Module 7: Environmental performance – climate change
When thinking about climate change reporting, many people go immediately to carbon emissions quantification, and while this is an essential part of a CDP report, it’s not the only factor to consider. Other elements to report are:
- Emission methodology and exclusion
- Scope 1, 2, and 3 Emissions Inventory
- Biogenic Emissions
- Emissions Data - Agricultural commodities
- Emission Breakdowns
- Energy Related Activities
- Electricity Transmission and Distribution
- Production Data
- Intensity and Efficiency Metrics
- Other Climate-Related Metrics
- Targets
- Emissions Reduction Initiatives
- Best Available Techniques
- CCS/U
- Land Management Practices
- Life-Cycle Emissions Assessment
- Product-level emissions
- Low-carbon products and services
- Project-based carbon credits
Module 8: Environmental performance – forests
Forests disclosures document an organization’s use and dependence on forest commodities and the risks and opportunities related to this. The level of detail in the forest disclosures will vary significantly by industry or the companies within an investment portfolio. Some of the information collected in this module includes:
- Exclusions
- Commodity breakdown
- Own land usage and location (production volumes)
- Commodity sourcing locations (sourced volumes)
- Biofuels
- Commodity-specific targets
- Traceability
- Deforestation and conversion free (DCF) status metrics and methods to determine DCF
- Status and progress towards Deforestation and Conversion Free (DCF)
- Certified commodity volumes sold
- Emissions
- Legal compliance
- Landscape and Jurisdictional approaches
- Initiatives/activities
- Ecosystem restoration projects
Module 9: Environmental performance – water security
Water quality and water scarcity are critical concerns for businesses, governments, and everyday people around the world. The CDP’s water disclosures help companies understand and reduce their dependence on freshwater sources, including throughout their value chain. These disclosures include:
- Exclusions
- Company-wide water accounting
- Facility-level water accounting & verification
- Water efficiency and Water
- Products and services
- Water-related targets: water quantity, water quality, WASH, other
Module 10: Environmental performance – plastics
The annual increase in plastic production presents serious threats to global ecosystems, economies, and communities. Enhancing the visibility of plastic footprints through comprehensive corporate disclosure is crucial. This transparency serves as a vital foundation, enabling companies to develop effective strategies to reduce their plastic usage and mitigate the associated pollution. This module aims to address the need for transparency around plastic usage and can be used to collect the following information:
- Plastics targets
- Plastics activities
- Plastics metrics for plastic polymers
- Plastics metrics for durable goods/products and durable components
- Plastics metrics for plastic packaging
- Metrics for end-of-life management
Module 11: Environmental performance – biodiversity
CDP acknowledges the interconnectedness of biodiversity, climate change, and all nature-related issues. Consequently, starting in 2024, all corporate disclosers, except for SMEs and public authorities, will be required to report basic biodiversity data points. Some of the information collected in this module includes:
- Exclusions
- Actions on biodiversity-related commitments
- Biodiversity indicators
- Land resourced and land disturbed
- Areas important for biodiversity
- Artisanal and small-scale mining (ASM)
- Biodiversity Action Plan (BAP)
- Impacts on biodiversity
- Strategic business plan
- Biodiversity-related targets
- Mitigation hierarchy
- Additional conservation actions
- Closure and rehabilitation
- Engagement activities
Module 12: Environmental performance – financial services
Designed to address questions specifically pertinent to the financial services sector, this module can include topics like financial products and services, portfolio valuations, portfolio emissions, and the broader environmental impact of investment portfolios. Some of the information collected in this module includes:
- Environmental impact of portfolio and emissions breakdown
- Portfolio values
- Environmentally sustainable products/services
- Portfolio targets
How is CDP reporting used?
While conscientious and detailed environmental reporting is critical to slowing the effects of global warming and protecting fragile natural resources, the impact of the CDP goes much further.
CDP data is used by investors and purchasers when making business decisions. Low carbon opportunities and climate risks reported to the CDP are evaluated by 680 institutional investor signatories with a combined US$130 trillion in assets and more than 280 major purchasers with over US$6.4 trillion in procurement spend.
