Glossary term
CDP (formerly Carbon Disclosure Project)
Subject: Sustainability and ESG, ESG Frameworks, Standards and Disclosure
Also known as: Carbon Disclosure Project
CDP is a non-profit that runs a global system through which companies, cities and regions report environmental data on climate, forests and water, and which investors and buyers use to compare them.
Explanation
CDP started as the Carbon Disclosure Project and now uses the short name alone. Each year it sends questionnaires, on behalf of investors and large purchasers, to companies that answer on their emissions, targets, risks and governance of climate, forests and water. Responses are scored on a letter scale, from disclosure through to leadership, and many are published. Investors use the scores in screening, and buyers ask suppliers to respond so they can build up their own value-chain emissions data. The questions are aligned with major frameworks such as the TCFD recommendations, which reduces duplicate work. A company that does not answer may still be scored. Several investor stewardship programmes and procurement teams draw on its scores, so a poor or missing response can shape who gets capital or contracts.
Example
A food retailer receives a request from its investors to complete the CDP climate questionnaire. Its sustainability manager gathers emissions figures from facilities teams, asks the top fifty suppliers to respond separately, and has the board review the answers. The company scores a middle grade and uses the feedback to set a target for reducing supplier emissions.
Not to be confused with
- ESG Ratings
- CDP scores cover environmental disclosure and performance only, from a questionnaire the company answers. ESG ratings are wider and usually built by analysts from public data.