According to non-profit data tracker CDP, the number of firms claiming to have a climate transition plan in line with the world’s most ambitious target has increased by over half. However, many of these companies do not provide investors with adequate information to verify the claims.

5,906 firms, or one in four, that submitted data to the only independent environmental disclosure platform in the world stated they had a strategy in place to keep global warming to 1.5 degrees Celsius over the pre-industrial average.

Although the UN stated in December that the globe was now on course to record a temperature increase of 2.9 degrees Celsius, doing so is essential to averting the worst effects of climate change.

While reporting by corporations is becoming more and more required by regulators in the US, the EU, and other regions, it is still optional in many others, and some boards are taking action ahead of legislative changes.

In order to facilitate investor monitoring of plan quality, CDP has identified 21 indicators that companies should strive to furnish. These indicators include emissions data from all points of the company’s supply chain, lucidity on any guarantees given, and the extent of board oversight.

Only 1% of the organisations, or about 140, provided information on all the indicators. Of the enterprises claiming to have a 1.5 degrees Celsius-aligned transition plan, 39% provided information on at least two-thirds of the CDP goal KPIs.

“With nearly 50% more companies reporting climate transition plans through CDP in 2023, it’s evident that data on forward-looking commitments are becoming crucial tools for companies to build and maintain confidence with market stakeholders,” said CDP Chief Executive Sherry Madera in a statement.

“This momentum is unmistakable, with a further 8,000 businesses looking to have their transition plans in place by 2025. This is encouraging and a smart business move, as climate transition plans are an essential tool needed for credible businesses as they shift to net-zero.”

(Adapted from ESGNews.com)