘Reporting on Transition Plans’: CDP_technical_note_-_Climate_transition_plans.pdf
For more information or to arrange interviews, please contact:
Pascale Palmer, for CLG Europe - [email protected]
Mona Monzer, for CDP - [email protected]
CDP is a global non-profit that runs the world’s environmental disclosure system for companies, cities, states and regions. Founded in 2000 and working with more than 680 financial institutions with over $130 trillion in assets, CDP pioneered using capital markets and corporate procurement to motivate companies to disclose their environmental impacts, and to reduce greenhouse gas emissions, safeguard water resources and protect forests. Nearly 20,000 organizations around the world disclosed data through CDP in 2022, including more than 18,700 companies worth half of global market capitalization, and over 1,100 cities, states and regions. Fully TCFD aligned, CDP holds the largest environmental database in the world, and CDP scores are widely used to drive investment and procurement decisions towards a zero carbon, sustainable and resilient economy. CDP is a founding member of the Science Based Targets initiative, We Mean Business Coalition, The Investor Agenda and the Net Zero Asset Managers initiative. Visit cdp.net or follow us @CDP to find out more.
About CLG Europe
Corporate Leaders Group Europe (CLG Europe) is an influential and diverse group of European businesses driving leadership on measures to deliver climate neutrality. Full members include ACCIONA, Amazon, Aveva, Ball, CEMEX, Coca-Cola Europacific Partners, EDF, Ferrovial, Iberdrola, Ingka Group IKEA, Interface, Hydro, Microsoft, Rockwool, Salesforce, Signify, Sky, Unilever, Velux. Affiliate members include, Anglian Water, DSM, Eneco, Hybrit, Lloyds Banking Group, Thames Water and Workday. CLG Europe is a founder member of theWe Mean Business coalition.