CDP Reporting: Your Guide to Disclosures & Scoring

liam-bossi-thumbnail
Liam Bossi
Co-founder & Chief Product Officer

Liam is a purpose-driven leader with nearly 20 years of experience across Strategy, Sustainability, and Operations. His experience connects macro, big-picture creative thinking in strategic planning & innovation with detailed execution in engineering, manufacturing, and supply chain. Over the course of his career, Liam has consulted on supply chain & ESG issues with leaders in the apparel, automotive, electronics, and chemical industries.

Liam holds his B.S. in Chemical Engineering and a Master’s Degree in Environmental Engineering, both from MIT, and has completed Executive Education courses in finance, business development, and innovation at Stanford and New York University.

CDP (Carbon Disclosure Project) is a global non-profit organization that provides a standardized system for companies to disclose environmental impacts. It has become crucial for managing and mitigating climate risks and demonstrating transparency and accountability to stakeholders.

The growth of CDP disclosures has exploded in recent years. In 2023, over 23,000 companies reported directly to the CDP, and 330 CDP Supply Chain Members requested sustainability data from 47,000+ suppliers.

This increase is largely due to growing awareness of the climate and nature-related risks that affect companies, the impact of increasingly complex global supply chains, and new global sustainability disclosure mandates.

This guide is designed to bring you up to speed on how CDP evaluates business sustainability performance, how to maximize your CDP score, and how sustainability software can support your CDP reporting efforts.

Key Takeaways for Businesses on CDP Reporting:

  • Accurate and comprehensive data collection is the surest way to maximize your CDP score. Plan ahead to avoid rushed submissions that could result in lower scores and damage your brand reputation.
  • Sustainability software can simplify the process of collecting, calculating, and reporting GHG emissions data, so you can submit a strong CDP report and ensure compliance with new global ESG disclosure mandates.
  • You can stay ahead of evolving sustainability regulations and expectations by integrating robust sustainability strategies and governance structures into your core business operations.

What is CDP?

CDP, formerly known as the Carbon Disclosure Project, is a UK-based non-profit that operates an environmental impact disclosure system for companies, countries, investors, regions, and cities.

Founded in 2000, CDP has grown from just 245 companies reporting on their climate performance data in the first year of reporting to over 23,000 companies in over 100 countries reporting on a host of environmental factors in 2023.

A Visual Timeline of CDP Reporting Milestones
Source: CDP

Today, CDP is considered the gold standard for environmental and supply chain ESG reporting. Companies and investors look to CDP for trusted, transparent, and fair environmental disclosures and ratings as they work to measure and manage ESG risks and opportunities related to climate change, water security, and deforestation.

What is CDP reporting?

CDP reporting requires that companies collect specific qualitative and quantitative environmental metrics and use them to fill out questionnaires via CDP’s online response portal. The resulting report is reviewed and given a CDP score that can be used to inform stakeholders of the company’s ESG performance.

CDP reporting takes place on an annual cycle. An updated questionnaire and reporting guidance are released early in the year on the CDP website. The online response system (ORS) opens in Q2 each year so that companies can submit their responses before they close in Q3. CDP scores are subsequently released in the fourth quarter.

To get ahead of the game, we recommend that companies start the CDP reporting process in Q2. This will enable you to collect all of the relevant data and get assurances to ensure accurate reporting and a high score. Waiting until Q3 could result in a rushed process with possible data errors, leading to a lower score and loss of brand reputation. With this urgency in mind, reach out to our team for assistance on your CDP submission.

What is the CDP questionnaire?

Since the first CDP questionnaire was issued in 2002, it has evolved to reflect investors’ and other companies’ needs for specific environmental information. Today, CDP reporting now includes aspects of environmental reporting beyond climate change, comprising information on water, deforestation, biodiversity, and plastic use. These were added due to the interrelatedness of environmental topics and the growing financial risks surrounding them.

Until 2024, the CDP included only three questionnaires for climate, water security, and forestry, plus additional questions about biodiversity practices and plastic usage. However, in 2024, all of those were integrated into a single, comprehensive questionnaire. There are also specific questions for companies, cities, regions, and financial institutions.

Here is a breakdown of the main CDP reporting themes:

