New CDP data suggests governments can kickstart green growth by publishing more ‘investible’ climate plans (NDCs) at COP29
- Financial impact of climate-related opportunities seen by world’s largest companies more than doubles in 5 years
- Companies identify an average of over $3 billion each in climate opportunities
- Number of companies disclosing data through CDP grows to 24,800 companies in 2024, representing over 66% of total global market capitalization
November 13, 2024 (London): Companies are eyeing more business opportunities from tackling climate change than ever before, with the world's biggest businesses now identifying nearly $5 trillion in potential gains, according to data released by CDP as governments meet in Azerbaijan for COP29.
Expectations have increased substantially, with the world’s largest 500 businesses raising the potential financial benefits they see from $2.1 trillion in 2018 to $4.8 trillion in 2023 – more than doubling (127%) in the past six years.
The analysis comes from CDP, the non-profit which runs the world’s environmental disclosure system, based on listed companies representing over two thirds of global stock market value and thousands of private companies.[1]
Looking at this wider group of all disclosing companies, opportunities totalling $16 trillion were identified last year – a figure equivalent financially to the GDP of Germany, India and Japan combined.
On a per-company basis, the average financial amount identified stands at $3.1 billion, with the most impactful opportunities related to shifting products and services, attracting new markets, and building climate resilience.
“Companies increasingly see tackling climate change as an investment in the future - and that's how governments need to start seeing their NDCs ahead of next year," said Sherry Madera, CEO of CDP. “This analysis shows there are trillions in opportunities across the global economy. Business now needs governments to lay out plans with sufficient detail for the market to act, realise these gains and kickstart green growth. With the focus of COP29 negotiations on finance, we believe the only route to success is seeing ambitious business practice and the 1.5C goal working hand in hand.”
But CDP’s analysis also reveals slow corporate progress to align core business activities with climate goals. Just 16% of companies generate the majority of their revenue from low-carbon products, while the average reported share of investment (CapEx) spent to deliver corporate climate transition plans stood at just 25%.
The data shows that companies are struggling to realise optimistic opportunity expectations by adapting their product and service portfolio – suggesting that stronger NDCs and policy frameworks are needed to help mobilize private capital.
Failure to do so raises the prospect of significant business risks. Among the global 500 companies, CDP data shows improved awareness of the financial impact of climate risks since 2018. The companies analysed identified over $1.3 trillion in climate-related risks – a 29% increase from 2018 – with regulation, market impacts and acute physical risks the top concerns.
Transparency into corporates’ climate progress and ambition is a critical input into the COP negotiations to help governments set and deliver targets that take a whole-of-economy approach. In a boost to the availability of standardized environmental data to guide governments, the number of companies reporting environmental data through CDP grew to over 24,800 companies (+7%) in 2024, including those representing over 66% of total global stock market value. The data disclosed through CDP's new questionnaire is aligned with IFRS S2, the ISSB's climate standard, as the foundational baseline for CDP's climate disclosure.
Over 12,500 companies reported through CDP’s new SME-specific questionnaire, while over 15,000 disclosed nature data.
“It is highly encouraging to see that more than 12,500 small and medium enterprises (SMEs) reported through CDP's new SME questionnaire in this first year”, said Nigar Arpadarai, UN Climate Change High-Level Champion. “Disclosure is a crucial first step to action and will be essential to future-proofing SMEs and supply chains across major and emerging markets. CDP has been a great partner in my campaign to empower thousands of small businesses to thrive in the green transition - helping SMEs to surface information that will make it easier to understand where to focus their attention, build capacity and act.”
"The partnership between the Ministry of Science, Technology, and Innovation of Brazil and CDP further enhances the relevance of using environmental data in government decision-making. The institutions already have a long-standing partnership in the sharing of data for the Organizational SIRENE tool, a public platform that receives voluntary reports of greenhouse gas emissions inventories from organizations. We are now in the final stages of expanding this partnership with a new umbrella agreement that will facilitate the sharing of extensive data with other ministries, feeding the DataClima+ system with information that will be used for monitoring Brazil's NDCs and for the development of reports such as the Biennial Transparency Reports (BTR)" said Márcio Rojas, General Coordinator of Climate Science, Ministry of Science, Technology and Innovation, Brazil
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About CDP
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 700 financial institutions with over $142 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. Over 24,800 companies around the world disclosed data through CDP in 2024, including listed companies worth over two thirds of global market capitalization. Aligned with the ISSB’s climate standard, IFRS S2, as its foundational baseline, 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.
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[1]The analysis is based on 316 companies from a global 500 sample of the world’s largest companies by market capitalization disclosing to CDP in 2018 and 344 companies disclosing to CDP in 2023.