CDP is one of the largest internationally recognised climate and sustainability reporting frameworks. During our webinar a few weeks ago, we received many questions about the 2020 disclosure cycle. In this post we aim to answer them to help you to prepare.
Why report to CDP?
1. What is the benefit of voluntary CDP disclosure?
Broadly speaking, the benefits of disclosing to CDP are twofold:
- It supports your communications to your stakeholders (particularly investors), beyond mandatory emissions disclosures. It will help you to satisfy the increasing demand for transparency and action on climate and sustainability. This could help you to gain competitive advantage and secure investment.
- It provides a roadmap on how to act and report on climate change, water and forests. According to science we need to halt what is an unprecedented ecological crisis and achieve Net Zero global emissions no later than 2050 in order to avoid the most catastrophic impacts of climate change. The CDP framework provides a guide to the key tasks needed for a business to undertake this challenge and protect itself from the risks of a changing climate. In turn, it will ready you for any future mandatory reporting requirements and drive forward progress across sectors towards a more sustainable and zero-carbon world.
CDP FAQs on timeline, guidance and scoring information
CDP follows a regular pattern for submissions, scoring and the release of updated guidance, but the dates do vary every year. In 2020 there have been some updates, mainly in the form of new sector-specific questionnaires for Finance, Construction & Real Estate, and Capital Goods (find a full summary here).
2. When are the 2020 Questionnaires and scoring methodology scheduled to be released?
The Questionnaires are already final and publicly available on the CDP website, both the sector and general ones. Similarly, the guidance documents are ready and online.
Methodologies for water, forests and climate will be released in early April. Please refer to CDP’s Disclosure 2020 page for a full view on the timeline and any potential updates to this.
The online response system for submissions opens week commencing 13th April 2020.
3. Does CDP anticipate delays/changes in the disclosure cycle timeline due to COVID-19?
CDP have informed us that in light of the Covid-19 (Coronavirus) pandemic, CDP is aware that companies and organisations around the world are facing serious impacts to their staff and business operations, and for some this could impact their 2020 CDP disclosure.
In response to this global health crisis, CDP has already decided to move the 30+ 2020 disclosure workshops online this year, to help protect public health.
CDP are monitoring the rapidly evolving situation and are currently assessing the potential impact on our disclosure cycle. CDP will be in touch with stakeholders to provide any updates as they occur.
4. Where do I find my full score breakdown and are there any plans to provide question-by-question feedback?
In the Response Dashboard of your online CDP account, you should have a section called ‘My Files’. In here, you will find a file called ‘Score Report’. This is your personalised scoring report. It shows how your organisation performed across the four CDP scoring levels: Disclosure, Awareness, Management and Leadership.
There are no plans at present to provide question-level feedback. However, questions are grouped into weighted categories which can be viewed in the “scoring categories and weighting documents” for Climate Change, Forests and Water Security. This will help you to further understand your score.
5. How is my company classified by CDP and what do I do if I do not agree with the classification?
Companies requested to respond are allocated a classification under the CDP-Activity Classification System (CDP-ACS). This system categorises companies by the diverse activities that they derive revenue from and associates these activities with the impacts across a company’s value chain from climate change, water security and deforestation.
The CDP Activities are mapped to the questionnaires. A company must earn at least 20% of its revenue in an Activity to be mapped against it. If no sector questionnaire exists, the company will only be required to respond to the general questions.
CDP-ACS is a three-tiered system comprised of (from bottom-up) Activity, Activity Group and Industry. See the full list of CDP-ACS.
If you wish to change or question your categorisation, there is a process for this. Please get in touch with your point of contact in CDP, or email the generic disclosure inbox: [email protected]
CDP FAQs on scoring enhancement
CDP submissions are scored from D- to A. The A-List is now seen as the gold standard for disclosure on sustainability ambitious and progress.
6. As a first-time responder, is it possible to get a score with a minimal disclosure? Can we disclose just our emissions?
There is an option to keep your response and score private for the first year. This does mean you are then committed to responding and disclosing the score in future years (the response itself can remain private). If only minimal disclosure takes place you would likely score only for disclosure (0-44% which equates to a D-).
If you are apprehensive about your first disclosure, we would suggest undertaking a gap analysis. This would identify where you are, quick wins that could improve your score this year and provide you with a clearer roadmap for improvement into future years.
7. When a company decides to disclose with CDP, do most companies use consultants to help them with the process?
As there are many thousands of companies that respond to CDP. We do not have visibility on any statistics, but the reasons why companies use consultancies include:
- Not having the expertise in house
- Not having enough resource internally to dedicate to the process
- They need support on specific areas of the questionnaire
- They want a partner with detailed knowledge of the scoring and requirements in order to maximise scores in current year
- They wish to improve scores but are not sure where to start or what the priority areas should be.
- It would be of benefit to them to gain an understanding of best practice and knowledge of what others in their peer group/other sectors are doing.
8. My company has received a C for a few years. Would publicly disclosing increase our score?
If you are including the same information publicly then you would not score more points. If there are questions that you haven’t been answering in full, it could be that there is a potential to gain more points. However, at a C score you will need to be improving your awareness points.
We would advise that you target the criteria for the awareness questions. Check that you are answering these questions in full and ascertain what actions you need to take in these areas to improve.
9. How long would it take to go from a D- to an A?
This isn’t something that can happen overnight unfortunately and in fact probably not something that is possible within one reporting cycle. It is certainly possible that a company can start from the bottom and work their way up. You would probably be looking at around 2-3 years realistically.
It requires a couple of years of acting, reporting and reviewing performance against the criteria to ensure that your actions are focused on the right areas. There is a high level of ambition associated with an A-List score including setting ambitious targets and implementing change and governance structures within your organisation. It should be viewed as a journey which starts with some of the easier actions which enable you to build confidence and see the benefits and returns from your efforts in order to drive forward with the more challenging aspects.
10. How do I plan for progress when the questions and methodologies are changed annually?
We would recommend that a gap analysis should be conducted each year to analyse your progress and planning against the latest methodology.
If you are going for the more ambitious initiatives like setting science-based targets or tackling governance, it is unlikely that these measures will be redundant in the coming years. While CDP will continue to review the measure of best practice it is not every year that the questions undergo major changes and if you are tackling these ambitious actions, you will be in a good position to deal with future evolutions of the framework.
11. Is it compulsory to have an SBT approved target to be A-List?
The short answer is no it is not compulsory.
The longer answer is that CDP has two criteria when assessing this. If you have a validated SBT it is very easy to get the points. If you do not, then what they look for is two separate targets: a medium-term target (5-15 years), and long-term target (15+ years). Plus, there are criteria to fulfil in terms of what that target covers and for Leadership in target setting it must be an absolute, not intensity, target. You could achieve Leadership without a target, but you would need to get all the other points available.
So, it is possible, but perhaps a little more complicated to gain those points without an approved SBT.
12. How much room for improvement is there once you’re in the A-list?
It is unlikely that an organisation will exhaust all the possibilities for improvement. Bear in mind that the bar for best practice is continually evolving.
Another thing to bear in mind is that in the A-List you are now considered a leader and can help to drive forward best practice within your sector. There is an opportunity to explore new areas of best practice and demonstrate this leadership position to your stakeholders.
If you have any other questions about CDP or would like support with your future submissions, please do contact us.