As the flowers begin to bloom and the days get longer, I am always reminded of the period that sustainability professionals fondly refer to as “CDP season”.
So what exactly is CDP?
CDP (formerly the Carbon Disclosure Project) is a not-for profit charity. It runs a voluntary global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. Every year, companies disclose across a wide range of environmental topics including climate, forests and water security.
2023 was another record year for CDP with over 23,000 companies, representing US$67 trillion in market capitalization, disclosing their environmental performance data to CDP. A growing number of companies are disclosing to CDP annually, cementing CDP’s role as a leading framework for voluntary disclosure.
Benefits of disclosing to CDP?
With all the different disclosures out there, you may be wondering why you should also consider disclosing to CDP. We are encouraging our clients to consider the tangible business benefits to be gained from it:
- Reputation: build trust by promoting transparency and responding to rising environmental concern among the public.
- Benchmark: CDP’s disclosure system allows companies to benchmark their environmental performance against their industry peers using an internationally recognized sustainability score and receive feedback on their progress every year.
- Risks and opportunities: Measuring and reporting data each year improves awareness, helps identify emerging environmental risks and opportunities that would otherwise be overlooked, to inform data-driven strategy and ensures strategy is informed by relevant data.
- Regulation: CDP disclosure represents evolving best practice and continually adopts, aligns or integrates with impactful, high quality global and jurisdictional-level standards. Voluntary disclosure through CDP will provide companies with a competitive edge and position them ahead of the trend for future anticipated mandatory disclosure requirements.
Key changes for 2024
- Integration of questionnaires: CDP is rolling out a new integrated format for the full corporate questionnaire, which combines all three existing questionnaires across climate, forests, and water security into one integrated questionnaire. However, companies will continue to be scored separately on climate change, water security, and forests. Plastics and biodiversity questions will not be scored in 2024.
- Alignment with reporting frameworks and standards: CDP intends to strengthen alignment with all impactful, high-quality global and jurisdictional-level environmental reporting standards and frameworks as they develop. The 2024 questionnaire will be aligned with the IFRS S2 standards and is already partially aligned to TNFD. CDP has announced its intention of aligning with TNFD & the SEC climate disclosure rules, and currently assessing the CDP Portal with the ESRS from an environmental perspective. The consolidation of the CDP and multiple other standards under the ISSB will hopefully support this.
- Supply chain: Supply chain questions, intended for organisations requested to report on their supply chain, will be integrated throughout the questionnaire instead of being in a separate module.
- SME questionnaires: CDP are launching a tailored questionnaire specifically designed for small and medium enterprises (SMEs). This step aims to enhance the disclosure experience for SMEs by offering a streamlines and simplified questionnaire better suited to their organisational size.
- Impacts and dependencies: The questionnaire will emphasise evaluating environmental impacts and dependencies, alongside assessing risks and opportunities, for a more comprehensive approach to sustainability.
Additional information on changes to the 2024 disclosure can be found here.
Key dates:
CDP has revised this year’s disclosure cycle to reflect the changes to the questionnaire and disclosure platform. Please see below the amended 2024 timeline published by CDP:
- 16th of April: Platform open for authorities requesting disclosure
- 30th of April: Questionnaire becomes available
- 4th of June: Questionnaire opens for corporate response
- 18th of September: Scoring deadline for corporates
- 2nd October: Corporate disclosure ends
CDP assesses a company’s disclosure and environmental responses through their level of detail and comprehensiveness in the questionnaire. The scoring methodology drives action by taking companies on a journey from disclosure through awareness-level engagement and environmental management, and finally to environmental leadership.
With the revamped CDP questionnaire for 2024, companies have an opportunity to showcase their commitment to bold leadership on sustainability.
If you’d like to find out how we can support you through the 2024 disclosure cycle, please reach out.
