A new report from the global environmental disclosure platform CDP shows that companies acting on climate risk data are not just doing good for the planet – they are securing serious financial gains. In 2024, firms disclosed that every dollar spent on mitigating physical climate risks could yield up to $21 in returns, with the average return sitting at seven times the investment. That “disclosure dividend” is no longer a theoretical concept; CDP’s analysis of nearly 25,000 corporate disclosures found that companies reporting environmental opportunities unlocked a combined $4.4 trillion in value last year. The remaining $13.2 trillion in untapped opportunities signals a vast, still-open field for proactive businesses.
For Africa, the implications are stark and urgent. The continent is already losing an estimated 2–5% of GDP each year to climate impacts, and adaptation costs are expected to run between $30 and $50 billion annually this decade. Global projections warn that climate damages could hit $38 trillion per year by 2050, with the harshest economic shocks concentrated in low- and middle-income regions like Africa. Against that backdrop, the kind of risk-to-opportunity transformation outlined in CDP’s report is more than good news – it is a potential lifeline for economic resilience.
Crucially, the policy environment in Africa is shifting to make this possible. Several countries – including Ghana, Kenya, Nigeria, Tanzania, and Zambia – have announced plans to adopt the International Sustainability Standards Board (ISSB) reporting framework, which will align African companies with global best practice in climate and sustainability disclosure. South Africa’s Johannesburg Stock Exchange has already issued climate and sustainability guidance, while Kenya this year introduced both a Green Finance Taxonomy and a Climate Risk Disclosure Framework. These tools give investors and lenders a clearer picture of which projects count as “green” and help direct cheaper capital toward them.
The sectors with the highest near-term returns for African companies mirror the areas of greatest climate exposure. In the power sector, distributed renewable energy and battery storage can quickly displace expensive diesel generation and reduce losses from grid instability. In agriculture, investments in drought-resistant seeds, efficient irrigation, and cold-chain logistics can cut losses, expand market reach, and build resilience against extreme weather. Nature-based solutions, from mangrove restoration to watershed protection, offer both ecological and financial paybacks by reducing insurance costs and protecting infrastructure – but these require robust monitoring and community consent to avoid the reputational pitfalls that have hit some carbon offset projects in the region.
Capital markets are also showing how disclosure can become a bridge to finance. Nigeria pioneered sovereign green bonds in Africa, issuing its first in 2017, followed by subsequent offerings, and is now preparing a ₦50 billion third series in 2025. Egypt has used its sovereign green bond proceeds to fund clean transport and water projects. Each of these cases demonstrates how credible data, combined with clear project pipelines, can draw in both domestic and international investors.
The CDP’s findings also highlight a significant gap. While 90% of large companies disclosing to CDP have processes to assess environmental risks, less than half have developed a climate transition plan. Without such plans, risk assessments remain static reports rather than engines for investment and operational change. In Africa’s context, that means missed opportunities to turn climate threats into profitable, resilience-building projects.
The takeaway for African boardrooms and finance chiefs is clear: climate disclosure is no longer just a compliance exercise. Done right, it is a deal pipeline – a way to map where the value lies, secure capital at better rates, and build long-term competitiveness. The 7x return CDP highlights is not an abstract global average; it is within reach for African companies that can pair credible data with executable plans, align projects with emerging green taxonomies, and invest in resilience where it pays back fastest.
The “disclosure dividend” is real. For Africa, the prize is not only profitability but a stronger, more climate-resilient economy. The next decade will show which companies seize that chance – and which watch the opportunity pass them by.
