The Carbon Disclosure Project (CDP) is a globally recognized non-profit organization that operates a platform for organizations to measure, disclose, manage, and share vital environmental data. By facilitating comprehensive disclosure, the CDP enables stakeholders to:
The CDP's mission is to accelerate the transition to a low-carbon and sustainable economy by providing a global system for organizations by awarding them a CDP score.
A CDP score refers to the performance rating assigned to companies based on their environmental disclosure and management practices as reported through the Carbon Disclosure Project (CDP) questionnaire. The score provides insights into how well an organization is addressing environmental risks, managing emissions, and implementing sustainable practices.
Widely recognised by investors and customers alike, CDP scores range from A to D- based on the quality and comprehensiveness of the company's disclosure and performance, with each having different scores:
The Disclosure Score reflects the extent to which a company provides comprehensive and transparent information on its carbon emissions and climate-related initiatives. It assesses the company's reporting practices, data quality, and transparency in disclosing carbon-related risks and opportunities.
The Performance Score assesses the company's actual environmental performance and progress in reducing carbon emissions. It takes into account factors such as emissions reduction targets, renewable energy usage, energy efficiency measures, and overall climate change strategy.
Companies are given a score that reflects the completeness of their disclosure and also partially how well the companies are performing environmentally - the more complete the questionnaire, the higher the score.
Reporting to the Carbon Disclosure Project (CDP) is voluntary, but it is encouraged for companies, cities, states, regions, and other organizations that aim to measure, disclose, manage, and improve their environmental performance.
The specific requirements for reporting to the Carbon Disclosure Project (CDP) may vary depending on the type of organization and the specific questionnaire they choose to respond to. However, there are general guidelines and expectations set by the CDP for reporting entities:
It is important to note that the CDP periodically updates its reporting requirements and questionnaire frameworks to align with evolving sustainability standards and best practices.
It’s also worth noting that companies need to measure Scope 1, 2 and 3 emissions accurately on a yearly basis and implement actions to mitigate risks. There is a very specific emphasis on accurate data collection, validation, and verification processes to ensure the credibility of reported information too.
That’s why it’s best for organizations to be on the front foot when it comes to understanding their carbon footprint, so that they’re better prepared for any changes in regulation.
Adhering to the Carbon Disclosure Project (CDP) and actively participating in its reporting process can bring several benefits to organizations. Here are some key advantages:
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CDP publishes reports and analysis based on the aggregated data it receives from participating organizations. However, individual company responses are typically kept confidential.
The CDP operates on an annual reporting cycle.
Yes, the CDP offers guidance and support through its reporting framework, questionnaires, and resources. Organizations can access templates, guidance documents, and webinars to help them understand and meet the reporting requirements.