Carbon Disclosure Project
The global standards for sustainability impacts.
Carbon Disclosure Project is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states, and regions to manage their environmental impacts. Over the past 20 years, we have created a system that has resulted in unparalleled engagement on environmental issues worldwide.
CDP FEATURES
What Is Carbon Disclosure Project
Introduction of Carbon Disclosure Project
The Carbon Disclosure Project (CDP) is a nonprofit organization that runs a global environmental disclosure system for companies, cities, states and regions. Founded in 2000, CDP pioneered using capital markets and corporate procurement to motivate companies to disclose their environmental impacts and to reduce greenhouse gas emissions, safeguard water resources and protect forests. Nearly 10,000 organizations disclosed data through CDP in 2022, including more than 1,900 companies worth half of global market capitalization, and over 1,100 cities, states and regions.
What are CDP’s objectives?
CDP’s objectives are to:
- Drive companies and other organizations to disclose environmental information
- Use that information to assess and manage environmental risks and opportunities
- Mobilize investors to demand action on climate change and other environmental issues
- Support the transition to a low-carbon, sustainable economy
How does CDP work?
CDP sends annual questionnaires to companies, cities, states, and regions, asking them to disclose their environmental data. The data is then analyzed by CDP and made available to investors, companies, policymakers and the public. CDP also provides tools and resources to help organizations disclose their environmental data and to manage their environmental risks and opportunities.
What are the benefits of disclosing environmental information?
There are many benefits to disclosing environmental information, including:
- Improved transparency and accountability
- Reduced environmental risks
- Increased access to capital
- Enhanced brand reputation
- Improved employee morale
- Increased customer loyalty
Carbon Disclosure Project Criteria and framework levels
Climate: CDP seeks to enhance corporate awareness by measuring and disclosing carbon and climate change risks. CDP requests climate risk and low-carbon opportunity information from the world’s largest companies on behalf of 746 institutional investor signatories with a total of US$136 trillion in assets and 330+ major purchasers with over US$6.4 trillion in procurement spend.
Water: The global water crisis poses a substantial financial risk to companies, yet it also presents significant opportunities for innovation. CDP provides a platform for companies and investors to measure, manage, and report on the impact of water-related challenges. By responding to our questionnaire, companies can disclose their environmental data, while investors can engage by becoming Investor Signatories to request this data from major companies and purchasers, fostering transparency and proactive action.
Forest: CDP offers a platform for companies, investors, states, and regions to measure and manage their forest-related impacts, risks, and opportunities. Aligned with international best practices and global environmental goals, progress is assessed and publicly reported. Companies can share their environmental data through our forests questionnaire, while investors can become Investor Signatories to request this data from major companies and purchasers.
Plastics: Plastic waste and pollution are detrimental to our global ecosystems, economies, and communities. Whilst this crisis is a major financial risk to companies, it also serves as a significant opportunity. Acting on plastics can create new business opportunities that bring future commercial value. In 2023, 3000+ companies disclosed plastics for the first time through CDP, a significant step toward making action on plastics business as normal. However, voluntary action alone is not enough. Now is the time for governments to act. To close the data gap and effectively track progress against targets, governments must agree on a treaty that includes comprehensive mandatory corporate disclosure.
Carbon Disclosure Project Framework Levels
Disclosure Level: This level assesses the extent to which an organization provides comprehensive and transparent information regarding its environmental performance. High disclosure scores indicate a more thorough and informative response.
Awareness Level: Reflects how well the entity understands and addresses climate change risks and opportunities. It considers whether the organization has identified and assessed relevant issues.
Management Level: Assesses the effectiveness of the entity’s environmental management practices. It looks at the strategies and actions taken to mitigate risks, capitalize on opportunities, and drive positive environmental outcomes.
Leadership Level: Represents the highest level of achievement, indicating that the organization not only manages environmental impacts effectively but also demonstrates leadership in sustainability practices. Leadership-level entities are often considered exemplary in their commitment to transparency and action.
Registration Procedure
CDP registration and rating procedure is a process that companies go through to disclose their environmental impact to CDP. The process is designed to help companies improve their environmental performance and to provide investors with information about the environmental risks and opportunities of companies.
The CDP registration and rating procedure is as follows:
- Registration: Companies that want to disclose their environmental impact to CDP must first register with CDP. Registration is free and can be done online.
- Disclosure: Once a company is registered with CDP, it must complete a disclosure questionnaire. The questionnaire asks for information about the company’s greenhouse gas emissions, water use, and other environmental impacts.
