I’ve been helping some of our clients here in the UK start their Carbon Disclosure Project (CDP) questionnaire. For many of them, this has come off the back of one of their own customers asking for the scorecard. We are accelerating into a commercial environment where your climate-related disclosures are a licence to operate, and to grow. That’s why I wanted to make our approach to CDP for our UK clients as transparent, and actionable as possible.
Firstly, what is a CDP scorecard?
The Carbon Disclosure Project (CDP) is a global, non-profit organisation that encourages companies and cities to disclose their environmental impact, particularly greenhouse gas emissions and climate-related data. Through the annual CDP questionnaire, companies and cities can demonstrate their commitment to climate action, and the collected data is used by investors, policymakers, and stakeholders to make informed decisions about investing in climate-conscious business.
The CDP scores show companies and their stakeholders where they are on the road towards operating in line with a 1.5-degree, deforestation-free and water-secure future. The CDP’s ethos is that “disclosure drives action” and by scoring companies from D- to A, CDP provides a transparent spectrum of action. Whilst a D- sits on the lower end of the spectrum, it is still a clear marker of disclosure which must be commended. It is also important to note that companies that achieve an A score are not at the end of their environmental journey - they are simply among the most transparent when it comes to disclosure and performance on climate change, deforestation or water security.
The CDP scoring methodology is fully aligned with the Taskforce for Climate-Related Financial Disclosures (TCFD) - which has now been merged under the leadership of the International Sustainability Standards Board (ISSB) - and with major environmental standards, and therefore provides a comparable dataset across the market.
Cool, so how can I get a good score?
Firstly, setting a credible carbon baseline to understand where your business emissions come from, and how sizable they are, is imperative to your CDP success. It’s also important to manage expectations - credible, data-driven climate-action takes time. You can’t go from zero to net zero hero overnight, but a strong ranking on disclosure is easily achieved for any business with a tech-powered carbon accounting partner.
Reporting companies are assessed and scored across four, consecutive levels which represent the steps a company moves through as it progresses towards environmental stewardship: disclosure, awareness, management and leadership. It follows that the scoring starts at -D/D at disclosure, -C/C at awareness, -B/B at management and A at leadership. The regional average in Europe is currently a C.
- Data Accuracy: Ensure accurate data collection by using reliable methodologies like the Greenhouse Gas Protocol and include all relevant emissions sources, energy consumption, and water usage. Find yourself an accredited partner who can help you collate and calculate with best practice technology.
- Transparency: Be transparent and comprehensive in your responses. Provide clear and concise information about your organisation's sustainability initiatives, targets, and progress. CDP looks fondly upon businesses who can show a comprehensive awareness of the intersection between the environment and their business operations.
- Emissions Reduction Targets: Set ambitious, science-based emissions reduction targets aligned with global climate goals like the Paris Agreement. CDP has openly published on its website that setting science-based targets, creating a climate transition plan, reducing your carbon footprint with clear reduction strategies, developing water-related risk assessment strategies, or reporting on deforestation impact for all relevant operations, supply chains and commodities - are all examples of excellence in the questionnaire responses.
- Supplier Engagement: Scope 3 is the hardest component of your carbon footprint to measure and manage. That’s why engaging, supporting and collaborating with your supply chain is critical to a successful CDP score. The first step is to communicate your intention to disclose with suppliers, highlighting your goals and the role of suppliers in achieving them. You can then ask them to share their own disclosure journey to enhance the accuracy of your carbon emissions measurements, and encourage them to disclose their environmental data on an ongoing basis to decarbonise with you.
For smaller companies, there is also the option to choose the minimum version questionnaire is designed to be a shorter, simplified version of the CDP questionnaire for first-time disclosers and small businesses. These respondents will not be scored. Those responding to the minimum version for a customer request, with an annual revenue of less than EUR/US$250million will be eligible for scoring using the minimum version of the methodology, but will not be eligible for the A List, as the scores are not comparable to scores resulting from the full version of the scoring methodology. They will be scored privately, meaning the score will be kept private between the disclosing company and requesting customer, and not made publicly visible.
Getting a good score seems manageable, where do I start?
The first step is carbon emissions measurement - something that an aligned technology partner can power for you in a matter of hours. Once you’ve got your baseline, you can start to identify high emissions activities and build your reduction targets.
The second step is supplier engagement - starting a communications campaign that educates and activates your suppliers on the necessity of sharing their own carbon footprint and setting decarbonisation targets.
The third step is to implement governance practices that formalise your climate-related risk management such as Sustainable Travel Policies, Sustainable Procurement Policies and Environmental Policies.
Trace can help you through each of these steps, just reach out to our team to learn more.
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