Corporate climate opportunities now worth US$16tn

Companies reporting through CDP now expect US$16 trillion of new gains from transitioning to a climate change-ready business model.

The climate disclosure organisation, through which 24,800 companies representing 66% of global market capitalisation now reports, says climate-related opportunities are now more recognised than ever in the corporate world – with each business identifying around US$3 billion of potential benefits on average.

Climate opportunity more than doubles

The opportunity is even greater for the largest 500 corporations, which expect a total of US$4.8 trillion in climate-related gains. Six years ago, in 2018, the same businesses estimated potential benefits from the climate transition at US$2.1 trillion – meaning the identified opportunity has grown by 127%.

“Companies increasingly see tackling climate change as an investment in the future – and that's how governments need to start seeing their NDCs ahead of next year," said Sherry Madera, CEO of CDP. 

Business climate transition remains slow

Despite these bullish expectations, companies are still slow to adjust to the climate transition, with just 16% generating most of their revenue from low-carbon products. Across the entire CDP network, the average share of CAPEX spent to deliver corporate climate transition plans stood at only 25% in 2023.

This contraction, according to CDP, suggests that companies need a stronger policy environment to support action – namely ambitious and “investible” government climate commitments or NDCs (nationally determined contributions).

The importance of ‘investible’ NDCs

Currently at COP29 in Azerbaijan, many countries are expected to announce their next rounds of NDCs, with a 2035 deadline: the UK yesterday published its new 81% GHG reduction goal, seen as “a shining example of climate leadership”.

Brazil also revealed its next climate target at the conference: a 59% to 67% reduction in carbon footprint by 2035, as compared to 2005 – a goal that the World Resources Institute believes “shows that it is ready to tackle the climate crisis head-on, as long as the country strives for the highest end of its emission reduction target”.

“This analysis shows there are trillions in opportunities across the global economy. Business now needs governments to lay out plans with sufficient detail for the market to act, realise these gains and kickstart green growth. With the focus of COP29 negotiations on finance, we believe the only route to success is seeing ambitious business practice and the 1.5C goal working hand in hand,” added Madera.