Unmasking Corporate Climate Issues with CDP
In a world where environmental concerns have taken the spotlight, the Carbon Disclosure Project (CDP) has emerged as the driving force behind corporate transparency and sustainability.
Accelerating the Rate of Change
Since 2000, CDP has been on a mission to achieve a long-term thriving economy with the planet and people at the forefront, and that starts with building awareness of climate change. The not-for-profit organization’s rich and comprehensive environmental dataset has helped them gain a renowned reputation for running the global disclosure system for thousands of companies, investors, cities, and governments.
While its emphasis has been on measuring, disclosing, and reducing carbon emissions for companies, CDP has expanded to holistically target all areas of climate change, nature, and indirect operational impacts. Through CDP’s Supplier Engagement Rating (SER), corporate supply chains are evaluated on their engagement with climate issues, bringing awareness to an underrepresented area of corporate sustainability. In 2021, CDP launched the five-year Accelerating the Rate of Change strategy to enhance corporate transparency and support a variety of environmental issues, such as deforestation, water security, and protecting biodiversity.
Breaking Down the CDP Global Disclosure System
Over the past two decades, CDP has made major strides in improving corporate transparency through its global disclosure system. Every year, responding companies share accurate and comprehensive environmental data through the Online Response System (ORS). A company is assigned a score based on general questions on climate change, forests, and water security, as well as industry-specific topics.
A company’s score determines its environmental impact and progress, which can be used as a deciding factor in how to take further action. Scores are ranked on the following scale from highest to lowest progress: Leadership (A score), Management (B-/B score), Awareness (C-/C score), Disclosure (D-/D score), or Failure to disclose (F score). To achieve an impressive A score, a company must show environmental leadership, and disclose action on climate change. Over several reporting cycles, companies can discover risk areas, opportunities for improvements, and the overall trajectory of their environmental progress.
Disclosure season operates during the first half of the year, but it can take up to a year to prepare the required data. In 2023, the questionnaire opened in January and closed on July 26. Responding companies can typically expect their score in October each year.
Creating A Culture of Transparency
While companies are not required to participate, it is highly recommended to engage with CDP if you want to take environmental action and avoid an ‘F’ score. CDP’s influential global network and status as the gold standard for sustainability reporting can yield an improved reputation and greater investor confidence for your company. Some stakeholders, investors, and customers might request your environmental data, so knowing your CDP score can ensure you can meet this expectation and help you stay ahead of regulation. Especially with increased awareness and concern for the environment among the public, it is critical to be honest about your company’s environmental impact to avoid greenwashing.
A Partnership for a Greener Future
The demand for corporate disclosure is rapidly growing, in part due to new guidelines and regulations. In 2022, CDP experienced a record-breaking disclosure year with nearly 20,000 participating organizations, up 38% from the previous year and an overall 233% increase since the signing of the Paris Agreement in 2015. Along with the increasing rate of CDP disclosure, there has also been a rise in participation in other climate initiatives. 57% of repeat CDP respondents have set science-based targets (SBTs), compared to just 26% of first-time respondents, which shows an astonishing commitment to climate action beyond disclosure.
CDP reporting just wrapped up for this year, but it is never too late to start thinking about the environmental impact of your business and get a headstart for next year. Many organizations work on their carbon report year-round to achieve a disclosure high score and meet the needs of their customers.
As an accredited CDP partner, the RyeStrategy team is knowledgeable about the reporting process and can help your business take its first step toward carbon neutrality by providing the proper resources and support along the way. If you’re interested, contact info@ryestrategy.com to get started.
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About RyeStrategy
Based in Seattle, RyeStrategy is a CDP-accredited, mission-oriented company specialized in carbon accounting, mitigation coaching, and climate disclosure solutions for organizations at any point in their sustainability journey. Learn how RyeStrategy helped Salesforce, Ideascale, and Wazoku achieve their sustainability goals.
From exhaustive carbon footprinting and mitigation coaching, to setting science-based targets and reporting climate data to CDP, SBTi or custom reporting platforms, RyeStrategy acts as a hands-on extension of the team, custom-tailoring services to fulfill climate disclosure requirements easily and accurately.
Meet with a sustainability specialist to learn more about RyeStrategy solutions.
