By Danielle Doza

‘Tis the season . . . of CDP reporting. Companies will once again, or for the first time, begin the process of compiling data, calculating greenhouse gas emissions, drafting responses, and submitting to CDP. 

 

What is CDP?

CDP, formerly known as Carbon Disclosure Project, is a reporting platform for the disclosure of sustainability initiatives, KPIs, and other information on climate, forests, and water security. Companies that respond will provide information on, mostly, environmental and governance issues related to social and environmental sustainability. This includes Scope 1, 2, 3 emissions, waste, climate risk, how sustainability is integrated into the company, what positions are responsible and in what ways, if the company has set sustainability targets, and more. The response is scored on a D – A grading system. Disclosure can be public or private (public disclosure is required for public companies). 

D – Disclosure

C – Awareness

B – Management 

A – Leadership

The portal for 2023 corporate disclosure opens on April 17th. Submissions are due by July 26th.

CDP was ranked as the number one reporting platform on the Corporate Survey from ERM’s SustainAbility Institute’s 2023 Rate the Raters report. “CDP was ranked the most useful ESG rating provider by both corporate and investor respondents. On quality, it ranked #1 with corporate respondents and #2 with investor respondents.” If companies want to evaluate their ESG/sustainability rating, CDP is a great place to start, whether you respond publicly or privately. A private disclosure ensures that your company’s response will only be viewed by a requesting entity (customer or investor) and CDP. 

According to CDP, 74% of respondents say that disclosure helps their companies better prepare for the future. Many companies are typically being asked to respond to CDP by their customers or investors. With an increasing emphasis on reducing Scope 3 emissions, large companies need to know the emissions of their suppliers – the major source of their Scope 3 impact. CDP is a trusted source for evaluating a company’s ESG impact and commitment to sustainability. “CDP is the gold standard for corporate environmental reporting and is fully aligned with the TCFD recommendations.”
As we like to say, if you are a supplier, your Scope 1 and Scope 2 emissions (at the least) are your customer’s Scope 3.

Why should a company disclose to CDP?

The business case for responding is pretty strong. Here are just a few of the reasons your company should disclose: 

  • Supplier preference – More companies are evaluating their suppliers based on responses to sustainability reporting platforms. Some will, or have already, implemented a preferred supplier system for suppliers that have better disclosure responses. If your customer is asking you to respond, you should heavily consider it. 
  • Brand credibility – Companies are using a good CDP score to further build their brand as a trusted product or service. The CDP A-List, for example, exhibits that a company is a leader on environmental sustainability. 
  • Identify opportunities and risks – Use quantitative and qualitative data to identify environmental risks – to physical assets, supply chain, energy needs, etc. – and opportunities to add value to the business. 

For more information, see the CDP’s benefits of disclosure list.

CDP Disclosure Support

Venture Forward Strategies can support your company through the CDP disclosure process. Contact us to get started and enhance your CDP response. 

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