What is CDP?
Formerly known as the Carbon Disclosure Project, CDP is a nonprofit organisation that runs a global disclosure system for companies and governments to report on their environmental performance.
CDP is one of the oldest and largest ESG (environmental, social, and governance) reporting organisations, and respondents include major brands like Apple and PepsiCo.
For the last 20 years, CDP has helped businesses in various sectors measure and manage their risks and opportunities related to climate change, water security, and deforestation.
CDP is also one of the organisations working with the Science Based Targets initiative.
What is CDP reporting?
CDP reporting requires collecting data and using it to fill out questionnaires via CDP’s Online Response Portal.
The resulting report may be public or private, and is used to inform investors and to produce CDP scores.
CDP reporting covers three main areas: climate change, water, and forests.
Like many ESG frameworks, the CDP framework is primarily about disclosure, transparency, and accountability. It enables corporations and governments to disclose information in a structured way, and enables investors and other interested parties to compare the performance of respondents.
What is a CDP score?
A CDP score assesses an entity’s environmental performance.
Companies and governments that disclose to CDP are scored using letter grades A to D-, and different scores are provided for each focus area (climate change, water, and forests).
Scores are calculated using questionnaire responses. An entity’s score is based on the level of detail and the comprehensiveness of the content it provides in the questionnaire, as well as the organisation’s awareness of climate change, water, and forest issues; management methods; and progress toward actionable change.
CDP scores are an example of ESG ratings. These scores are used by some investors and other stakeholders to inform decision making.
What is the CDP A List?
The CDP A List is for companies who receive “leadership level” CDP scores of A or A-.
Companies and governments that make the A List have gone above and beyond awareness and management to become leaders on environmental transparency and action.
The 2020 A List features more than 300 companies, including major organisations like L'Oreal, Adobe, eBay, Volkswagen, Hewlett Packard, PepsiCo, Danone, Levi Strauss, and more.
To be included on the A List, a company only has to receive an “A” score in one of the three focus areas of CDP reporting. For example, a company that receives an A in climate change and a C in water will still make the A list. In fact, only about 10 companies on the A List have received an A score in all three key areas.
CDP Scoring Guidance
CDP respondents are assessed across four levels that represent the steps an entity moves through as it progresses toward environmental stewardship:
Slightly different scoring methodologies are used for each of the three areas of focus, and CDP’s 2020 questionnaires took a sector-focused approach, with sector-specific questions aimed at high-impact industries.
Not all respondents are scored on all three focus areas; an organisation might be scored on climate change, but not water or forest, for example.
Those interested in learning more about CDP scoring guidance and methodologies can find information on CDP’s website and via the 2020 Scoring Introduction.
Enabling CDP reporting with sustainability software
As your company works to become a leader in sustainability, ESG reporting software like Rio can help.
Through comprehensive data analysis, ESG governance tools, automated reporting based on leading ESG frameworks, and even automatic tracking of the associated carbon footprint of all monitored activity, Rio helps organisations mitigate their environmental impact and improve performance.
Learn more about ESG Frameworks.