As the world experiences increasing instances of global warming and extreme weather, it’s encouraging to see more business leaders stepping up to support a sustainable and resilient future.
2023 was a record-breaking year for CDP, with companies disclosing through CDP reaching unprecedented numbers globally. This includes more than 8,000 companies from 17 markets across the Asia - Pacific region (APAC), marking an impressive 30% increase from last year. Most countries (15 out of 17) in the region saw an increase in disclosure numbers.
South Korea, Vietnam, and Cambodia led the way with the greatest relative increases in CDP disclosures. Meanwhile, China, Japan, and South Korea saw the largest absolute jumps. Nearly 40% of A List companies are from the APAC region, with Japan leading across all themes (Climate Change, Forests, Water Security).
The region now accounts for 30% of CDP’s global corporate responses, signalling robust awareness across its key markets, which are among the world’s fastest-growing economies.
Regional challenges and progress in climate goals and emissions reporting
Home to the world’s fastest-growing economies and considered one of the most vulnerable regions to the adverse impacts of climate change, the APAC region must rise to the challenges of net-zero and nature-positive transition.
Progress on climate transition plans remains limited, with only 30% of corporates disclosing through the 2023 Climate Change questionnaire reporting a transition plan. Notably, Japan has led in climate transition planning for the third consecutive year. However, the region shows promising engagement in emissions inventory and target setting. Compared to 2022, the proportion of companies disclosing Scope 1 and 2 emissions increased by 3% and 4%, respectively, with 73% of Asian companies reporting Scope 1 emissions and 67% reporting Scope 2 emissions, both higher than global averages. Additionally, more than half (58%) of Asia-Pacific companies reported having active emissions reduction targets, and the number of companies with validated science-based targets increased by 35% from 2022 to 2023.
Scope 1 and 2 emissions reporting rose by 3% and 4%, respectively, demonstrating some progress on emissions disclosure. APAC companies outperform global averages, with 73% reporting Scope 1 emissions (compared to 67% globally) and 67% reporting Scope 2 emissions (compared to 62% globally). However, Scope 3 emissions disclosure in Asia (39%) still lags behind global numbers (42%).
Emissions reduction targets are on the rise, with 58% of companies having active targets. From 2022 to 2023, there has was a 35% increase in validated science-based targets. However, while staying within 1.5°C remains a key goal, science-based target adoption across the cohort has stagnated, and less than a third of companies having financial plans in place to support transition goals.
Progress in nature-related disclosures and supply chain sustainability in the Asia Pacific region
Despite the impressive growth, less than 30% of nearly 8,000 APAC companies disclose nature-related issues, highlighting the need for a broader environmental focus. Addressing climate change and nature loss together is crucial in the Asia - Pacific region due to its rich biodiversity, economic reliance on natural resources, and high vulnerability to climate impacts.
The report reveals that nature-related disclosures, such as water security, are steadily increasing, with a 26% rise compared to the previous year, and are keeping pace with climate disclosures. There have been slight improvements in water security actions, with key steps like realized opportunities and public water policies seeing an increase of around 2%.
There have been slight improvements in water security actions, with key steps like realized opportunities and public water policies.
Many companies are making strides towards deforestation- and conversion-free supply chains, with notable progress reported. There has been a 1-5% increase in preventive measures, and certifications for no-deforestation standards has surged by 5%, showcasing responsible sourcing practices. Strong traceability is essential for meeting forest risk commitments. Currently, 68% of Asia-Pacific companies have traceability systems, marking a 2% rise.
Despite a slight dip in value chain actions, direct supplier engagement remains crucial for meeting deforestation commitments. In water security, value chain actions are gaining momentum, with a 6% increase in corporate engagement, although mainstream adoption remains limited.
Enhancing climate and nature-related disclosures in Asia - Pacific is important for a sustainable future
As we enter a new decade since the adoption of the Paris Agreement, it is crucial for countries, companies, and financial institutions to continue implementing and expanding long-term decarbonization strategies and green finance initiatives. Equally important is the need to integrate nature-based solutions and protect biodiversity, as these efforts are essential to achieving a net-zero and nature-positive future.
CDP remains committed to aiding businesses worldwide in their pursuit of climate resilience. This will be achieved by enhancing transparency, encouraging comprehensive disclosures, and setting bold targets that align with the latest climate science.
Unlock more insights from the report “Forging ahead: Environmental disclosure trends in Asia- Pacific 2023” and join us for the “2024 Wrap Up: Trends and Outlook on Environmental Disclosure and Action for Asia Pacific” webinar, where we will discuss the latest public disclosure results from the report and insights from global events like COP16 and COP29.
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