According to the 2018 annual Carbon Disclosure Project (CDP) report released on 19 February, the majority of European firms recognise climate-related risks but over half do not have greenhouse gas reduction targets. Moreover, 80 per cent of European companies business view risks associated with adapting to climate change. But nearly 90 per cent expect climate change to result in new business opportunities, such as more demand for lower carbon goods.
The CDP is a UK-based non-profit organisation with the aim of making environmental reporting and risk management a norm in business and to drive disclosure, insight, and action towards a sustainable economy. Every year, the CDP analyses climate-related data publicly released by thousands of corporate businesses, including greenhouse gas emissions, water management, and climate change strategies, and the results are published in an annual report.
This year, the carbon emissions of 849 European companies in 23 countries were disclosed and amounted to combined emissions of around 2.3 billion tonnes of CO2. While 58 per cent of surveyed firms cut carbon in 2018, 53 per cent admitted they do not yet have climate goals for their total emissions despite the growing momentum and increasing pressure from investors. In fact, only one-third of surveyed companies have climate goals that go beyond 2025, according to the recent report. Nonetheless, carbon cuts by European companies have resulted in a total reduction of 85 million tonnes of CO2 ― the equivalent of Austria’s annual emissions.
This year’s report also suggests that, to date, corporate action has been focused on the boardroom, with 47 per cent of the companies offering monetary incentives to C-suite or board members associated with improved climate strategies, and one in four have financially incentivised meeting climate targets.
Last month, the CDP also released its yearly environmental “A-list” ― a list of the world’s businesses leading on environmental performance. For example, A-listed property management firm, Landsec, headquartered in London, has cut greenhouse gases by 17 per cent since 2014 and are seeking a 40 per cent reduction by 2030. Furthermore, half of the A-list is now made up of European firms.
Some campaigners object to the inclusion of fossil fuel companies like Naturgy Energy Group SA and Neste Oyj, or chemical firms, such as Bayer AG. A spokesman from Corporate Europe Observatory, a non-profit research and campaign group based in Brussels, stated, “If these companies represent the crème de la crème of environmentally-friendly big businesses, then we really are in trouble. They shouldn’t be celebrated, they should be kept as far away from our policy-makers as possible.”
Nevertheless, this year’s results highlight Europe’s leading position in green ― climate-conscious ― business. Furthermore, according to CDP Managing Director for Europe, Steven Tebbe, companies that are prioritising climate action outperform in the wider market. However, he also suggests that despite increased commitments by businesses, strong environmental policies, and increased citizen support, “progress is still not happening quickly enough.”