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We Don't Have Time
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Read our new report on corporate climate transparency leadership
We Don’t Have Time, in partnership with Open Sustainability Index, an open-source, crowd-sourced corporate sustainability data platform, has released a special report, Nordic Climate Transparency Leadership, on CSRD readiness, focusing on climate reporting and science-based targets.
The Nordic Climate Transparency Leadership report surveys all companies on the Nasdaq OMX Nordic 120 list which includes the largest and most traded companies in the Nordics. It identifies a consistent correlation between the best performing companies in terms of total return on the stock market, and those with the most complete and transparent reporting of their scope 1-3 carbon emissions.
Over the past 12 months, an investment in the 32 companies that report completely and transparently, i.e. with the level of detail stipulated by the upcoming CSRD (ESRS E1) requirements, has yielded a 28% higher return compared to an investment in all companies on Nasdaq OMX Nordic 120.
Companies with complete and transparent carbon emission reporting had a higher representation among the top 10 stock market performers compared to the full index, and a lower representation among the bottom 10 performers, during time periods of 1, 3 and 5 years, the study finds.
“It’s important to note that this correlation does not necessarily imply causality. One possible explanation could be that stronger corporate governance and well-documented operations also are better-managed corporations in general” says Petter Palander, co-author of the Nordic Climate Transparency Leadership report.
Generally, companies on Nasdaq OMX Nordic 120 are well prepared for the upcoming CSRD requirements. One third of the companies are very well prepared for the legislation on this specific area of reporting; they report on their GHG emissions according to the upcoming requirements.
Complete and transparent reporting is a necessity to fully understand an organization’s impact along the value chain, as most of companies’ emissions can be found in their supply chain. About half (48.5%) of the companies do report on gross emissions in all scopes; Scope 1, Scope 2, Scope 3, but some (16%) has yet to report on Scope 3 disaggregated per Scope 3 category, and/or transparently disclose whether they report on all material Scope 3 categories.
The Nordic Climate Transparency Leadership report also covers NOMX120 companies climate targets, in relation to both CSRD requirements (ESRS E1), as well as in relation to the EU’s target of reducing GHG emissions by 55% by 2030 and the ambition of being a climate neutral continent by 2050.
As the private sector is a key part of reaching the overarching targets within the EU, it’s crucial to have corporations aligned. The majority (68%) of companies are committed to, and have set science-based targets. However, only half of the companies are committed to Net Zero through their value chain by 2050, and only 17% of the companies have set a Net Zero target year.
The Nordic Climate Transparency Leadership report identifies a significant gap in CSRD readiness within the Financial Services sector—an essential sector for the transitioning from fossil fuels and carbon-intensive assets to renewable and low-carbon investments. This gap in carbon accounting readiness is notably larger compared to the NOMX120 list as a whole.
The Nordic Climate Transparency Leadership report finds that only 4 out of 17 (24%) financial institutions have accounted for and reported on their Investments, a requirement of the upcoming directive – and only 2 of the 17 (12%) financial institutions have set science-based targets targets covering this key category and source of emissions.
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31 w
Thank you for the report. Indeed financial institutions the number should rise from 4 to the upper number or all of them be accountable to narrow the wide gap so far.