It’s that time again—corporate reporting season! Part of this process for many organizations is participating in CDP disclosures. If you’re new to CDP reporting, or aren’t sure if your organization participates, we’ve put together a handy reference guide to help you out. (This post is based on CDP’s own guidance, which is a great place to look if you have additional questions.)
What is CDP?
CDP, formerly the Carbon Disclosure Project, is the UK-based leading global system for collecting and analyzing environmental data from companies and cities, focusing on carbon/climate, water, forests, and supply chain data. CDP’s climate change, forests and water programs help businesses submit data to investors; the supply chain program enables suppliers to submit water and climate data to customers.
CDP assists 827 institutional investors holding US$100 trillion in assets by helping reveal the risk in their investment portfolios. Over 6,000 organizations are invited annually to participate in the questionnaires, which investors use as proxies to evaluate a company’s understanding of risk.
In 2016, 89 organizations engaged their supply chain through CDP, leveraging US$2.7 trillion of procurement spend to request information from over 8,200 suppliers.
Non-response can be perceived as an organization having a limited understanding of risk, or no meaningful progress to report. Responders also benefit from scoring and ranking data, helping them compare themselves to industry peers.
How do I know if my organization received a CDP questionnaire?
You can register on the CDP web page to create a free user account for searching public responses online. You can then search for companies on the website to see if yours has been issued an invitation to participate.
When participation is requested, CDP will email the relevant links at the start of the disclosure period. Companies then need to register using the appropriate link in the invitation email. If your organization already has a CDP website account, they can use the link to sign in using their existing password. If you do not received an invitation and link, you will not be able to access and edit a questionnaire online (via the dashboard).
My company has not been requested by CDP to participate; can we still disclose?
Yes! You will need to complete the Self-Selected Company (SSC) registration form and send it to email@example.com. To participate in CDP’s supply chain program, a company must be requested to disclose by one of CDP's Supply Chain Members (one of your customers or clients). You can, however, choose to disclose the same information through CDP’s climate change, forests and water programs.
Will I be penalized for declining to answer all or part of the questionnaire?
If the response is being scored, you will lose points where no answer is given. If you answer a question “no,”, or can’t provide the requested information, you should explain your reasoning, including whether you are working towards providing more data in the future.
If you choose to not provide a response at all, you will receive an “F” for Failure to Disclose.
What are the differences between a public and a non-public response?
You will be able to choose whether to make your questionnaire public or not. Public responses are accessible via the CDP website, whereas non-public responses will only be made available to the appropriate stakeholders, though they may also be used anonymously in aggregate statistics.
Will my company receive a score for the questionnaire?
Each of CDP’s company questionnaires has an individual scoring methodology, and eligibility for scoring depends on which programs you have been requested to respond to and whether you submitted by the official deadline.
For more information check out CDP’s guidelines, or contact our Corporate Reporting Dream Team for help with your disclosures.
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