Corporate Climate Actions: CDP Report Identifies Key Gaps
In 2025, CDP, in collaboration with Oliver Wyman and the World Economic Forum, released a report assessing corporate progress on sustainability. The findings show that while some businesses are making strides, significant gaps remain in integrating sustainability into business models and achieving climate goals.
To assess progress in integrating sustainability principles into business, CDP, in collaboration with Oliver Wyman and the World Economic Forum, conducted the Corporate Health Check research in 2025. This study evaluates companies' climate and nature-related activities using data from the publication "The State of Nature and Climate". The results show that, despite the progress made by some businesses, integrating sustainability into business models and achieving climate goals remain significant challenges.
Key Findings of the 2025 Report
The 2025 Corporate Health Check report sheds light on the gaps in corporate sustainability efforts. This overview delves into the report's key findings and offers insights for companies seeking to improve their sustainability performance.
A Lack of Ambition
Only 10% of companies are fully integrating Earth-positive decision-making across their operations, while the majority are falling behind both in terms of regulation and the planet’s needs. Around 17% of total market capitalization falls within the higher levels (3 and 4), indicating minimal progress in areas like climate and nature.
The 2025 CDP Corporate Health Check shows that nearly half (49%) of companies analysed are only meeting minimum requirements (Level 2), which includes basic emission disclosures, setting targets, and some integration of climate change into governance and strategy. However, significant progress is still needed for many companies to align with stricter regulations and expectations at Levels 3 and 4.
Source: CDP’s Report 2025 Corporate Health Check
The Corporate Health Check report categorizes companies into four levels:
- Level 1 (Falling Behind): No or limited disclosure of emissions, poor governance, and no integration of climate or nature into business strategy;
- Level 2 (Meeting the Minimum): Disclosure of Scope 1 and 2 emissions, some climate risk assessment, and basic progress on targets;
- Level 3 (Showing Ambition): Full value chain emissions disclosure, targets covering the value chain, stronger governance, and positive progress on both climate and nature targets;
- Level 4 (Charting Change): Comprehensive disclosure of Scope 1, 2, and 3 emissions, net-zero or SBTi-approved climate targets, integration of climate and nature into business strategies, and on-track progress.
Emissions Disclosure and Nature Targets
While there has been significant progress in emissions transparency, critical gaps remain. For example, 79% of companies disclose Scope 3 emissions (from their value chain), but 45% still fail to report on their most significant Scope 3 categories. Similarly, disclosures on nature-related issues, such as water and forests, are lagging, despite being material concerns for many industries.
Source: CDP’s Report 2025 Corporate Health Check
Moving from Transparency to Action
The gap between transparency and action remains wide. Only 35% of companies are on track to meet their emissions reduction targets. Regionally, Europe leads with 46%, while other regions like North America and Asia show less progress. In terms of nature goals, only 22% of companies are making progress on water-related targets, and just 15% on forest targets.
Four Key Levers for Change
Frontrunners in the report — those advancing in Levels 3 and 4 — are using four key strategies to drive change:
- Creating a 1.5°C-aligned climate transition plan: 64% of frontrunners have established such plans, compared to only 36% of other companies;
- Implementing internal carbon pricing: 40% of frontrunners price carbon internally, compared to just 20% of others;
- Linking executive pay to environmental targets: 80% of frontrunners align management incentives with climate action, versus 48% of other companies;
- Engaging across the value chain: 87% of frontrunners engage their suppliers and customers on emission reductions and nature-related issues, far surpassing the 62% of others.
Profit and Sustainability
The relationship between sustainability and financial performance is more nuanced than often perceived. Companies that are on track with emissions reduction targets saw similar market capitalisation growth to those not meeting their targets. In some sectors, such as transportation and apparel, sustainability-focused companies even outperformed their peers in terms of market growth. However, companies in high-emission sectors like energy and materials have lagged behind, as fossil fuels remain a more attractive investment due to current market conditions.
Conclusions from the Report
The CDP Corporate Health Check shows that sustainability efforts don’t necessarily come at the cost of financial performance. Companies leading the charge on climate and nature are driving change, but many more must follow suit. Policymakers must also provide support to accelerate the transition.
As the report highlights, the alignment of climate and nature goals with business strategies is crucial. Leaders in sustainability, who integrate environmental considerations into governance and strategy, can foster long-term success—both for the planet and for their bottom lines.
Source: CDP’s Report 2025 Corporate Health Check
Strategic Approaches for Achieving Sustainability Goals
To achieve real progress, businesses must set clear, science-based targets for reducing their impact on climate and nature, in line with international standards. Sustainability must be integrated across all levels of corporate governance, from the board of directors to daily operations.
Additionally, organisations need to develop financial incentives, such as linking executive compensation to sustainability goals, and strengthen collaboration with government and non-governmental bodies to create a supportive regulatory environment. Increasing transparency, standardising disclosures, and implementing tools to measure and monitor progress are also crucial steps. These actions will enable enterprises to meet current expectations and position themselves as leaders in sustainability, boosting their competitiveness and maintaining stakeholder trust.
