Tuesday, 01 February 2022
Author: Selma P. Utonih
According to recent data from the CDP, 2021 was a record-breaking year with over 13,000 companies having disclosed through the CDP representing over 64% of the global market and having increased by 35% when compared to the previous year. Meanwhile, the RE100 also experienced significant growth with a 65% increase in memberships with 28% of corporations sourcing their renewable energy through Power Purchase Agreements (PPAs).
Against the backdrop of the COP26 outcomes and the IPCC's Sixth Assessment Report, there continues to be an urgent need to increase global efforts in addressing environmental issues. As such over the past years corporations have increasingly focused on supporting the energy transition and creating credible transition plans towards net-zero emissions.
Disclosure of a company's operations and impacts is the first step towards action and has become increasingly important to investors and policymakers with the CDP becoming the gold standard for corporate environmental reporting.
There has been significant growth in corporate disclosure through the CDP with member companies increasing by 35% in 2021 compared to the previous year and representing over 64% of the global market capitalization.
Since 2015 when the Paris Agreement was signed there has been a 141% growth in companies joining the CDP showing a clear increase in demand from corporations to measure their environmental performance, set and work to meet their sustainability targets, then witness how they perform amongst their peers.
In addition to providing a corporate disclosure platform, the CDP also has a well-known rating mechanism that annually tracks the environmental performance and progress of member corporations towards sustainability.
According to the CDP's A-List for 2021, over 270 corporations are leading the way towards net-zero emissions. The CDP's scoring system measures the comprehensiveness of disclosure, awareness, and management of environmental risks and best practices associated with environmental leadership such as setting ambitious targets. Companies that make it on this list have robust sustainability programs in place.
The CDP's scoring system is divided into three sectors namely climate change, forestry, and water security. In 2021, of the 272 companies that made the list, a total of 342 A-list scores were awarded; 200 for climate change, 118 for water security, and 24 for forests. Of the listed corporations, the following 14 companies made the A-list across all three measured sectors:
| Triple-A scoring CDP companies |
| Danone |
| FIRMENICH SA |
| FUJI OIL HOLDINGS INC. |
| HP Inc |
| International Flavors & Fragrances Inc. |
| KAO Corporation |
| Klabin S/A |
| Lenzing AG |
| L'Oréal |
| Metsä Board Corporation |
| Mondi PLC |
| Philip Morris International |
| Symrise AG |
| Unilever plc |
In 2021 there were 104 European companies on the CDP's A Lists for climate change, forests, and water scarcity. Of those companies, a total of 134 A-list scores were awarded: 92 for climate change, 14 for forests, and 28 for water security.
European corporations made up a 40% share of the total global A-list, additionally, 8 out of the top 14 companies that received a triple-A score were based in Europe which according to the CDP reflects "Europe's leading position for the highest levels of transparency and action across the three key interrelated environmental themes."
Europe's top triple-A CDP scoring companies in 2021:
| Company | Country |
| Danone | France |
| Lenzing AG | Austria |
| Metsä Board Corporation | Finland |
| L'Oréal | France |
| Symrise AG | Germany |
| FIRMENICH SA | Switzerland |
| Mondi PLC | United Kingdom of Great Britain and Northern Ireland |
| Unilever plc | United Kingdom of Great Britain and Northern Ireland |
Within Europe, 25% (23 companies) of all A-List companies in Europe were French, with the UK (15) Germany (14) and Spain (11) following. Furthermore, 80% of all climate change A-List companies have an approved science-based target.
In 2021, Lenzing, Metsä Board Corporation, and Unilever joined Danone, FIRMENICH, L'Oréal, Mondi, Philip Morris International, and Symrise, who also achieved three A scores in 2020.
The RE-100 initiative also experienced significant historical growth in memberships last year with 86 companies joining the RE100 initiative in 2021 alone and having increased by 64% when compared to the year prior.
The RE100 initiative consists of global companies aiming for 100% renewable electricity consumption. As of January 2022, it consists of 349 companies with a collective revenue of more than $6.6 trillion, over 7% of global GDP, with operations in more than 120 markets. Together, RE100 members (315 companies) have a combined demand for renewable electricity of 340 TWh – more than the 326TWh used to power the whole of the UK last year.
In its most recent report, RE100 member demand for renewable electricity continues to grow with 45% of members reporting renewable electricity consumption up from 41% in 2020. Additionally, there has been a reported increase in members sourcing more of their RE electricity through PPAs standing at 28% in 2021 has increased by 2% compared to the year prior.
Purchases in Europe accounted for a 34% share of all purchased renewable electricity reported by members with green tariffs being the dominant sourcing method (54%) followed by unbundled EACs (33%).
There is a clear signal that demand for green electricity will be largely driven by corporations and as more companies band together to set their sustainability targets to reach net-zero, demand for emission reduction technologies will also rise.
A more in-depth breakdown of the RE100 results will be published during this week.
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