Transition Finance Data: Insights from CDP
In July, the Luxembourg Stock Exchange (LuxSE) announced the launch of a brand-new initiative which aims to support issuers in their transition journey and provide transparency to investors. The Transition Finance Gateway shines the spotlight on the exchange’s some 500+ non-financial corporate debt issuers across both conventional and sustainable bonds.
To mark the launch of our innovative Transition Finance Gateway, we sat down with Torun Reinhammar, Head of Capital Markets Europe at CDP - one of the four data providers helping to power the Gateway with market-renowned climate transition data.
An opportune moment came when the UK Prime Minister Tony Blair invited CDP co-founder Tessa Tennant to explain the plan at 10 Downing Street, helping to bridge the gap between the government and investor communities. And so, on 4 December 2000, what was then known as the Carbon Disclosure Project (CDP) was established.
A small CDP team persuaded 35 forward-looking investment firms holding the purse of USD 4 trillion in assets to become the founding signatories, influencing 245 initial companies to disclose their emissions.
Today, environmental disclosure is considered one of the most strategic weapons in the much-needed acceleration of capital flows and policy toward Earth-positive impact.
CDP is known globally as the independent driving force where enterprise, capital, policy and science meet, and continues to be a vanguard organization in the fight for the Earth’s ecosystems and the protection of future generations.
This includes governance indicators (such as board-level oversight and climate expertise), strategic planning, scenario analysis, financial planning details associated with a credible climate transition, value chain and policy engagement, climate-related risks and opportunities, emissions accounting, and climate and net-zero targets.
A credible climate transition plan is a critical environmental consideration, and it is increasingly essential for accessing capital, improving business efficiency, and meeting regulatory and market expectations.
CDP enables organisations to disclose in a standardised, comparable format—because a plan is only as strong as the data behind it, and data is most powerful when it’s consistent and transparent.
Organisations that disclose through CDP year after year tend to provide more comprehensive transition data. In fact, 41% of repeat CDP disclosers report against “some,” “many,” or “all” of the key transition plan indicators, compared to just 30% of first-time disclosers. Nearly all companies reporting against all 21 indicators are repeat disclosers.
Take CDP’s Net-Zero Alignment Dataset (NZAD) as an example. It helps identify companies with 1.5°C-aligned targets and transition plans, and engage those without. Using temperature alignment scores, emissions metrics, and transition plan data, NZAD enables financial institutions to assess the credibility of corporate climate commitments and track performance trends.
These insights allow investors to evaluate ambition in context, supporting capital allocation toward companies that are not only setting targets but also demonstrating the capacity to meet them.
That means that the transition to a sustainable economy is no longer optional; it’s a business imperative – and a fiduciary responsibility. Regulators and customers are looking for credible action that future-proofs the economy, and the first step is understanding and disclosing environmental impact. For financial institutions, integrating environmental considerations into investment and lending practices aligns firmly with fiduciary responsibility, as it ensures environmental risk and opportunities are factored into financial decisions.
You don’t need to have all the answers today, as long as you start the journey—setting targets, building plans, and being honest about where you are. Disclosure through CDP is a proven way to begin, benchmark progress, and build trust with stakeholders.
To mark the launch of our innovative Transition Finance Gateway, we sat down with Torun Reinhammar, Head of Capital Markets Europe at CDP - one of the four data providers helping to power the Gateway with market-renowned climate transition data.
Could you please tell us a little about the history of CDP and its creation?
CDP was founded 25 years ago when three visionary climate idealists, concerned about the existential and imminent risks presented by greenhouse gas emissions, had an idea - to bring critical climate data to light and create a practice of environmental disclosure, so investors could make better, more informed decisions.An opportune moment came when the UK Prime Minister Tony Blair invited CDP co-founder Tessa Tennant to explain the plan at 10 Downing Street, helping to bridge the gap between the government and investor communities. And so, on 4 December 2000, what was then known as the Carbon Disclosure Project (CDP) was established.
A small CDP team persuaded 35 forward-looking investment firms holding the purse of USD 4 trillion in assets to become the founding signatories, influencing 245 initial companies to disclose their emissions.
Today, environmental disclosure is considered one of the most strategic weapons in the much-needed acceleration of capital flows and policy toward Earth-positive impact.
CDP is known globally as the independent driving force where enterprise, capital, policy and science meet, and continues to be a vanguard organization in the fight for the Earth’s ecosystems and the protection of future generations.
What transition data do you provide?
CDP’s corporate questionnaire – completed by nearly 25,000 companies last year - collects data on the key climate transition plan elements.This includes governance indicators (such as board-level oversight and climate expertise), strategic planning, scenario analysis, financial planning details associated with a credible climate transition, value chain and policy engagement, climate-related risks and opportunities, emissions accounting, and climate and net-zero targets.
Why is this data so important?
Engaging with portfolio companies on the importance of environmental transparency is essential for effective monitoring and achieving superior risk-adjusted returns, assessing the risks and opportunities that are vital for long-term financial performance. CDP data shows that in 2023, companies reported USD 165 billion in potential financial gains, related to upstream climate-related opportunities - this is 8.4 times greater than the USD 19.7 billion needed to realise these opportunities.A credible climate transition plan is a critical environmental consideration, and it is increasingly essential for accessing capital, improving business efficiency, and meeting regulatory and market expectations.
CDP enables organisations to disclose in a standardised, comparable format—because a plan is only as strong as the data behind it, and data is most powerful when it’s consistent and transparent.
Organisations that disclose through CDP year after year tend to provide more comprehensive transition data. In fact, 41% of repeat CDP disclosers report against “some,” “many,” or “all” of the key transition plan indicators, compared to just 30% of first-time disclosers. Nearly all companies reporting against all 21 indicators are repeat disclosers.
How can financial institutions use this data to finance the transition towards net-zero by 2050?
Financial institutions can access primary environmental data reported directly through CDP by nearly 25,000 companies on how they are managing climate change, water-related impacts and deforestation risk. With data going back to 2011, capital markets can track corporate progress over time and understand how companies are evolving. By accessing the largest primary environmental dataset in the world, these decision-makers can have in their hands the data needed to power the transition towards net-zero by 2050.Take CDP’s Net-Zero Alignment Dataset (NZAD) as an example. It helps identify companies with 1.5°C-aligned targets and transition plans, and engage those without. Using temperature alignment scores, emissions metrics, and transition plan data, NZAD enables financial institutions to assess the credibility of corporate climate commitments and track performance trends.
These insights allow investors to evaluate ambition in context, supporting capital allocation toward companies that are not only setting targets but also demonstrating the capacity to meet them.
If you could put forward one call to action to issuers that have yet to start their transition journey, what would it be?
Environmental risk is financial and operational risk, seen through the disruptions, supply chain vulnerabilities and market shifts that arise as damage to the environment persists impacting both short and long-term financial performance.That means that the transition to a sustainable economy is no longer optional; it’s a business imperative – and a fiduciary responsibility. Regulators and customers are looking for credible action that future-proofs the economy, and the first step is understanding and disclosing environmental impact. For financial institutions, integrating environmental considerations into investment and lending practices aligns firmly with fiduciary responsibility, as it ensures environmental risk and opportunities are factored into financial decisions.
You don’t need to have all the answers today, as long as you start the journey—setting targets, building plans, and being honest about where you are. Disclosure through CDP is a proven way to begin, benchmark progress, and build trust with stakeholders.