- Scoring: CDP scores the disclosures that companies submit. The scoring system is based on the completeness and accuracy of the disclosures.
- Reporting: CDP publishes the scores of companies that disclose their environmental impact. The scores are available to investors and other stakeholders.
The CDP registration and rating procedure is a valuable tool for companies that are committed to environmental sustainability. The process can help companies improve their environmental performance and to attract investors who are looking for companies that are committed to environmental leadership.
Professional Credentials
CDP offers a variety of professional credentials for individuals who are working in the field of environmental sustainability. These credentials can help individuals advance their careers and make a positive impact on the environment.
The following are some of the different Carbon Disclosure Project professional credentials:
- CDP Certified Professional (CCP): The CCP credential is the most advanced credential offered by CDP. CCPs have demonstrated expertise in environmental sustainability and have a proven track record of success in the field.
- CDP Associate (CA): The CA credential is designed for individuals who are new to the field of environmental sustainability. CAs have a basic understanding of environmental issues and are able to apply this knowledge to their work.
- CDP Foundation (CF): The CF credential is designed for individuals who are interested in learning more about environmental sustainability. CFs have a basic understanding of environmental issues and are able to apply this knowledge to their everyday lives.
Individuals can achieve CDP professional credentials by completing the CDP certification process. The certification process requires individuals to provide information about their education, experience, and skills. Individuals can complete the certification process online.
CDP professional credentials are a valuable tool for individuals who are working in the field of environmental sustainability. Credentials can help individuals advance their careers and make a positive impact on the environment.
Key Features
1. Disclosure Platform: CDP provides a platform for companies to disclose their environmental data, including information on carbon emissions, water usage, and deforestation risks.
2. Scoring and Rating System: CDP evaluates and scores companies based on their environmental disclosure and performance. The scoring system includes different levels, reflecting the organization’s commitment to transparency and sustainability.
3. Investor Engagement: CDP facilitates engagement between companies and investors by allowing investors to become signatories and request environmental data from major companies, contributing to informed investment decisions.
4. Global Reporting Framework: CDP’s reporting framework follows international best practices and aligns with global environmental goals, providing a standardized and comparable approach to assessing environmental performance.
5. Focus on Multiple Environmental Issues: CDP addresses various environmental issues, including carbon emissions, water management, deforestation risks, and other factors that contribute to companies’ overall environmental impact.
6. Support for States and Regions: In addition to companies, CDP extends its support to states and regions, offering them opportunities to measure, manage, and report on their environmental dependencies, impacts, and progress.
7. Opportunities for Innovation: CDP emphasizes the potential for companies to identify and act on opportunities for innovation, creating new business models, products, and services that align with future commercial value.
8. Continuous Improvement: The framework encourages companies to commit to ongoing improvement, fostering a culture of continuous refinement of products and processes to enhance environmental performance.
Pros and Cons of Implementation
The Carbon Disclosure Project is a valuable tool for companies that are committed to environmental sustainability. CDP’s disclosure process can help companies identify and reduce their environmental impacts. CDP’s disclosure process can also help companies attract investors who are looking for companies that are committed to environmental leadership.
Here are some of the pros and cons of implementing the Carbon Disclosure Project:
Pros
- Improved environmental performance: By disclosing their environmental impact to CDP, companies can identify and reduce their environmental impacts.
- Increased investor interest: Investors are increasingly looking for companies that are committed to environmental sustainability. By disclosing their environmental impact to CDP, companies can demonstrate their commitment to environmental leadership and attract investors who are looking for companies that are committed to environmental sustainability.
- Enhanced reputation: CDP’s disclosure system is a trusted source of information about environmental performance. By disclosing their environmental impact to CDP, companies can enhance their reputation with customers, employees, and the public.
- Access to resources: CDP provides a variety of resources to help companies improve their environmental performance. These resources include training, tools, and networking opportunities.
Cons
- Time-consuming: The CDP disclosure process can be time-consuming and resource-intensive.
- Costly: The CDP disclosure process can be costly, especially for small and medium-sized businesses.
- Complexity: The CDP disclosure process can be complex and difficult to understand.
- Voluntary: The CDP disclosure process is voluntary, which means that companies are not required to participate.
Overall, the Carbon Disclosure Project is a valuable tool for companies that are committed to environmental sustainability. However, the CDP disclosure process can be time-consuming, costly, and complex. Companies should carefully consider the pros and cons of implementing the CDP before making a decision.
