Risk to opportunity: the business case for climate action

For your business to thrive, your strategy needs to include sustainability.

Paul Simpson, CEO, CDP

When CDP first started asking companies to disclose their environmental impacts, we had just 35 visionary investors signing our request and 245 businesses responded. Today, 800 investors with over US$100tn in assets back our annual disclosure request, and some 6,000 corporates – representing 60% of global market value – are responding.

This is because climate change, water stress and deforestation are fast becoming a central concern for business leaders. The threat is very real: droughts, floods, storms and land degradation are disrupting global supply chains and pushing up the cost of production. New regulations and a price on carbon are coming too, as well as market disruption from renewable energy, electric vehicles and other green technologies. The pressure is building on companies to act, with investors and customers increasingly demanding that businesses operate sustainably and transparently.

As well as risk management, there’s considerable business opportunities to be seized from environmental action. Whether it’s new products and services to capitalise on the multi-trillion-dollar new green economy, or saving money through energy and water efficiency. Last year, companies disclosing to CDP reported cost savings of over US$12bn, while reducing emissions equivalent to France’s annual carbon footprint.

More and more companies are taking action to grasp these opportunities and manage the risks. For example, nearly 300 major corporations, including Coca Cola, Kellogg’s and Sony, are committing to cut their emissions in line with the latest climate science. Meanwhile, 100 companies have committed to 100% renewable power, including Apple, Google and Starbucks. While cutting carbon, they are saving money on energy too, boosting profitability. Companies are also shining the light of transparency onto their supply chains, with 100 large multinational buyers requesting environmental information from their suppliers through CDP.

We are approaching a tipping point in mainstreaming environmental action, and to get there we need strong leadership and innovation from business. Disclosure of environmental risk is the critical first step for insights and meaningful action. Equipped with data and insights, companies can make the right decisions for a truly sustainable economy. Our vision – that of a thriving economy that works for people and planet in the long term – is well within reach.

Disclosure. Insight. Action. Start the journey at cdp.net


Get our latest features in your inbox

Join our community of business leaders