CDP was chosen as the Charter’s platform to report the progress of signatory commitments. As measuring and disclosing is a critical initial step to drive an organization’s low-carbon transition, the CDP process helps Charter signatories track and benchmark their progress, while uncovering risks and opportunities in their climate change objectives. As this was the first year of reporting, signatories¹⁷ had the option to disclose their climate impact publicly or non-publicly. A performance review was then undertaken by UN Climate Change to assess current efforts under the Charter and evaluate progress towards alignment with a 1.5 °C temperature goal.

In response to company commitments to public disclosure, Charter companies can fill in the entire CDP questionnaire, while small and medium enterprises can choose to answer the minimum version of CDP questionnaire, if they are new to reporting. Charter's companies will need to include data on their scope 1, 2 and 3 greenhouse gas emission baseline years, their greenhouse gas reduction targets (including their Charter commitments) and progress made on greenhouse gas emission reductions, among others. Signatories were encouraged to share their data publicly from the first year of reporting in 2020, but this will become mandatory from 2021 when the Charter will share overall data and progress by signatories annually.

In 2020, 72 per cent of signatories answered the CDP questionnaire, which was above the CDP average coalition-based response rate. Nearly one third of these were reporting for the first time. Disclosures showed that progress is being made: nearly 60 per cent of respondents have decreased their overall greenhouse gas emissions since the past reporting year. Moreover, over 85 per cent of responding signatories have embedded the Charter’s climate commitments in their own organization’s public-facing sustainability strategy.

Key Questionnaire Insights

The CDP review showed that signatories utilize several strategies to meet their emission reduction aims. To begin with, 80 per cent of responding signatories listed an active emissions target, and one quarter of these indicated an approved science-based target. At the same time, signatories demonstrated that they are undertaking a considerable number of emission reduction initiatives, with the bulk of estimated annual carbon dioxide equivalent reductions reported in 2020 resulting from energy efficiency in buildings and low-carbon energy consumption. Additional initiatives focused on energy efficiency in production processes and waste reduction and material circularity. Taken together, these initiatives and efforts led to an estimated annual saving of 3,481,393 tonnes of carbon dioxide equivalent.

Projects to accelerate a low-carbon transition across signatories are varied. Several organizations are invested in procuring renewable power (e.g. wind and hydro), while investment in low-carbon energy generation largely involved installing solar photovoltaic panels in their buildings. In this context, 40 per cent of the total electricity purchased by responding signatories came from renewable sources. Most projects to boost energy efficiency entailed switching to light-emitting diode lights and changes to heating and cooling systems across stores and offices (energy efficiency in buildings), and wastewater treatment and waste heat recovery (energy efficiency in production processes).

Projects aimed at decreasing emissions from transport include switching to hybrid or electric vehicles and reassessing logistics to optimize the average transported volume per truck, for example. In the areas of waste reduction and material circularity, projects vary from encouraging consignment to avoid items being landfilled, establishing partnerships for the collection, reuse, and recycling of used clothes, installing purified water dispensers and providing reusable bottles for all employees, and implementing measures to decrease the use of plastic bags in stores. Finally, some projects are aimed at lowering emissions by switching to bio-based, recycled and/or innovative materials with lower climate impacts. In total, these initiatives and projects on emission reduction generate an estimated USD 117.14 million in annual savings for signatories.

Despite progress, the review also identified several important areas where signatories can improve their performance. One such area is renewable energy, as just 7 per cent of responding signatories’ total energy consumption was sourced from renewable energy, despite the vast cost-saving potential of sourcing higher levels. Furthermore, signatories can implement meaningful risk assessment and risk management procedures to address potential climate-related financial impacts (e.g. carbon pricing mechanisms and the increased severity and frequency of extreme weather events). While 51 per cent of signatories utilize climate risk assessment procedures, only 17 per cent reported to be leveraging the internal cost of carbon. Lastly, the review pointed to enabling and supporting the engagement of members’ own value chain as an opportunity that is yet to be fully tapped.

An additional key takeaway related to reporting quality and completeness. While 72 per cent of signatories responded, not all disclosures were complete or consistent across questions. This led to around 15 to 20 per cent of signatories leaving out meaningful targets and indicators for measurable progress. Moving forward, a more robust reporting is required. Charter will seek to build capacity and enable sharing of best practices to support this effort.

UN Climate Change will register and track public CDP reports of Charter's companies in the Global Climate Action Portal.