  • Climate: Climate Change is the primary focus of CDP. In 2023, 62% of respondents reported only on climate information. CDP expects companies to share a greenhouse (GHG) emissions inventory and calculation methodology, information on energy usage and mix, governance of climate data and strategies, emissions reduction targets and strategies, climate risks and opportunities, internal carbon pricing, and more. The CDP climate questionnaire aligns with most global reporting frameworks and regulations (CA Climate Rules, TCFD, ISSB, SBTi) in order to simplify the ESG disclosure ecosystem.
  • Water: CDP introduced its water security questionnaire in 2009. It is the second most common questionnaire that companies are asked to complete. Reporting companies are expected to report on their water risks and opportunities, governance practices, performance targets, and strategies.
  • Deforestation: The forestry questionnaire was released in 2011. Reporting companies are expected to address how they produce, source, and use four key forest risk commodities: timber, cattle products, soy, palm oil, and, in some cases, rubber, cocoa, and coffee. It includes questions regarding the risks and opportunities related to using these products, the impacts, governance processes, and strategies.
  • Biodiversity: Biodiversity does not have its own questionnaire. However, in 2022, biodiversity-related questions were included in the forestry questionnaire, and a section addressing biodiversity in the climate questionnaire (C15) includes questions related to whether the reporting company assesses and has a strategy to reduce negative biodiversity impacts.
  • Plastic: Plastic does not have its own questionnaire. However, in 2023, a plastics section was included in the water security questionnaire (W10). It questions whether a reporting company maps where plastic is used in its value chain, the potential risks and business impacts, targets, metrics around the weight of plastic polymers sold and in packaging, and more.

Changes to CDP in 2024:

  • Questions on the main reporting themes, along with the three questionnaires, were integrated into a single questionnaire in 2024.
  • There are also now specific questionnaire for small to medium-sized businesses (SMEs) with fewer data points, simplified question formats, and enhanced guidance to reduce the burden of reporting.
  • Some companies can use a minimum version of the CDP questionnaire, which is less in-depth, if they receive a request from a supply chain CDP member and have an annual revenue threshold of less than $250 million.
  • Companies that use the minimum version to report can receive a CDP score but cannot get on the CDP A-List.
  • CDP has worked to align its questionnaire with other ESG reporting frameworks to ensure reporting is comparable, consistent, and accurate. In 2024, their new questionnaire closely aligns with the International Sustainability Standards Board (ISSB) climate-related standard (S2).
A Visual Chart of How CDP Integrates to other ESG and Sustainability Reporting Frameworks

What is a CDP score?

CDP scoring is based on a rating system from A-F. Getting on the CDP A-List is extremely difficult. Of the 23,000+ that reported to the CDP in 2023, only 21,000 companies received a score, and only 400 of those got an A in climate, water, or forests (362, 103, and 13 respectively). Only 11 companies received an A for all three categories.

Here is a breakdown of each CDP score:

  • A-/A (Leadership): To get an A for any questionnaire theme, companies must be proven leaders in that field and demonstrate that they have taken action to improve their corporate impact regarding climate, water, and forestry. Leaders should also have set science-based targets for their climate targets, have robust transition plans for their transition to becoming a more sustainable company, and consider climate, water, and forestry impacts across their operations and value chains.
  • B-/B (Management): To earn a B, companies need to show that they are addressing the environmental impacts of their business. To receive a B-, they must show evidence that they are managing some aspects of their environmental impact.
  • C-/C (Awareness): C and C- scores are given to companies that are aware of the environmental impacts on their business and how their business operations impact the environment and people. Getting a C or C- depends on the level of awareness.
  • D-/D (Disclosure): D or D- is the starting point for most companies that disclose. Companies earn a point for each question that they answer. A score of D means a company has disclosed some data points.
  • F: An F is only given to companies that fail to answer a request for data from one of the 300+ members of the CDP Supply Chain, so if you receive a request for data to avoid an F, you should definitely respond.

Who reports to CDP?

Most of the world’s largest companies (91% of the FTSE 100 and 82% of the S&P 500) use CDP to report on their environmental impacts, and many now expect their suppliers to do the same. CDP has become one of the most common ways companies request environmental data from their networks of suppliers. If your company is not reporting to CDP yet, it is likely that one of your larger customers in the future will request data via a CDP questionnaire.

In 15 years (2008-2023) the number of companies receiving requests from customers to report environmental data to CDP has grown from 2,318 to over 47,000. In 2022, however, only 41% responded and took advantage of the opportunity to improve their business relationships with the requesting customers.

To ensure their suppliers do respond, companies like Microsoft are adding annual CDP disclosure of climate information to their supplier code of conduct. Australian telecom giant Telstra and pharmaceutical company Pfizer also now mandate that the companies in their supply chain report climate data through CDP.

A Visual of How Many CDP Suppliers Report into Supply Chain Requests
Source: CDP

CDP Disclosure Timeline

In previous years, CDP’s timeline has been consistent. In Q1, the new questionnaire for that year was published, in Q2 the submissions portal opened, the submissions deadline closed in July, and scores were released in Q4. However, in addition to making substantial changes to the questionnaire, the new timeline is quite different.

In 2024, the CDP questionnaire will be released on April 30th, the submission portal opens on May 14th, the reporting window opens on June 4th, the scoring deadline closes on September 18th, and the reporting window closes on October 2nd.

A Visual Time of CDP Reporting Timeline for 2024
Source: CDP

How can you maximize your CDP score?

Getting on the CDP A-list or even receiving a B-rating is a badge of honor for companies that are concerned about their ESG and sustainability impact.

Here are three steps to improving your company’s CDP score:

1. Plan Ahead

This refers to both making a strategic plan for sustainability programming ahead of time and crafting your plan for CDP disclosure.

