The Carbon Disclosure Project (CDP) is an international non-profit organisation that aims to transform the way the world does business to prevent climate change. Founded in 2000, the CDP works with over 590 institutional investors with over $110 trillion in assets to encourage companies to disclose their carbon emissions, climate risks, and environmental strategies.
The CDP collects and disseminates environmental data from thousands of companies globally and provides this information to investors, businesses, policymakers, and the public. The CDP is the leading platform for companies to disclose their climate-related risks, opportunities, and impacts. Its goal is to drive action towards a low-carbon and sustainable economy.
The CDP encourages companies to disclose their climate-related data by inviting them to participate in its annual questionnaire. The questionnaire is sent to companies across the world, requesting them to disclose their environmental impact, such as greenhouse gas emissions, water usage, and deforestation. Companies are also asked to report on their sustainability strategies and governance practices.
Carbon Scoring System
The Carbon Disclosure Project provides a scoring system for companies to evaluate their performance in addressing climate change, ranging from A to F. This scoring system helps investors and other stakeholders identify which companies are taking action to reduce their carbon footprint, minimise environmental risks, and improve their sustainability practices.
Companies that score high on the CDP questionnaire gain recognition for their sustainability performance, which can attract socially responsible investors and customers. On the other hand, companies that score low risk losing their reputation, facing regulatory scrutiny, and losing investor confidence.
The CDP has helped raise awareness of climate change issues among businesses, investors, and policymakers. Its work has driven significant progress in corporate sustainability, leading to an increased focus on reducing carbon emissions, improving supply chain sustainability, and developing renewable energy sources.
The CDP has become a critical platform for businesses to disclose their environmental data, enabling them to track their progress and identify opportunities for improvement. Companies that participate in the CDP can compare their performance against their peers, leading to healthy competition and innovation in sustainability practices.
The Carbon Disclosure Project also provides investors with valuable data on the environmental and social risks and opportunities associated with their investments. This data helps investors make informed decisions about which companies to invest in, leading to more sustainable investments and a greener economy.
The CDP has grown significantly since its inception in 2000, with over 10,000 companies now participating in its program. In 2021, the CDP disclosed data from over 9,600 companies, representing over 50% of global market capitalisation. The CDP’s work has contributed to a significant increase in corporate sustainability initiatives, with many companies adopting science-based targets to reduce their carbon footprint and align with the Paris Agreement’s goals.
The CDP has also helped drive the development of the Task Force on Climate-Related Financial Disclosures (TCFD), an initiative launched in 2015 by the Financial Stability Board to develop consistent climate-related financial risk disclosures for companies. The TCFD provides a framework for companies to disclose their climate-related risks and opportunities, ensuring that investors have access to consistent and comparable information to make informed investment decisions.
In conclusion, the Carbon Disclosure Project is an essential organisation that has driven significant progress in corporate sustainability over the past two decades. Its work has encouraged companies to disclose their environmental data, leading to increased transparency and accountability, and enabling investors to make informed investment decisions. The CDP has become a vital platform for businesses to track their sustainability performance and identify opportunities for improvement. Its work has contributed to a greener economy and a more sustainable future for all.