One thing trust and sustainability professions have in common is a lot of acronyms! SASB, GRI, GHG, ESG, GDPR, COPPA, PII, DSAR, to name just a few. Do you know all of them? If not, never fear – this blog series has got you covered. With this post, we are kicking off a Trust Geek Glossary series that will explore common trust acronyms, what they mean, and key considerations for your business. The first part of this series will be looking at some common sustainability reporting frameworks, starting with the Carbon Disclosure Project (CDP). Read on to learn more (and find the answer key at the bottom)!
CDP reporting: What is it?
Founded in 2000, CDP, formerly the Carbon Disclosure Project, is an investor-led nonprofit focused on motivating companies, cities, and governments to disclose their environmental impacts and take action to reduce them. As a globally recognized reporting framework, it does this through annual questionnaires that organizations use to disclose sustainability information to their stakeholders through the CDP Online Response System (ORS). CDP also uses the data supplied to score organizations and measure progress and drive action on the following key areas:
- Climate change: How effectively are organizations managing climate risks, carbon emissions, and low carbon opportunities?
- Forests: How are organizations verifying and monitoring commitments for using forest commodities? Are forest issues an integral part of business strategy? What is the exposure and risk associated with deforestation in production and/or procurement
- Water security: How are water-related issues and risks managed, including governance, use, and stewardship of water resources?
- Supply chain: For companies that are part of the supply chain of other companies, how are climate risks, carbon emissions, and low carbon opportunities managed?
Download the infographic for a side-by-side comparison of three major ESG reporting frameworks.
How does CDP disclosure work?
Companies are typically asked to disclose through CDP by their customers or investors, but they can also voluntarily submit responses through a self-selected company registration. The questionnaires are the same for all companies with the following exceptions:
- Companies responding to requests from customers will receive additional questions from the supply chain module.
- Companies in high-impact sectors will receive additional questions.
After collecting the environmental data needed, companies respond to the questionnaire through CDP’s online reporting platform. The reporting period runs from April – July each year, and CDP provides guidance and workshops throughout the year to help organizations through the process. The annual reporting cycle typically follows this timeline:
- 2nd week of January: CDP releases guidance for the current year’s questionnaire.
- 2nd week of April: the ORS is open for data input.
- Late July: Companies must submit their response to investors and/or customers via the ORS to be eligible for scoring and inclusion in reports. For 2022, the deadline is July 27.
CDP reporting framework infographic
The following infographic provides a quick overview of the CDP reporting framework:
- Founded: 2000
- Number of companies reporting: Over 13,000
- Typical audience: Investors and customers who are requesting disclosure.
- Purpose: Motivate governments and companies to disclose their environmental impacts and take action to reduce them.
- Focus: External environmental impacts for requesting stakeholders.
- What is reported: The E and G pillars. Environmental disclosures related to climate change, water security, forests and supply chain.
- Who reports: Cities and companies responding to investor or customer request; voluntary submission.
- Industry-specific versions: High impact industries have additional reporting requirements.
- Output used for: Response to investor or customer inquiry, CDP public scoring (optional).