Furthermore, the CDP meets the requirements of the Task Force on Climate-related Financial Disclosures (TCFD). As of 2024, CDP disclosure is also aligned with the ISSB climate standard (IFRS S2) as well as partially aligned with the European Sustainability Reporting Standards (ESRS), the TNFD recommendations, and the United States SEC’s climate disclosure rule.
Programs like these aren’t simply about compliance or good corporate citizenship. They’re actively shaping the future of business and how investment decisions are made.
Not only that, reports submitted to the CDP are also publicly available through the CDP website. To view reports, you’ll need to register an account, but even without one, anyone can search for reports based on geography and view submissions along with CDP Scores.
What is a CDP score?
No one likes a failing grade, but the CDP Score is an important part of tracking your organization’s progress to achieve environmental goals and improve overall sustainability performance year-over-year.
To this end, the CDP assigns a score to each submitted report by category. This means an organization’s climate change disclosure may have a different CDP Score than their forests disclosure. Plastics and biodiversity will remain unscored as CDP wishes to empower more companies to begin disclosing these environmental issues before starting scoring.
And while scores can (and hopefully should) improve over time, the CDP stresses that achieving an A grade does not mean the organization has achieved its environmental goals, only that it has the policies, awareness, and competences in place to achieve them and demonstrate leadership over time.
Scores are given to each disclosure and are, broadly speaking, as follows:
- F – This is a Failing score where the necessary information has not been disclosed.
- D-/D – This is the Disclosure level score. A D- or D score indicates that a disclosure has been made, but that it perhaps doesn’t include the level of detail needed to show a real awareness of the implications of the disclosure on a business’s operations or organizational strategy into the future.
- C-/C – This is the Awareness level score. Here, the organization has moved beyond simple disclosure and shows a better-documented awareness of how the information disclosed has real implications for both the current state of operation and future planning.
- B-/B – This is the Management level score. Moving beyond awareness, now the reporting organization has taken real action to manage its environmental impacts. The company has moved past data gathering and is now actively managing risks and seeking opportunities to improve its environmental performance.
- A-/A – The highest is the Leadership score. This demonstrates the organization is showing true environmental leadership. Their disclosures show best practices with environmental considerations fully integrated into strategy and policy. The definitions for leadership follow the recommendations of the TCFD Accountability Framework.
With CDP scores publicly available on the CDP website, the incentive is there for organizations to strive toward higher grades as new annual reports are filed.
Benefits of reporting to the CDP
As climate and environmental-related disclosures become an increasingly important consideration in investment decisions, reporting to the CDP and programs like it are a standardized way of documenting your environmental performance for investors and may even be mandated by capital partners and financial institutions.
Beyond investor requirements though, there are a number of additional benefits for organizations submitting public environmental reports. These include:
- Improved reputation – Whether you’re a corporation or government entity, showing conscientious environmental performance and particularly improvement over time elevates your reputation with customers, stakeholders, and even your own employees.
- Greater competitive advantage – One of the major benefits of improved reputation and more access to investment is business growth and greater competitive advantage.
- Documented progress and benchmarks – Claims to sustainability are a common feature of most corporate and institutional websites these days. Having a well-documented and independently-verified environmental report validates these claims and documents your successes.
- Future-proof your operations – The term “future-proof” comes up in many environmental reporting frameworks, but the truth is completing the CDP’s environmental risk assessments helps uncover previously unknown risks within your organization and in the value chain.
- Proactively manage regulatory obligations – New environmental regulations are emerging all the time, particularly as we approach the 2030 date to limit global temperatures to a 1.5℃ increase. Building a CDP-compliant reporting program proactively reduces the workload when new legal obligations arise.
Fully embracing a program like the CDP takes your organization beyond vague and largely unquantifiable claims of sustainability and moves toward real documented action which can only be beneficial over time.
Need help?
Reporting to the CDP can be a labor-intensive undertaking. There is a lot of information to collect from multiple parties, departments, offices, and even from customers and suppliers. If your organization is new to environmental reporting and you need to manage your learning curve, or if you want to streamline your data collection, a software partner like Quentic can help.
Our CDP-accredited Platform will help you keep track of the data you need to compile, use verified methodologies to quantify environmental impacts like carbon emissions and water discharges, and provide a CDP-compliant report that can be customized as you need.
If you’re ready to get your CDP reporting program off on the right foot, contact an Quentic team member today.
