Report reveals that companies could potentially multiply their earnings by seven through climate action, as per the latest CDP findings.
In a groundbreaking report titled "The 2025 Disclosure Dividend," CDP has highlighted the significant potential of companies in Japan and Canada in capitalising on environmental opportunities. The report reveals that these countries' firms have the highest median gains compared to their counterparts in the United States and China.
The superior performance of Japanese and Canadian companies can be attributed to their effective integration of environmental strategies into core business planning. This approach allows them to reap higher financial returns from climate action and risk mitigation investments. For every dollar invested in tackling physical climate risks, firms globally see an average return of 7:1, with some reaching returns as high as 21:1. However, Japanese and Canadian companies are positioned at the forefront of capturing these benefits.
Key factors contributing to this success include strong disclosure practices, strategic adoption of climate transition plans, and sectoral presence in industries that can address significant physical and transition climate risks, thereby turning them into growth opportunities.
The report underscores the importance of disclosure in the face of climate-related disasters. It suggests that companies measuring and managing environmental impacts can future-proof their operations and gain financial and strategic benefits. Notably, the disclosure of climate transition plans has increased nearly 50%.
However, the report also indicates significant room for growth and action in the adoption of climate transition plans. CDP's analysis of nearly 25,000 corporate disclosures in 2024 reveals that while 90% of large companies disclosing to CDP have or plan to adopt environmental risk assessment processes, only 43% currently have a climate transition plan in place.
The cost of inaction on climate change is projected to reach $38 trillion annually by 2050. As such, the report underscores the business imperative of disclosure and the measurable upside it presents.
[1] CDP. (2025). The 2025 Disclosure Dividend. Retrieved from https://www.cdp.net/en/reports/2025-disclosure-dividend [3] CDP. (2025). The 2025 Disclosure Dividend: Press Release. Retrieved from https://www.cdp.net/en/news/press-releases/2025-disclosure-dividend-report-reveals-companies-japan-and-canada-lead-in-realizing-environmental-opportunity-values
- By integrating environmental strategies into their core business planning, companies in Japan and Canada are not just future-proofing their operations but are also capitalizing on the financial benefits of climate action and risk mitigation investments, as highlighted in the CDP's "The 2025 Disclosure Dividend" report.
- The impressive performance of Japanese and Canadian companies in addressing climate change, as pointed out in the CDP report, is largely due to their strong disclosure practices, strategic adoption of climate transition plans, and sectoral presence in industries that can turn significant physical and transition climate risks into growth opportunities.
