What is the Carbon Disclosure Project (CDP)?
CDP is a non-profit organisation that provides a global system for companies, cities and states to measure and disclose their environmental impacts, risks and opportunities related to climate change, water security and deforestation.
CDP reporting is widely recognised as a leading standard for environmental reporting and is increasingly used by companies to demonstrate their commitment to sustainability and transparency. Many investors and organisations also use CDP data to assess companies’ environmental performance and integrate sustainability into their investment decisions. By reporting on environmental performance and sustainability practices, companies can demonstrate that they are proactively managing their environmental risks. Commitment to sustainability and transparency also builds trust with stakeholders such as investors, customers and employees.
How does CDP reporting work?
In CDP reporting, companies answer a detailed questionnaire on various environmental topics such as greenhouse gas emissions, energy consumption, water management, supply chain management and governance. The answers are then reviewed and scored by CDP. The results are shared with investors, customers and other stakeholders to help them make informed decisions about the company’s environmental performance and sustainability practices.
Who is CDP reporting relevant for?
CDP reporting is relevant to companies across all sectors and industries, especially those with significant environmental impacts or exposure to environmental risks and opportunities related to climate change, water security and deforestation. This includes companies in energy, transport, industry, agriculture, mining and finance sectors.
Companies operating in regions or sectors particularly vulnerable to the impacts of climate change, such as extreme weather events, sea level rise and water scarcity, may face increasing regulatory and market pressures to manage their environmental risks and reduce their greenhouse gas emissions.
Companies operating in regions or sectors particularly vulnerable to the impacts of climate change, such as extreme weather events, sea level rise and water scarcity, may face increasing regulatory and market pressures to manage their environmental risks and reduce their greenhouse gas emissions.
CDP holds the largest environmental database in the world, in 2022 scored nearly 15.000 companies on their climate change, forest and water security disclosures. Major US federal suppliers are now required by law to disclose environmental impacts through the CDP.
Why is it important?
CDP reporting is important for several reasons. First, transparency creates trust towards investors, shareholders, customers and other stakeholders. Also, reporting provides insight into progress and identifies risks. Finally, organisations are assured of complying with the latest laws and regulations.