Unpacking Climate Disclosures in the S&P 500: What Corporate Actions Reveal Beyond Politics – Insights from UCLA Anderson Review

It might seem odd to discuss corporate climate data during a time when the U.S. government has shifted focus away from environmental regulations. President Trump’s promise to boost the coal industry and reduce oversight from the Environmental Protection Agency (EPA) paints a bleak picture. However, measuring and sharing climate data is essential, no matter the political climate. This ongoing effort helps us understand and tackle the pressing threat of climate change.

In early May 2025, Bill Gates noted that resistance to climate action might eventually subside. He pointed out the growing global investment in tackling climate issues. Organizations like the American Geophysical Union and the American Meteorological Society have stepped in to continue vital climate assessments, filling gaps left by government changes.

At the UCLA Center for Impact, we’ve been tracking climate disclosure among major U.S. companies. Recent data shows notable advancements:

• Disclosure of Scope 1 greenhouse gas emissions reached 89.5% at the end of 2023, up from 82.8% the previous year.
• Scope 2 disclosures improved to 88.7%, a rise from 80.8%.
• While Scope 3 emissions, which occur within supply chains and represent a large portion of greenhouse gases, increased to 69.8% from 56.4%, there’s still much to do in this area.

Though these improvements seem positive, they don’t match the urgency of our climate crisis. With wildfires, floods, and extreme heat becoming more frequent, we must accelerate our efforts. Additionally, the inconsistency in reporting standards makes it challenging to assess progress effectively.

Why focus on the S&P 500? These companies are among the most influential in the market. Their actions often set trends for others to follow, especially since investors scrutinize their climate efforts closely. This makes them a valuable measure of overall progress.

While some governments are retreating from climate accountability, places like California and the European Union are taking a stand. New regulations are coming into effect, expanding the number of companies required to disclose their environmental impacts. For instance, the EU Corporate Sustainability Reporting Directive will bring about 50,000 companies into this reporting ecosystem.

Here are more insights based on recent data:

• Among S&P 500 firms, the number with a net zero target for Scope 1 emissions slightly increased from 281 to 283 in 2023. Scope 2 targets grew from 273 to 275, while Scope 3 saw a more significant jump, from 119 to 150 companies.
• There’s a disconnect when it comes to climate risk disclosures. Only 69.6% of S&P 500 firms reported these risks in line with the Task Force on Climate-Related Financial Disclosures, down from 76% the previous year.
• Transition plans for reducing emissions are lacking across industries. Only 38.7% of utility companies and 38.5% of materials firms have outlined such plans. In the high-emission energy sector, only 21.7% have made any disclosures.
• Governance related to climate preparedness is unclear. Nearly half of companies with transition plans don’t specify who oversees them. Only 9.7% of board members in S&P 500 companies have backgrounds in environmental fields, suggesting a significant gap in expertise.

As we gather and analyze this data, it’s crucial to distinguish between genuine climate action and superficial efforts. The ultimate goal remains clear: to advance our understanding and responses to climate change effectively. While challenges exist, continued tracking and reporting will drive progress and accountability.

For further reading, you can explore the EU Corporate Sustainability Reporting Directive and its implications for global business practices.

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