29 June 2022 (London): Responding to the final communique of the 2022 G7 meeting, Pietro Bertazzi, CDP's Global Director for Policy Engagement and External Affairs said: "The G7’s commitment to achieve a fully or predominantly decarbonized power sector by 2035 is an extremely welcome outcome from this year’s summit. The green energy transition is the most effective strategic response to the energy crisis. It can put the world on the path to a sustainable economy and inclusive growth.
However, a renewed focus on investment in natural gas raises questions about the integrity of G7 commitments. This is sure to encourage financial flows towards investments that are far from aligned with the Paris Agreement goal of limiting warming to 1.5°C. This will put the G7 governments’ ability to meet their own ambitious emission reduction targets at risk.
To translate their commitments into measurable action, the G7 must drive and support companies and cities to urgently set and implement emissions reduction targets in line with science. So, CDP welcomes the G7’s renewed support for mandatory climate-related financial disclosure. Regulation on disclosure can help to drive the sustainability transformation of capital markets and economies, create a level playing field for companies and, critically, allow for better tracking of companies’ and countries’ progress towards net-zero commitments.
Consistent communication of how sustainability matters affect drivers of enterprise value can be a complementary enabler of change, since it creates a financial incentive for companies and their investors to improve performance on some sustainability matters as much and as quickly as they can. However, there must be complementary disclosure to include impact on people and planet and allow capital allocation towards the ambitious environmental agenda as per the Paris Agreement, the 2030 Sustainable Development Agenda and the upcoming Global Biodiversity Framework. CDP will continue to play a critical role in enabling companies to disclose this information.
With a mission to drive transparency and action to tackle the environmental crisis, CDP has always been supportive of mandatory disclosure and the development of high-quality reporting standards to drive compliance and support companies in their reporting needs. 2021 marked a turning point in the development of global reporting standards. G7 support for the ISSB standards on sustainability-related financial disclosure as a global baseline for sustainability reporting is particularly welcome, yet the achievement of the global environmental and sustainable development agendas cannot be achieved without disclosure on impact on people and planet. CDP has supported the development of both a global baseline for comparable global reporting through the International Sustainability Standards Board (ISSB) and those developed by the Global Reporting Initiative (GRI),the Task Force on Nature-Related Financial Disclosures (TNFD), as well as the robust standards in development in jurisdictions including the EU.
It is positive to hear the G7 intends to work with other heavy emitting economies as part of its newly announced ‘Climate Club’. Intended to incentivise ‘more ambition to achieve our climate goals’, it will be critical that this new group actually drives action, alongside raising ambition.
The G7 should leverage the potential impact that high-emitting companies can achieve and which is immense. A group of under 200 of the highest-impact publicly listed companies may account for as much as 80% of industrial emissions. If we are seriously taking action to achieve the Paris Agreement goals, these organizations must decarbonize at the rate climate science demands. Among the group of 166 high-impact companies we analyzed, around 27 gigatons of greenhouse gas equivalent CO2 are in these companies’ value chains. That’s equivalent to around 70% of current global industrial emissions.”
For more information or for media enquiries, please contact:
Eilis O'Connell, Communications Manager: [email protected]
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 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. Over 14,000 organizations around the world disclosed data through CDP in 2021, including more than 13,000 companies worth over 64% 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.