There's a "change a comin..." and it's not just the climate
CDP (formerly the Carbon Disclosure Project) is known as the gold standard for environmental disclosure and runs the largest environmental reporting system globally. Over 590 investors with over US$110 trillion in assets specifically request companies to disclose through the CDP framework. The CDP framework is used by investors, companies, government bodies, cities, states and regions across the world.
Investors and purchasers request their companies annual disclosure through CDP across up to three environmental themes - climate change, water security and forests. When you receive a request to respond, you are being asked on behalf of your investors and or customers. Even if you don’t receive a request, you can still respond to CDP as a ‘self-selected’ organisation.
Over 13,000 organisations reported into CDP in 2021 with expectations that will continue to grow exponentially as it has done over the last 21 years of CDP’s history.
Organisations can move from basic disclosure and awareness scores through to scores in the A’s and B’s of management and leadership levels. The CDP Climate change questionnaire also has alignment with TCFD and is a great way to respond to those recommendations as well as track progress and performance across other environmental aspects. As organisations move through their CDP journey, they can even reach the dizzy heights of the ‘A list’, which demonstrates the highest level of environmental leadership. However, there are certain A list criteria that need to be met in order to break into this coveted leadership territory.
It’s an important time to start evaluating your CDP response. There have been some changes to questionnaires and scoring methodologies (around 30% change to the climate change questionnaire from 2021 to 2022). If you have been improving your score incrementally, now is the time to consider and prepare for your disclosure to reflect your company’s environmental credentials and make sure that you won’t be missing any important points. If you are new to CDP, now is the time to understand what data points CDP requests, and what your data gaps might be. You have between now and 11th April when the platform opens.
1) Be aware of changes to the questionnaire(s)
The CDP questionnaires are updated annually. Make sure you are aware of the questions for this year and any metrics that might be new for you to report on. Looking at this now, will give you enough time to make the necessary changes internally in your organisation to include new metrics for this reporting cycle starting in April. If you regularly respond, a response to a question may be pre-populated from the prior year. Make sure you are aware of which responses have prior year information and update the information as necessary.
2) Be sure to respond on time
CDP online response system will open in April and companies need to complete and submit their response by 27th July 2022 in order to be eligible for scoring and inclusion in reports.
Also be aware that if you haven't been asked by an investor or supply chain customer to respond to CDP, the minimum version of the questionnaire will not be enough to be eligible for a score. The full version of the questionnaire will need to be completed by the scoring deadline to be eligible for a score.
3) Plan with sufficient time for senior sign off
Get planning now, if you haven’t already, leaving lots of time for collecting the information, reviewing, and ensuring all the right people are involved. Make sure to plan for senior level sign-off before the deadline (taking into account any periods of time when final approvers may be ‘out of the office’.)