What is CDP?
CDP is a popular voluntary reporting framework that companies use to disclose environmental information to their stakeholders (investors, employees, and customers). Reporting is completed on an annual basis with the portal opening in April every year with submissions due in July.
CDP maintains this data in an open database and proclaim to hold the world’s most comprehensive collection of self-reported environmental data.
How does CDP work?
For companies, CDP currently offers three questionnaires (Climate Change, Water Security, and Forests). Each of these is scored using different methodologies. The questionnaires includes general questions alongside sector-specific questions aimed at high-impact sectors. The scoring of CDPs questionnaires is conducted by accredited scoring partners trained by CDP.
As illustrated in the diagram below, the information captured by CDP can be used by both investors and by the reporting organizations themselves.
Who is using CDP?
Back in 2003 CDP reporters numbered in the low hundreds. Since then reporting numbers have grown significantly, if not exponentially; This chart shows that in 2020 over 9,617 companies used the CDP framework to disclose their environmental metrics.
What are the challenges associated with CDP reporting?
CDP consists of a long list of questions for organizations to answer. In 2021 this took the form of an 88 page document with over 200 questions. Gathering the required data and responding to a CDP questionnaire is no small undertaking. In a 2021 report, Verdantix Smart Innovators: Corporate ESG & Sustainability Software, Verdantix (an independent analyst firm) estimated that:
“Responding appropriately to a CDP questionnaire…can take a team of 30 employees more than 40 workdays’ effort.”
How does ESG+ sustainability software support CDP reporting?
The CDP Climate Change questionnaire includes a combination of qualitative and quantitative questions. Sustainability reporting software is particularly well-suited supporting answers to the questions that require quantitative data. Software can simplify emission calculations, particularly in calculating Scope 2 emissions using the required market-based method. In addition, it can be useful for maintaining a library of emissions factors used to calculate emission intensity, absolute emissions (Scope 1, Scope 2 location based, Scope 2 market based and Scope 3), and can separate emissions by country/region, group, facility and activity.
How does Envizi support reporting to the CDP Climate questionnaire?
In this video we outline the ways in which Envizi supports the quantitative questions contained within the CDP Climate questionnaire, to save you time, improve accuracy, and simplify the reporting requirements around market-based emissions.