If your company is responding to CDP this year, now is the time to start thinking about your strategy for submitting your company’s disclosure and maximizing your score. As a CDP Silver Climate Change consultancy partner in the U.S., ADEC ESG has spent years helping companies improve their CDP disclosures. Drawing on our experience, we’ve identified five actions that every company should take to ensure CDP success this year.
1. Start early
If your company has responded to CDP for a while, you likely already recognize that the questionnaire is a cross-functional effort across many departments. In addition to the core sustainability team, disclosure leads will often require the support and input of legal, finance, risk, supply chain, and/or operations teams.
The CDP questionnaire has also continued to evolve and become more holistic. On top of collecting information on climate change, forests management, and water security, the questionnaire addresses datapoints relevant to biodiversity, plastics, and—most recently—oceans.
The best way to improve your CDP performance is to start early. Given the wide range of topics covered and varying levels of input from subject matter experts (SMEs), it is best to start the data collection process—specifically data exploration—early to identify key SMEs and the quality and availability of your data. This will enable you to define a clear plan for questionnaire completion.
If you haven’t already, consider signing up for a CDP score feedback call with one of our experts. We’ll walk you through specific aspects of your response, and you’ll receive tailored advice on what your score represents, how your response was evaluated, and how to improve your reporting program.
2. Use CDP’s guidance materials
Every year, CDP releases reporting guidance and scoring methodologies that companies should use when drafting their responses. CDP provides guidance that explains each question in detail, such as the information or datapoint requested, the required format, and where to find tools or further information to construct your answer. They also provide the complete scoring methodology and list of essential criteria, including those for the A List, so that companies know exactly what is expected of a high-scoring response.
In addition to the guidance and methodology documents, companies can also review CDP’s numerous technical notes to help with their disclosure. Covering a wide range of topics from how to approach data restatements to fuel definitions to climate transition plans, these documents can help companies be sure that they are reporting data in line with CDP’s definitions.
In addition, CDP’s technical notes map the topic to the relevant CDP question number as well as to various ESG standards, frameworks, and initiatives to which CDP has aligned its questionnaire—such as the TCFD recommendations. This information helps companies identify overlaps and efficiencies in reporting (see item 3 for details).
By utilizing these tools, companies can identify areas within their response which have received historically lower scores and take steps to bridge gaps during the upcoming cycle.
3. Tap into your ecosystem of reporting
CDP continues to enhance the alignment of its questionnaire with the world’s most relevant frameworks and standards. Companies can realize the benefits of CDP’s “write once, read many” vision to translate disclosed datapoints into meaningful action.
Currently, the questionnaire is fully or partially aligned with the following standards:
- International Financial Reporting Standards (IFRS) S2 Climate-related disclosures
- European Sustainability Reporting Standards (ESRS) E1
- Recommendations of the Task Force on Nature-Related Financial Disclosures (TNFD) and Task Force on Climate-related Financial Disclosures (TCFD)
- Global Reporting Initiative (GRI)’s Climate Change: 102, Energy: 103, Water & Effluents: 303 and Biodiversity: 101 Standards.
The questionnaire also supports disclosures in alignment with the GHG Protocol, AFi for forests, and CEO Water Mandate and integrates pilot questions related to the EU Taxonomy objectives.
Given the wide reach of its alignment, companies can unlock a high degree of reporting efficiencies by reviewing the type of information disclosed in its entire reporting ecosystem. By evaluating your Sustainability Report alongside other disclosures, CDP can help to highlight the areas of data overlap and misalignment, presenting an opportunity to enhance data quality, consistency, and traceability across reporting outputs.
4. Keep responses self-contained
Because the CDP questionnaire is moving towards alignment with a multitude of other ESG standards, frameworks, and initiatives, it may be tempting to reference the other reporting your company may be doing. However, when developing your responses for each question, avoid references to responses for other questions, responses from previous years, or other external sources.
Since each question and response is scored and analyzed by CDP on an individual basis, references to sources outside of the individual response itself will not be considered. While some answers may seem repetitive or duplicative, be sure to fully provide the required information for each case. URL links to external sources will also not be considered, so if there is an attachment that you would like to include, check the question portal to confirm if the particular question is set up to accept attachments.
5. Set a goal for your disclosure
Before getting too deep into the questionnaire, take a moment of pause to evaluate what your goal for completing the disclosure is. Are you trying to address a specific questionnaire request from a supply chain member? Is your organization striving for CDP’s A List this upcoming cycle, or are you hoping to maintain the score from the previous cycle? While there may be different pressures and drivers that ultimately influence your decision to respond, we recommend establishing a definition of success.
Understanding what your ultimate goal is will allow you to prioritize your efforts around specific areas. Due to the resource-intensive nature of CDP disclosure, efficiently allocating time and effort to achieve a set goal is key to streamlining your reporting process.
For example, if a company is aiming for CDP’s A List, providing strong, quality responses is critical. If another company in the same sector could copy and paste your response and still have it make sense, your response is too general. Where appropriate, include references to specific facilities (logistics, transportation, manufacturing, production), trademarked products, locations (city, state, and country), and specific metrics. In this case, CDP, TCFD practitioners, investors, and end users of CDP responses seek information on what your specific company is doing to understand and reduce its environmental impact, not what a company like yours might do.
On the other hand, in some instances, an organization may not be comfortable with this company-specific, high level of disclosure, and this is a situation that disclosure leads must plan around. In some cases, this may entail an in-depth conversation with your Legal departments to explore what the comfort lines of disclosure may be. Depending on what cannot be disclosed, A List status may not be a feasible goal, and instead, an organization may opt to prioritize a disclosure strategy that still demonstrates progress and a commitment to sustainability without such a high degree of granularity, or simply strive for full completion of the questionnaire in good faith.
As a CDP Silver Climate Change consultancy partner in the U.S., ADEC ESG has the knowledge and expertise to help you get the most out of your CDP disclosure and improve performance across your sustainability reporting programs—and beyond. Contact us to learn more about how we can help.
This blog provides general information and does not constitute the rendering of legal, economic, business, or other professional services or advice. Consult with your advisors regarding the applicability of this content to your specific circumstances.
