CDP (formerly Carbon Disclosure Project) is the gold standard for corporate environmental reporting, which aims to “focus investors, companies, cities, and governments on building a sustainable economy by measuring and acting on their environmental impact.”
By responding to its questionnaires, companies, cities, states, and regions are able to measure and manage their risks and opportunities on Climate Change, Water Security, and Deforestation (Forests).
The number of responders has risen sharply since 2020, with more than 23,000 companies, including listed companies worth two-thirds of global market capitalisation, disclosing data through the CDP in 2023.
What are the 2024 Updates?
The disclosure platform is receiving a major update to reflect the increasing importance placed on simultaneously and equitably addressing Nature and Climate Change, and to streamline the disclosure process.
Previously three separate questionnaires, Climate Change, Water Security, and Forests are now integrated into a single questionnaire, but will still receive separate scores. This integrated format will enable stakeholders to better assess all environmental impacts across the value chain and address the interconnectivity between different issues including Biodiversity, Plastics, and Land Use. It removes the duplication of consistent themes such as Governance and Business Strategy across the different environmental issues. Organisations will see questions on all the themes in a single place, that they have been requested to report on, or deemed material due to their sector classification.
The new CDP Portal technology should provide a more intuitive workflow through:
· improved stability of the platform
· greater self-service functionalities
· facilitating disclosers to work collaboratively with colleagues.
In addition, the CDP questionnaires evolve annually to reflect the progress in environmental reporting and standards, and to push corporate ambition further. Therefore, the scoring methodology and requirements are moved higher each year, and organisations must progress annually to maintain the same letter grade.
As the CDP explains: “This will change the format of the questionnaire, but ultimately what we are requesting from companies and the actions we are seeking to drive will not fundamentally change in 2024”
Alignment with Reporting Standards and Frameworks
In 2024, to ensure it is collecting actionable data, the CDP is also strengthening its alignment with ESG reporting standards and frameworks. The aim is to reduce the reporting burden on companies and ensure disclosures deliver consistent and comparable data to capital markets, procurement teams, and policymakers.
IFRS S2 Climate-related Disclosures: the 2024 questionnaire will be aligned with the IFRS S2 standard issued by the ISSB. IFRS S2 incorporates and builds on the TCFD, which CDP is already fully aligned to, as the guidance in terms of Governance, Strategy, Risk and Opportunity Management, and Metrics and Targets.
Task Force on Nature-related Financial Disclosures (TNFD): the questionnaire is currently partially aligned. Parallels to the TCFD allow current partial alignment and provide the CDP with a running start as certain parts of the questionnaire can be adapted to reflect aspects of the TNFD framework.
European Financial Reporting Advisory Group (EFRAG): alignment with ESRS is under review. Under the EU Corporate Sustainability Reporting Directive (CSRD) the ESRS will be legally binding and will require all large and listed companies to disclose on ESG risks and opportunities, and the impact of its activities.
Securities and Exchange Commission (SEC): alignment with the proposed climate disclosure rule is under review. The rule would require companies to disclose the extent of the board's role in overseeing climate-related risks and opportunities.
2024 Timeline for Corporates
CEN-ESG can provide an end-to-end solution for CDP
Has your company been requested to respond via a supplier, customer, or investor?
Have you considered responding but are put off by the complexities of the questionnaires and relevant methodologies?
Has your CDP score stagnated or fallen, not reflecting your company’s sustainability progress?
At CEN-ESG, we understand that CDP submissions can be challenging and time-consuming, and offer several services to assist clients across the CDP cycle.
In 2023, CEN-ESG assisted clients with 12 Climate Change and 2 Water Security submissions. Of the 11 submissions that weren’t first-time responders, 64% saw an increase in letter grade, with no scores falling. This included a significant upgrade from a D to a B for one client.
CEN-ESG offers full lifecycle support with CDP, taking full control or working collaboratively with in-house ESG teams. At the core of our offering is a proprietary tool used to assess and analyse CDP 2023 responses. It allows us to identify material gaps in your latest submission that limit your score, and provide specific recommendations for improvement for next year's submission. Throughout this process, we highlight any areas of potential appeal and support with the appeal process. The deadline to appeal this year is 19 March.
In addition, we offer holistic submission support from the collection of data to populating the questionnaire in line with CDP 2024 Scoring Methodology. This includes assistance in the implementation of the recommendations identified from CDP 2023. We then provide post-results management, highlighting progress made, identifying a list of actions for the following year, and support in the appeal process.
CEN-ESG also provides support on aspects contained within the questionnaires such as:
· Target Setting (including SBTi Validation)
· Carbon Footprinting
· Identification and Quantification of risks and opportunities
· Governance Structures (TCFD)
Client Testimonials
Coats Group plc
CEN-ESG supported Coats on the Climate Change and Water Security CDP 2023 submissions. Coats are very pleased with the progress made in both responses, and were delighted to receive an uplift to a B in Climate Change.
Their proprietary scoring tool, generated estimated scores & question specific feedback and recommendations. Communication between our in-house environmental team and CEN-ESG was clear and efficient with fast responses to any queries.
CEN-ESG delivered a thorough post-result service including year-on-year progress, and identifying actions for 2024 to further improve our environmental disclosures and performance. We have a much better understanding of the CDP scoring and rating process thanks to the analytical capabilities of the proprietary tool and support offered by CEN-ESG.
Tritax Group (Tritax Big Box REIT plc and Tritax EuroBox plc)
CEN-ESG supported Tritax in the filing of the Big Box and Euro Box Climate Change questionnaires. Both companies received a creditable B score in 2023, with Eurobox achieving this on its inaugural submission.
The CEN-ESG tool with its question specific disclosure and scoring focus has enabled us to ensure the progress we have made on sustainability during the year has been fully reflected in our CDP scores.
CEN-ESG provided assistance across the whole CDP cycle from data collection and processing, to specific feedback and recommendations off the back of their proprietary scoring tool, which has greatly enhanced our understanding of the CDP process.
Contact us
CEN-ESG helps businesses maximise their sustainability potential, performance and ESG disclosure.
For more information about our solutions for CDP, please contact us via email and our team would be more than happy to help.
Jasper Crone, Director
Roger Johnston, Director
For more information about our Sustainability Consultancy, Investor Relations, or CEN Data services and expertise, please click on Services above or go to https://www.cengroupholdings.com.
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