CDP assesses companies, organizations and authorities that voluntarily manage and disclose their environmental impact, risk management practices and take steps toward sustainable operations.
The CDP was originally focused on greenhouse gas emissions, but has expanded over the past 20 years to include water security and deforestation. Data is gathered on these three areas through questionnaires, which are regularly revised and expanded to take into account sectoral changes. The most recent update was in February 2022. It has the world’s largest and most comprehensive dataset of corporate greenhouse gas emissions and energy use and is backed by nearly 800 institutional investors representing more than U.S. $106 trillion in assets.
CDP partners with accredited external solutions providers who offer additional support. It provides reports that analyze the wealth of data submitted, and policy briefings that aid in the development of key climate and environmental legislation.
Its transparent scoring methodology helps respondents understand exactly what is expected of them. Companies are asked to disclose through CDP by their customers and investors, complete questionnaires on climate change, forests and water security, and submit them via CDP’s online reporting platform. The collected data allows organizations to identify ways to manage their own environmental risks and opportunities and to share research with customers and investors and the market in general. The questionnaires are released in January, and companies must submit their response to investors or customers using the online response system by the end of July.
Companies receive two separate scores – one for disclosure and another for performance – using a 100 point scale. CDP recognizes top-scoring companies in its annual scoring process by including them in its “A list”.
“Every company in every sector needs to get involved in climate action as it impacts every industry. To get more companies in the lubrication industry on board, we would like to see the companies that are more advanced calling on their suppliers to disclose their climate impacts through CDP and start engaging them to improve their climate performance. Suppliers should read the disclosure responses of the leaders and learn from them. The crucial step is to set a climate target and report on progress towards it,” Sonya Bhonsle, CDP’s global head of value chains, told Lubes’n’Greases.
CDP (formerly known as the Carbon Disclosure Project) is an international non-profit organization comprising of CDP Worldwide Group (headquartered in London, England), CDP North America, Inc. (based in New York, United States), CDP Europe AISBL (with offices in Belgium and Germany) and regional offices and local partners in 50 countries.
CDP was regarded as the world’s most credible sustainability rating in 2013. In 2020, more than 9,600 companies disclosed through CDP, which represents a 14% increase over the previous year, and a 70% jump from 2016, the year the Paris Agreement was signed, CDP states in its website. This was in addition to the hundreds of cities, states and regions who disclosed through CDP. Some of the corporations that report through CDP include supermarket chains Walmart and Tesco, food and beverage company Cadbury Schweppes, household products manufacturer Procter and Gamble, and thousands of others.
While CDP is a non-profit organization, it requests a small contribution towards costs from companies and investors participating in its system, and an annual administrative fee for companies responding to one or more of their investor requests. It also offers subsidized and enhanced contributions and some fee exemptions.
CDP is working with other sustainability and reporting organizations, including the Climate Disclosure Standards Board, Global Reporting Initiative, the Integrated CCC and the Sustainability Accounting Standards Board, on a comprehensive corporate reporting system for companies, Bhonsle said.