Published: 18 April 2024
Contributors: Alice Gomstyn, Alexandra Jonker
CDP, formerly known as the Carbon Disclosure Project, is an international nonprofit organization that provides an environmental impact disclosure system for use by both the private and public sectors. CDP promotes annual environmental reporting and transparency as critical for building a sustainable economy, combating climate change and creating a net-zero future.
CDP claims the most comprehensive collection of self-reported environmental data in the world. Data collection from the CDP disclosure process enables CDP to track companies’ and cities’ progress on several sustainability issues and calculate scores for each disclosing entity. The CDP scores are intended to provide a snapshot of an entity’s environmental performance and incentivize management of environmental impacts.1
The CDP framework for reporting environmental information is one of several major ESG reporting frameworks and global disclosure systems. Others include frameworks by the Task Force on Climate-related Financial Disclosures (TCFD), the GHG (greenhouse gas) Protocol, the Global Reporting Initiative (GRI) and the Science-Based Targets initiative (SBTi).
Launched in London in 2000 as the Carbon Disclosure Project, CDP initially called for greenhouse gas emissions disclosures as a way to establish information sharing among companies and stakeholders, such as investors. Founders hoped that making such environmental data available could encourage action on climate change.
The nonprofit organization issued its first CDP questionnaire, which asked companies to disclose their carbon emissions, in 2003. A decade later, the organization shortened its name to CDP to reflect its broader scope of environmental disclosures and the diversity of entities with which it works.
In addition to seeking disclosures on carbon footprints, CDP also requests disclosures that are related to deforestation, water security and plastic use. Its reach now extends beyond companies to include cities, states and regions.
On the CDP website, the organization lists four sustainability and environmental issues as its key areas of focus for data collection.
CDP requests that the world’s largest companies provide information on climate risks and opportunities to take low-carbon measures through the CDP climate change questionnaire. The CDP data collected through the questionnaire includes Scope 1, Scope 2 and Scope 3 emissions as defined by the GHG Protocol as well as information on governance, business strategy, the use of carbon credits, internal carbon pricing—the monetary value companies assign to GHG emissions—and more.
CDP requests that companies measure water impacts and efforts to improve water security. The organization also helps companies identify partnerships that can aid with the latter. According to CDP, at least USD 77 billion was under threat from water risk in supply chains in 2023.2
CDP considers deforestation to be one of the world’s most significant environmental challenges—affecting climatic regulation, water resources and biodiversity. Through its framework, CDP tracks the avoidance of deforestation in agricultural production. The organization is also expanding its scope to track avoidance of the destruction of other natural ecosystems.
CDP promotes disclosure of plastic-related activities. This provides a foundation for companies to create strategies to reduce their plastic use and pollution. Such disclosure and resulting strategies may also help companies get ahead of evolving local and global regulations governing plastic use.
Since its founding, CDP expanded its portfolio of disclosing entities. In addition to seeking disclosures from companies, it requests disclosures from governments and public sector organizations, including city, state and regional governments, and public authorities. In 2023, nearly 25,000 organizations participated in CDP data disclosures, including over 23,200 companies (worth two-thirds of global market capitalization) and more than 1,100 cities, states and regions.
Companies can also work with CDP to obtain environmental impact disclosures from members of their supply chains, while investors can use CDP data to inform decision making and risk management. More than 700 financial institutions with over USD 67 trillion in assets and more than 300 major purchasers with over USD 6.4 trillion in procurement spend request information through CDP.
CDP scores are metrics that are intended to show organizations and their stakeholders where they stand on addressing climate change, deforestation and water security through disclosure. Disclosures in consecutive years can help companies track their progress over time.
CDP uses a scoring methodology aligned with the Taskforce on Climate-Related Financial Disclosures (TCFD). Companies and cities are scored from “D-” to “A,” while companies that are asked to disclose but fail to do so receive “F” grades. Entities that earn “A” scores lead the way in performance on environmental impact disclosures and environmental stewardship. In 2023, more than 400 companies and 120 cities around the world received “A” scores from CDP and were included in the CDP annual “A List.”
CDP works with nonprofit and government organizations to promote policies that align with CDP’s goals. The organization’s partners include the United Nations Global Compact, the United Nations Marrakech Partnership for Global Climate Action, the European Commission’s Zero Pollution Stakeholder Platform, Water Europe and the Alliance for Climate Action Brazil.
Simplify the capture, consolidation, management, analysis and reporting of your environmental, social and governance (ESG) data.
Establish an ESG data strategy to operationalize sustainability goals and increase transparency.
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ESG stands for environmental, social and governance and refers to a set of standards used to measure an organization’s environmental and social impact.
ESG reporting frameworks are used by companies for the disclosure of data related to the environmental, social and governance (ESG) aspects of the business.
Corporate social responsibility (CSR) is the idea that businesses should operate according to principles that make a positive impact on society and the environment.
CSR reporting is the practice of reporting an organization’s performance of non-financial metrics, providing transparency on the organization’s impact on society and the environment.
Decarbonization is a method of climate change mitigation that reduces greenhouse gas (GHG) emissions, as well as removes them from the atmosphere.
Carbon offsets can play an important role in funding green projects and bringing the world closer to net zero.
Footnotes
1 “What we do.” (link resides outside ibm.com). CDP. 2024.
2 “Water now a major risk for world’s supply chains, reports CDP.” (link resides outside ibm.com). CDP. 22 March 2024.