CDP – Carbon Disclosure Statement

Background

CDP supported GRI’s environmental disclosure concept in 2002, focusing on individual companies rather than nations. At the time, the CDP had only 35 investors signing the climate information request, and there were 245 companies that responded. Today, about one-fifth of global greenhouse gas emissions are reported through the CDP.

CDP works with investors, companies, cities, states and territories for a safe world.

Some companies have higher greenhouse gas emissions than individual nation states. Some leading companies have moved to become carbon neutral, but for others there is scope to reduce energy use and greenhouse gas emissions through the adoption of energy efficiency methods and business planning.

Mechanism

CDP works with more than 6,000 companies and more than 550 cities and 100 states and territories to assist them with effective carbon emissions reduction strategies. The collection of self-reported data from companies is supported by more than 800 institutional investors with approximately US$100 trillion in assets.

Most of the resulting data has never been collected before. This information helps investors, companies and regulators make conscious decisions about taking action towards a sustainable economy by measuring and understanding their environmental impact and taking steps to address and limit climate change, deforestation and water security risks.

CDP’s programs

CDP operates in most major economies worldwide and channels knowledge and progress through individual programs. These are:

  • Climate change
  • Water
  • Supply chain
  • Forests
  • Cities

The Carbon Action initiative encourages investors to accelerate carbon abatement in high-emission industries and implement emissions-reducing projects that generate a positive return on investment.

Climate Change

CDP’s climate change program aims to reduce companies’ greenhouse gas emissions and reduce the risk of climate change. CDP requests information on climate risks and low carbon opportunities from the world’s largest companies on behalf of the signatures of more than 800 institutional investors with total assets of US$100 trillion.

Water

The program motivates companies to disclose and reduce their environmental impact using the power of investors and companies.

Supply chain

In 2016, 90 organizations representing more than US$2.5 trillion in purchasing power asked their suppliers to provide information on how they approach climate and water risks and opportunities. Data was collected from more than 4,000 suppliers worldwide, reporting savings of over US$12 billion from emissions reduction activities.

Forests

CDP’s forest program has over 290 signatory investors in its network, representing a total of approximately $19 trillion in assets. The CDP collects information on four agricultural products responsible for most of the deforestation: timber, palm oil, cattle, and soy. CDP’s forests program was originally set up by the UK Government’s Department for International Development through the Global Canopy Program and the JMG Foundation.

Cities

CDP Cities provides a platform for cities to measure, manage and disclose their environmental data. More than 500 cities currently measure and disclose environmental data annually. The potential and need for this program is huge because soon more than half of the world’s population is expected to live in cities. CDP Cities provides a simple survey-based global platform that allows city governments to publicly disclose their greenhouse gas emissions data. One of the greatest values of the annual report, first published in June 2011, is for city leaders who can identify their peers to address similar risks and issues with new and innovative strategies to reduce carbon emissions and mitigate risk from climate change.

Carbon Action initiative

Carbon Action is an investor-led initiative that shows how companies in their investment portfolios are managing their carbon emissions and energy efficiency.

More than 300 investors, with $25 trillion in assets under management, are asking the world’s top emitters to take three specific measures in response to climate change:

  • Reduce emissions (year to year)
  • Announce emissions reduction targets publicly
  • Make ROI positive investments in projects

At the beginning of 2015, CDP launched a new research series with an industry-based approach.

Leadership indices

CDP recognizes companies with high-quality disclosures during its annual scoring process, and the best companies do so on CDP’s so-called A-list.

Scores are calculated according to a standardization method that measures whether and how well a company responds to each question. A company goes through four main steps, starting with the disclosure of its current position, moving towards awareness of whether a company is conscious of its environmental impact, towards management and ultimately towards leadership.

A high CDP score should be indicative of a company’s environmental awareness, advanced sustainability governance and leadership on climate change.

Organizational structure and governance

The CDP includes three separate legal entities registered in the United Kingdom, Belgium and the United States. In the UK, CDP Worldwide is a registered charity with the Charity Commission for England and Wales. CDP Europe is a charity registered in Brussels, Belgium and Berlin, Germany. CDP North America, Inc. is an independent 501(c)(3) entity headquartered in New York City. Three organizations have independent boards of trustees.

Financing

CDP’s funding comes from a mix of government and charitable donations (44.4%) and membership fees, administrative fees, sponsorships and data licensing. In Europe, CDP is funded by about 30% by the European Commission’s LIFE programme.