  • Build a Sustainability Strategy: Before disclosing, make sure you have an in-depth sustainability plan, which should include:
    • Integrate Sustainability with Core Business Functions: Ensure that your sustainability goals are woven into your business operations. This shows a commitment beyond a ticking box exercise.
    • Comprehensively Assess Risks: Assess how environmental risks impact your business and integrate this into your overall risk management practices.
    • Address Board Governance and Oversight: A clear governance structure for sustainability, showing the board’s role and involvement in overseeing sustainability issues, is an important factor in the scoring process.
    • Set and Explain Environmental Targets: Define clear, measurable environmental targets. Aim to set science-based targets for an improved score.
    • Quantify Baseline Performance and Track Progress: Establish a robust baseline for your environmental performance using credible data. Continue measurements to track progress against targets.
  • CDP Disclosure Plan: Ensure you have an understanding of what is required in the CDP disclosure cycle.
    • Understand Reporting Needs: Familiarize yourself with the CDP questionnaire.
    • Gather Sustainability Data: Identify data sources and how you are going to collect and calculate them.
    • Know the Timeline: Establish a timeline that is feasible with the CDP reporting windows.
    • Clarify Responsibilities: Assign clear roles to your team members, and with suppliers or other value chain partners, if needed.
    • Define a Review Process: Outline steps for drafting, approving, and assuring the report.

2. Measure and Track GHG (Greenhouse Gas) Emissions

The emissions reporting section breaks down emissions into Scope 1, 2, and 3, as well as by fuel type, source, facility, and emissions. Since emissions account for half of your climate score, establishing a strong process for measuring and managing emissions data will put you on a strong footing to improve your score. For many companies, this will mean getting help from climate experts who can advise you on improving your CDP score and overall sustainability performance. Leveraging sustainability software is also an effective way to simplify reporting.

3. Engage Stakeholders

Another important aspect of improving your score is communicating, collaborating, and sharing data across your value chain. Getting support from your suppliers, employees, and customers is key to ensuring your company can improve its CDP score. Engaging with suppliers is especially crucial as that is where the majority of most companies’ emissions (11.4x operational emissions) and other environmental impacts are, and that is why more than 47,000 companies received requests for data from CDP in 2023.

Ultimately, building a plan to report to the CDP will require a specialized knowledge and skill set that many companies receiving requests for data from CDP have not yet built the capacity for. Fortunately, there are a number of tools that can help your company prepare accurate and quantified ESG metrics and a winning sustainability narrative in order to optimize your company’s CDP submission.

👉 Manage Scope 1, 2, and 3 GHG emissions data with Good.Lab’s advanced sustainability software. Learn how we help you simplify data collection, calculation, and reporting by clicking here.

Using a third-party with experience in CDP submissions and with access to sustainability software, such as tools to calculate Greenhouse Gas Emissions, can ensure you are accurately measuring, managing, and reporting your data and can conduct assurances, which can have a substantial impact on your score. Sustainability and climate specialists can also help you use the sustainability data that you have collected to build effective, impactful, and data-driven strategies to ensure you are prepared to meet any future requests for your sustainability data and to improve your CDP score.

Good.Lab can help your company report to CDP and improve a previous score

CDP reporting has become a crucial standard for environmental data disclosure, with many companies now requiring their suppliers to share similar information. If you haven’t started reporting to CDP or received a request yet, it’s likely only a matter of time.

As you aim to enhance your CDP score, consider leveraging Good.Lab’s sustainability software, supported by our seasoned ESG experts. Our team has successfully navigated hundreds of companies through the intricate CDP questionnaire process and helped dozens more improve their scores. For a detailed case study on how we assisted the healthcare non-profit CISCRP in achieving successful CDP submissions, click here to read their story.

👉 For expert guidance and support in your CDP reporting cycle, get in touch with Good.Lab’s team by clicking here.

If this article has sparked an interest in evaluating and addressing your company’s sustainability footprint, get in touch today to explore solutions for optimizing your CDP score and learn about how Good.Lab stands out as the best partner for your CDP application success.

CDP FAQs

Disclaimer: Good.Lab does not provide tax, legal, or accounting advice through this website. Our goal is to provide timely, research-informed material prepared by subject-matter experts and is for informational purposes only. All external references are linked directly in the text to trusted third-party sources.

liam-bossi-thumbnail
Liam Bossi
Co-founder & Chief Product Officer
Liam is a purpose-driven leader with nearly 20 years of experience across Strategy, Sustainability, and Operations. His experience connects macro, big-picture creative thinking in strategic planning & innovation with detailed execution in engineering, manufacturing, and supply chain. Over the course of his career, Liam has consulted on supply chain & ESG issues with leaders in the apparel, automotive, electronics, and chemical industries. Liam holds his B.S. in Chemical Engineering and a Master’s Degree in Environmental Engineering, both from MIT, and has completed Executive Education courses in finance, business development, and innovation at Stanford and New York University.

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