Some of Europe’s leading companies gathered in Paris to mark CDP’s 25th anniversary, showing how sustainability disclosure is not just good for the planet - it can also boost the bottom line.
It’s probably fair to say the mood around climate action and nature loss feels a bit mixed right now, especially given the turbulent geopolitical and economic backdrop.
But at a recent gathering in Paris - one that marked the 25th anniversary of CDP, the world’s largest environmental disclosure platform - some of Europe’s biggest businesses presented a much more positive picture: one that shows European companies choosing to lead on sustainability and environmental transparency are making significant financial gains.
Turning transparency into opportunity
More than 22,000 companies - and over 1,000 cities globally - now report their environmental impact data through CDP, an NGO set up to fill the climate and nature data gap. According to its latest research, published in the annual Corporate Health Check, companies turning environmental ambition into action are gaining a real competitive advantage.
Leaders - the businesses that achieved the global non-profit’s highest score - cut emissions in the past 12 months 60% faster than their peers, a shift that helped unlock €67 billion in financial opportunities.
Esther Finidori, Chief Sustainability Officer at Schneider Electric, says the firm’s sustainability strategy and disclosure to CDP have helped to transform the business.
“Reporting disclosure frameworks like CDP are, in fact, immensely valuable to business. It helps you assess where you stand. Each year, new questions help us push our ambitions further, challenge us, and help us improve.”
Sentiments echoed by Krishna Manda from Lenzing Group, who points out that better disclosure attracts more customers, investors and helps open up new markets.
“Why do companies disclose?” CDP’s CEO Sherry Madera asks, adding: “The reason why companies disclose is not because they would like to have data, it's because they need to use that data in order to be able to convince their customers that they are the companies to work with, to keep them in their investable universe. So this is not a burden. This is a benefit, and it's absolutely core to doing business.”
Europe takes top spot
CDP’s latest Corporate Health Check puts Europe in top spot globally. 16% of companies reached Leadership level in climate, just in front of businesses in the Asia-Pacific region at 15%, and well ahead of Latin America and North America at 6% and 5% respectively.
“In Europe, we’re seeing more and more pension funds becoming increasingly demanding. They challenge us to become more efficient in how we monitor companies and hold them to account on their climate strategies. And that is a positive development,” says Stéphane Cadieu, Chairman of the Management Board at Arkéa Asset Management.
Mind the gap
But CDP’s research also highlights a widening divergence in environmental performance across Europe.
Spain (25%) and France (24%) emerged with the highest share of companies at Leadership level in climate from countries assessed, followed by Ireland (22%), the United Kingdom (17%), Italy (17%), the Netherlands (17%) and Germany (10%)
CDP’s findings show that Europe’s leading businesses share several traits, including strong governance, credible transition planning aligned to 1.5ºC and the linking of executive pay directly to environmental outcomes.
“Climate change and nature loss are reshaping cost structures and supply chains across sectors. Companies that act early, invest in sustainable strategies and persist despite ambiguity will be those that define Europe’s next phase of economic resilience and growth,” explains Ariane Coulombe, CDP’s Market Director for EMEA.
Risk of inaction
Many of those gathered in Paris made it clear that they think climate change and nature loss are rapidly reshaping how businesses operate.
“Every business that exists has a dependency on nature in some form or another. They depend upon water, fresh air, clean air, healthy soil, solid ground,” says David Craig, Co-Chair of the Taskforce on Nature-related Financial Disclosures (TNFD).
For many firms, Craig argues, the sustainability journey often starts with a simple question: What are we actually dependent on?
Closer sustainability scrutiny also brings with it a sharper focus on any potential financial and operational risks to a business, insists Cadieu. That alone, he argues, is forcing many companies to reassess their strategies.
Rewarding Europe’s Leading businesses
More than a quarter of a century on, CDP continues to play a key role in driving progress towards a more sustainable future, and the 25-year milestone was also a chance to celebrate the continent’s most transparent businesses through its annual Europe Awards.
Summing up, CDP CEO Sherry Madera told Euronews, “If we think back 25 years, disclosure of climate data did not exist at all. So, for the last 25 years, CDP has been working with not only those that are in the environmental ecosystem, but those that are in the financial ecosystem, the economic ecosystem, and the policymaking ecosystem. I think we should be proud.”