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2020’s A List

Companies worth $15 trillion revealed on CDP 2020 ‘A List’ of environmental leaders
Katie Hill - Editor-in-Chief, My Green Pod
2020's A List

Over 300 companies including AstraZeneca, Danone, Firmenich, HP Inc, KAO Corporation, Klabin S/A, Mars, Symrise AG and Mitsubishi Electric have got a place on this year’s A List by environmental non-profit CDP.

This is a major increase on last year, despite the unprecedented challenges posed by Covid-19.

The A List showcases the companies leading on environmental transparency and action, based on their annual disclosure through CDP’s climate change, forests and water security questionnaires.

Thousands of companies disclose through CDP at the request of investors and corporate buyers.

Choosing transparency

This year has seen a major increase (45% up on last year) in the number of companies achieving an A score, with increases across all three themes that CDP assesses.

Along with the high levels of disclosure, this shows growing environmental awareness among the business world in 2020.

For climate scores this is largely because more companies are choosing to be transparent by disclosing data – in itself an important step, driven by increased market pressure for transparency.

The growth in companies scoring an A for tackling deforestation and water security points to increased action in these areas, as the higher levels of disclosure do not fully account for the increase.

Forests is particularly notable as the number of companies on the A List doubled from a low base (16 compared with 8 last year).

Paris turns five

The A List comes just ahead of the five-year anniversary of the Paris Agreement, with world governments expected to deliver updates on their national climate plans to build momentum ahead of COP26.

In November, the UK Government was the first G20 government to announce mandatory disclosure, sending a signal to the market and other governments that they should follow the UK’s approach.

The number of companies achieving a triple A across climate, forests and water, the highest rating CDP provides, has also grown to 10, up from six (the previous record) last year. Symrise AG, Mondi Plc, Fuji Oil Holdings and KAO Corporation are among the new triple A Listers.

‘This week marks exactly five years since global leaders shook hands on the Paris Agreement. It’s encouraging that 70% more companies are now reporting on their environmental action than in 2015, and that, this year, over 300 have reached the A List.

‘Congratulations to these leaders – through their action and transparency they are getting ahead of the pack and will seize the benefits as we transition to a net-zero sustainable economy. CDP data shows growing environmental awareness among the business world in 2020, which is hugely positive considering the unprecedented challenges business and society have faced this year.

‘We have the wind in our sails. Now, we need these pioneers to inspire the sluggish majority of corporates if the private sector is to take a leadership role when climate targets ratchet up at COP26 next year. The race is on.’

Global Director of Corporations & Supply Chains at CDP

The A List companies hail from around the globe, with most coming from Europe (132), Asia (100) and North America (61).

The top countries for A List headquarters are Japan (66), US (58), UK (21), Germany (19) and France (18). Last year Japan overtook the US and Asia overtook North America for the first time, with this solidifying further this year.

A-lister actions

Below are some examples of environmental action from the A List companies.

Japanese auto manufacturer Toyota has achieved 100% renewable electricity at all its European production plants and four South American plants.

Indian technology company Tech Mahindra has installed rainwater harvesting systems to decrease dependency on sources of water that are threatened by overuse.

American food producer Mars has simplified its palm oil supply chain, reducing the number of mills used overall has improved accountability and allowed for satellite tracking to monitor land use for deforestation.

American apparel company Levi Strauss & Co. is working with designated suppliers to identify and implement renewable energy and water saving interventions across 10 countries.

Global computer giant HP Inc has increased the percentage of its branded paper that is FSC-certified from 3% in 2009 to 100% now and can track product origin to individual mills.

Japanese company KAO Corporation, which produces consumer goods and chemicals, has introduced internal carbon pricing to promote energy-saving investment.

German flavours and fragrances company Symrise AG sources 100% RSPO-certified palm oil and offers training and financial incentives to its suppliers.

Failure to disclose

Around half of the A List (over 150 companies) are either new or returning, demonstrating that concrete environmental action continues apace this year despite 2020’s economic challenges.

While there has been a big increase in the A List this year, it still only represents a minority of companies.

Most (74%) of companies scored by CDP achieved D-C scores, meaning they are only just starting their environmental journey and becoming aware of how environmental issues impact their business.

Even more concerning, 3,700+ companies failed to disclose any data when requested by investors or customers, and over three times this many received an F for at least one theme.

These companies are expected to face increasing pressure to demonstrate they are taking environmental risks seriously.

Disclosure and investment

The market demand for corporate environmental transparency is louder than ever: 515 investors with $106 trillion in assets, and 150+ large purchasers with $4 trillion in buying power, requested thousands of companies to disclose through CDP in 2020. They use CDP data, including scores, to inform their investment and procurement strategies.

Leading environmental action is correlated with financial success. The A List companies have a combined worth of almost $15 trillion in market cap. Further, data from STOXX has shown that the A List has outperformed its reference index by an average of 5.3% per annum over a seven-year period.

The companies are scored based on CDP’s transparent scoring methodology covering: comprehensive disclosure of environmental impacts, risks, opportunities, governance and actions; awareness of environmental risks and how they relate to their business; demonstrating management of these environmental risks and evidence of best practice associated with environmental leadership.

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