The annual reveal of Carbon Disclosure Project (CDP) scores is always a highly anticipated and interesting event.
Most know that the non-profit organisation has been working to accelerate the rate of change in transparency and best practice on climate action for decades. Today, CDP remains the world’s only standardised mechanism for reporting on the environmental impacts of capital markets, companies, cities and governments. As such, it’s the best benchmark that we all have to understand not just the performance of, but equally importantly the attitudes towards, economic forces towards the environment.
In the 2022 CDP disclosure cycle, more companies than ever reported on their climate, forestry and water impacts. That’s over 18,700 companies across 13 industries in 135 countries, with particular growth in engagement across the Asia Pacific region.
So how did they fare?
295 of these made the Climate Change A-List (a heartening 34% increase year on year), but progress remains achingly slow on the two other measures of deforestation and water security. Compared to 2021, only one more company made the Forests A-List and on water security the news is even worse: the number of Water A-Listers actually decreased from 118 to 103. Just 12 companies (1.3%) disclosing against all three questionnaires were awarded a Triple A in 2022.
Sadly, just 135 British companies disclosed on water in this cycle. This could indicate that either they don’t regard water as important (supported by Ofwat’s findings that only 7% of business customers regard water efficiency as a priority), or that they don’t feel sufficiently confident in their water data to disclose on it.
If it’s the latter, there’s really no need for this since, in theory, water market deregulation enabled all companies in England and Wales to access all the data they need to be transparent about their water impacts and work to reduce them. In practice, we know that this isn’t generally the outcome because most retailers aren’t providing sufficient data to give customers actionable insight and direction. However, in a customer-led market, companies should vote with their feet if they’re not getting the data they need to disclose their water impacts and make good decisions around reducing risks and boosting resilience across their business.
As the sustainability conversation moves on from Net Zero toward Nature Positive, all corporates must now recognise the interconnectivity of all environmental issues and consider how to take a holistic approach to tackling them, as Dexter Galvin, Global Director of Corporations & Supply Chains at CDP, explains.
Most are still not managing all environmental issues holistically, and far too many are remaining complacent or failing to respond at all. Companies must step up to the challenge as CDP continues to lift the bar for what qualifies as environmental leadership, and since there is no route to 1.5°C without nature, they must speed and scale up their progress in addressing deforestation and water impacts, dependencies and risks, too.
Dexter Galvin, Global Director of Corporations & Supply Chains at CDP
Accordingly, CDP is moving to expand its scope to cover more aspects of environmental performance and stakeholders to cover climate, land, resilience, biodiversity, waste, oceans, freshwater, forests and food.
Should inspiration be needed, the CDP team called out some major manufacturing companies like Honda, Levi Strauss, and Samsung that all disclosed on water for the first time in this cycle. It also applauded brewery Asahi and beauty company L’Oréal for their actions on water stewardship in its 2022 Stories of Change publication.
Companies that are not already firmly on the path to meaningful disclosure on water as well as carbon should make 2023 the turning point.
As CDP’s only UK water specialist partner, Waterscan is already working to maximise opportunities for customers to reduce water consumption and get data-ready for the next reporting cycle, and is ready to help others that want to dive in but don’t know where to start.
