Water security is rising up the corporate environmental reporting agenda, according to the CDP A list 2021 published today.

A record 13,000+ companies reported environmental data through CDP in 2021 - 14 pioneering companies were awarded Triple A scores for their work across climate change, forests and water security.

However, nearly 17,000 companies worth US$21 trillion are still failing to disclose, CDP said..

272 companies worldwide - worth US$12 trillion in market cap - have today been highlighted for their environmental leadership, based on their level of transparency and performance on climate change, forests and water security.

The leading companies have been named on CDP’s prestigious annual A List, and are among nearly 12,000 ranked A to D- on their environmental performance by CDP – the non-profit that runs the world’s environmental disclosure system for companies, cities, states and regions.

Nature had a clear seat at the table at this year’s COP26 summit, and the Glasgow Pact as well as the IPCC’s Sixth Assessment Report made it clear that environmental issues are interconnected and must be managed together.

According to CDP, companies gradually seem to be recognizing this and adopting a more holistic approach to reporting. 14 pioneering companies - including L'Oréal, Unilever, HP and Lenzing AG - achieved a triple A for their performance on all three environmental themes in 2021, an increase on last year’s record of 10.

Water and forests are now rising up the corporate agenda, as more companies than ever taking leading action. The number of companies on CDP’s Water A List grew from 106 to 118 while the Forests A List rose from 16 to 24.

However, the number of companies on the Climate A List has dropped from 280 last year to 200 in 2021, as the consensus on what qualifies as climate leadership has evolved and the bar raised.

CDP said that “much of the low hanging fruit” at companies’ disposal has now been utilised and more ambitious action is urgently required. Among other criteria, to score an A, companies must have robust governance and oversight of climate issues, rigorous risk management processes, verified scope 1 and 2 emissions and be reducing emissions across their value chain. Most also now have well established emissions targets that have been approved by the Science Based Targets initiative, and evidence of targets which cover their scope 3 emissions.

Many other companies nonetheless made a significant improvement in the quality of their disclosures this year and moved up in the rankings - 509 companies improved their scores from a C or below in 2020 to a B in 2021, meaning they have advanced from merely disclosing and being aware of their environmental impact, to taking action to manage it.

Commenting on the annual scores, CDP sid:

“While it is positive to see the leadership of some pioneering companies, and the efforts of others to improve, these companies represent only the tip of the iceberg. Just 2% of all scored companies made the A List, and 58% scored between C and D-, meaning they are only just beginning to recognize their environmental impact.

“It is also concerning that 16,870 companies worth US$21 trillion in market cap – including Chevron, Exxon Mobil, Glencore and Berkshire Hathaway – failed to respond to the request for information from their investors and clients, or provide sufficient information in their response.”

According to CDP, non-disclosing companies are now “going against a tide of change”, with a series of environmental disclosure requirements being developed and announced at COP26 and throughout 2021, as well as more companies than ever disclosing environmental information every year.

CDP recorded over 13,000 corporate disclosures, representing some 64% of global market capitalization in 2021 – an all-time record. In addition, there is rising market demand for corporate environmental transparency. More than 590 investors with over US$110 trillion in assets and 200 major buyers with US$5.5 trillion in procurement spend requested corporate environmental data through CDP in 2021.

Dexter Galvin, Global Director of Corporations & Supply Chains at CDP, said:

“COP26 highlighted the necessary role corporates play in driving the real economy changes to tackle the climate and ecological emergency, and keep us within 1.5°C. It is fantastic that more businesses are disclosing their impact every year and recognizing the interconnectedness of environmental issues. We now need to see even more ambitious action on climate, and more businesses stepping up on other areas of natural capital. 17,000 corporates failing to even take the first step and report their environmental data is far too many. These companies are not only putting the planet at risk, but themselves. If they continue with business as usual, they will end up on the wrong side of public opinion, regulation and investor sentiment. And scrutiny is rising - empty targets or greenwash simply won’t fly.”

CDP scores companies based on a transparent methodology covering disclosure, awareness, management and leadership.

Between now and 2025, to support the need to reach net-zero emissions and full nature recovery by 2050, CDP will develop its scoring methods to focus even more on tracking against scientific benchmarks and pathways reflecting companies’ historic, current and projected impacts; product portfolios; and investment and transition plans.

The scores will provide a clear assessment of a company’s ambition and how they are performing against targets, driving greater credibility and accountability.

As part of its new five-year strategy, and to help tackle the climate and ecological emergency, CDP will also be expanding its work to cover more environmental issues. This will include land, oceans, biodiversity, resilience, waste and food.

Click here to access the CDP A list annual company scores 2021