Beiersdorf, Firmenich, Kao, L’Oréal, LVMH secure ‘Triple A’ CDP 2022 rating
The sustainability ranking, run by non-profit organisation CDP, scored companies from A to D- based on disclosure, awareness and management of environmental risks and best practices associated with environmental leadership. The scoring was given across three categories using specialised methodologies – climate change, forests and water security.
An A or A- score represented leadership level; B or B- was considered management level; C or C- showed an awareness level; and D or D- was considered disclosure level. This year, close to 15,000 companies disclosed through CDP, with just 330+ making the global A list and only 12 companies awarded A scores across all three categories.
A spotlight on Europe's 'leading position'
Corporations in Europe represented 44% of the 330+ global A list, with eight out of the top 12 triple A status companies based in Europe. CDP said this reflected “Europe’s leading position for the highest levels of transparency and action across the three key interrelated environmental themes” – increasingly relevant after the EU Parliament’s adoption of the Corporate Sustainability Reporting Directive (CSRD) in November 2022, that came into force last week on January 5, 2023.
The European Commission (EC) would adopt the first CSRD standards mid-2023, with rules set to apply from January 2024, requiring all large companies in the EU (250-500+ employees), as well as listed SMEs, to disclose data, subject to independent auditing and certification, on the impact of their activities on people and the planet and any sustainability risks they were exposed to. Digital access to sustainability information also had to be guaranteed.
Maxfield Weiss, executive director of CDP Europe, said: “With the EU’s ground-breaking new reporting regulation, the CSRD, now agreed, CDP A List companies are showing they are ahead of the game – taking clear action to reduce emissions and to address environmental impacts throughout their value chains. This is the type of environmental transparency and action we need economy-wide to prevent ecological collapse.”
All European A-List companies would be recognised at the 2023 CDP Europe Awards in February this year, due to be held at the Fondation Louis Vuitton in Paris.
Beauty holds five out of 12 ‘Triple A’ spots
Out of the 12 companies with three ‘A’ scores in the 2022 ranking, five worked in the beauty and personal care industry – either manufacturing finished products or supplying fragrances, with four headquartered in Europe.
Personal care major Beiersdorf; fragrance major Firmenich; personal care giant Kao Corporation; international beauty major L’Oréal; and global luxury goods giant LVMH all secured A scores for sustainable efforts across climate change, forests and water security. And many more companies operating in beauty and personal care received one or two A scores across categories.
The other seven companies with triple A rankings for 2022 were food giant Danone; tech hardware company HP Inc; Brazilian paper manufacturer and recycling firm Klabin S.A; wood-based fibre supplier Lenzing AG; European paperboard supplier Metsä Board Corporation; cigarette company Philip Morris International; and Finnish paper mill and forest firm UPM-Kymmene Corporation.
Vincent Warnery, CEO of Beiersdorf, said: “We are very proud to be recognised on CDP’s Triple A List for 2022, an achievement that stands for our serious commitment to drive sustainability and lead by example. Beiersdorf has a deeply-rooted motivation to strive for environmental stewardship and help tackle three of the greatest challenges of our time, which are closely interlinked: climate change, deforestation and water security.”
Warnery said Beiersdorf hoped to inspire others in this endeavour, which started with environmental disclosure, required a true transformation, and ultimately relied on a collaborative effort.
Collaboration – manufacturers, suppliers and scientific partners
Antoine Arnault, director of image and environment at LVMH, agreed on the importance of collaboration. “LVMH would like to share this recognition with its suppliers and scientific partners. Measuring and communicating environmental impact across the LVMH value chain on climate, water and biodiversity – including forests – have proved to be powerful tools for fostering actions,” Arnault said.
And given the company’s “deep dependency” on biodiversity, he said LVMH was particularly committed to scaling up regenerative practices within its supply chain that bridged the perseveration of biodiversity and the fight against climate change.
Nicolas Hieronimus, CEO of L’Oréal, said his company also had big plans in place to continue environmental efforts, collaboratively. “We want to leverage our scale to become a catalyst of change and mobilise all parts of our ecosystem to address the pressing climate and environmental challenges we all face. By working together, we can create the beauty that moves the world,” Hieronimus said.
This year’s CDP ranking marked the seventh year in a row that L’Oréal had received a Triple A rating – the only company to do so and a “testimony of L’Oréal’s long-term commitment” to the planet, the CEO said.
Dave Muenz, director and managing executive officer in charge of Kao’s ESG division, said: “Being included in this selection reassures us that we are taking the right steps to realise a sustainable lifestyle for each and every consumer. We must all take certain and urgent action across society to tackle climate change.”
As the only fragrance supplier to achieve a Triple A CDP ranking, and 2022 marking the fifth consecutive year of such a ranking, Gilbert Ghostine, CEO of Firmenich, said it was testimony to the 11,000 colleagues who had strived to deliver ambitious Environmental, Social and Governance (ESG) targets for climate and nature.
“Sustainability and good business are synonymous: our journey demonstrates that businesses can drive urgently needed change for the planet and we are determined to keep on raising the bar,” Ghostine said.
CDP warning – just 1.3% of companies at ‘Triple A’ level
Whilst 2022 had seen plenty of progress, the CDP said the 330+ companies, collectively worth almost €10.2 trillion, and recognised as global leaders in environmental transparency and action with ‘Triple A’ scores, represented just 1.3% of the 900+ companies required to disclose against all three CDP areas.
Whilst 280+ companies scored an A for climate change disclosures, up 34% on last year despite more stringent requirements, progress remained slow on deforestation and water security, according to CDP.
Dexter Galvin, global director of corporations and supply chains at CDP, said: “In a year of ever-increasing environmental concerns around the world, the need for transformational, urgent and collaborative change is more critical than ever. Environmental disclosure is the first vital step towards a net-zero and nature-positive future, so A List companies should be commended for the level of transparency in their CDP responses.”
“But we cannot ignore that these companies are in the minority,” Galvin said. “Most are still not managing all environmental issues holistically, and far too many are remaining complacent or failing to respond at all. Companies must step up to the challenge as CDP continues to lift the bar for what qualifies as environmental leadership, and since there is no route to 1.5 °C without nature, they must speed and scale up their progress in addressing deforestation and water impacts, dependencies and risks, too,” he said.