A recent report by CDP suggests that less than 1% of the 18,600 companies surveyed by CDP have credible climate change plans to net zero. This result is surprising because achieving net zero is critical to the planet’s well-being. Without getting into a methodological debate, here are some thoughts on why this would be so:
- Many companies that provide CDP/sustainability disclosures provide them simply because others are doing so. They do not want to be left behind the competitors.
- Providing such disclosures are short-term oriented and aim to gain brownie points from investors by improving their ESG ratings and scores.
- Customers, particularly in the B2B space, push for sustainable products and actions. This helps the customers improve their Scope 3 emissions performance. Many buyers have supplier policies that mandate sustainable actions by suppliers.
- Many a times, regulations require presenting of sustainability data. For instance, BRSR is a requirement, and required information needs to be provided. The intent is just to give enough information to keep the regulators and the investor community happy.
Building a sustainability strategy is hard and weaving it into the business strategy harder. However, if we need to achieve net zero targets, we need to take action now.
Utkarsh Majmudar 