CDP Report Finds Environmental Disclosure Delivers Measurable Financial Returns

CDP's 2025 Disclosure Dividend report, drawing on data from over 24,800 disclosing organisations, finds that ignoring environmental risks could cost the global economy up to US$38 trillion by 2050. Companies that act on environmental disclosure data consistently unlock access to capital, build business resilience, and gain competitive advantage in an accelerating regulatory landscape.

The Disclosure Dividend 2025 report analyses data from companies covering two-thirds of global market capitalisation and finds that environmental risk is rapidly becoming financial risk. The EU's agriculture sector alone already loses €28 billion annually due to extreme weather, while US insurance premiums have doubled since 2017 driven by climate disaster spending. Over 90% of large corporates already have — or intend within two years to implement — a process for identifying environmental risks. Companies identifying risks with substantive financial effects face exposures ranging from policy shifts to physical climate impacts including flooding, drought, and wildfires.

Despite growing awareness, corporate action remains insufficient relative to the scale of exposure. More than half of companies do not offer low-carbon or low-water impact goods and services, and only 11% offer suppliers financial incentives to improve environmental performance. Yet research shows suppliers offered financial incentives are 52% more likely to cut emissions compared to those receiving only training. Across markets, companies in Japan identified US$73 million per company in environmental opportunities, versus US$9.8 million for Chinese counterparts, reflecting stark differences in how businesses value the disclosure dividend across geographies.

CDP identifies five priority recommendations for companies seeking to unlock the disclosure dividend: establishing value chain environmental management processes, quantifying financial risk and opportunity, engaging suppliers, developing transition-aligned strategies, and creating green products and initiatives. Companies disclosing through CDP have already identified over US$16 trillion in climate and nature-related opportunities. As mandatory disclosure frameworks expand across jurisdictions including India, where SEBI's Business Responsibility and Sustainability Report requirements continue to evolve, the business case for disclosure-led strategy is increasingly difficult to ignore.

Key figure — US$38 trillion potential economic cost of ignoring environmental risks by 2050