The annual CDP scores, a key metric for environmental action, have recently been released. This global disclosure and rating system allows companies, cities, states, and regions to measure, manage, and benchmark their environmental performance.
The 2024 CDP questionnaire, now integrated, saw a substantial rise in companies reporting across the three core themes of Climate Change, Water Security, and Deforestation. Additionally, disclosure on Biodiversity and Plastics is now accessible to all participating organizations. CDP aims to empower these organizations with more comprehensive data, enabling them to better understand and address the environmental risks, impacts, and opportunities within their operations, supply chains, products, services, and financial decisions.
CDP is one of the most comprehensive and internationally recognized environmental reporting platforms. Each year this organization analyzes data supplied by companies to determine if they are on the right path for reducing carbon and climate-related financial risks. CDP reporting has grown exponentially over the past decade. In 2024, 24,000+ global companies responded to CDP’s climate change, water security and forests questionnaires. In addition, some 1,100 cities, states and regions also disclosed their environmental data, targets, and strategies for all the world to see. In 2024, more than 700 financial institutions representing over $142 trillion in assets, requested thousands of companies to disclose their environmental data, risks and impacts through CDP and this trend will continue to increase as stakeholder pressure mounts.
We celebrate the noteworthy achievements of A-list companies leading their industries toward a more sustainable, Net Zero, deforestation-free and water-secure world. As ambition increases and bolder commitments are made, more companies recognize the benefits of reporting, including informing investors and purchasers, reaching decision-makers, boosting competitive advantage, benchmarking and driving progress, and managing risk.
As companies improve their CDP score over time, CDP opens up significant opportunities, enabling them to go from basic disclosure to data-driven action.
Reporting key environmental data is now mandatory in many major markets, led by Europe, the U.K., and California. Meanwhile, CDP is making compliance easier than ever before by aligning to the latest sustainability frameworks and standards throughout their questionnaire, including the Task Force on Climate-related Financial Disclosures (TCFD). CDP’s module structure and detailed questions mirror that of TCFD’s disclosure recommendations which span four pillars: Governance, Strategy, Risk Management, and Targets & Metrics, to help companies disclose material financial impacts of climate-related risks and opportunities.
In 2024, CDP expanded its alignment with the newly launched International Sustainability Standards Board (ISSB) IFRS-S2, the Taskforce on Nature-related Financial Disclosures (TNFD), and European Sustainability Reporting Standards (ESRS). By using CDP's disclosure system, organizations can streamline their reporting processes, helping with global reporting consistency, and ensuring they meet various regulatory and market demands.
One in every 10 companies now includes climate-related requirements in their supplier contracts. Companies who are not yet disclosing key environmental metrics such as Scope 1, 2, and 3 greenhouse gas emissions risk being in non-compliance with key customers. Some large companies even require that their suppliers set carbon reduction targets in order to continue doing business, underscoring the fact that global emissions reduction, like our value chain itself, are interconnected and dependent on one another’s success.
Disclosure is a vital part of your business strategy, especially in relation to your reputation. Disclosure can drive accurate data collection and analysis so you can report. By disclosing your company’s decarbonization strategy, risks, and progress toward targets, you demonstrate transparency and accountability which can lead to increased customer loyalty. Clear environmental claims backed by data can also help your company avoid greenwashing accusations, negative publicity, loss of trust, and litigation, especially in the United States.
Similarly, you can avoid activist shareholder resolutions by proactively managing your emissions, risks, and opportunities. Activist investors are increasingly raising resolutions at annual general meetings to demand better environmental practices from companies that are lagging behind their peers. These resolutions are gaining more support from institutional investors who acknowledge the mountain of climate-related financial risk that many companies are sitting upon.
Insights from climate risk assessments that consider physical and transition risks lead to more informed enterprise risk management for your organization. In fact, without identifying top-tier risks and addressing mitigation measures, your organization exposes its blind spots and signals a lack of preparedness to your investors. Scenario analysis of diverse future climates and geopolitical states can reveal strategic insights that help organizations make informed decisions about their operations, supply chains, products, and services. This can lead to better overall risk management, business resilience, and the identification of new business opportunities. CDP data shows that reporting businesses have now collectively identified almost $5 trillion in climate opportunities – more than double what was reported five years ago.
As your company discloses to CDP annually, you inevitably track your company’s progress toward decarbonization targets, annual emissions intensity, and percent of renewable energy procurement, among other important sustainability KPIs. It also allows you to benchmark yourself against your peers within your industry. Whether your company aims to be a sustainability leader or simply wants to take the next step toward ambition, knowing how you stack up against your peers is critical for maintaining a robust business strategy.
The 2020s are the critical decade for climate action, and the pressure on businesses to demonstrate their commitment to sustainability is only increasing. Navigating the evolving landscape of environmental reporting, including the complexities of CDP's integrated questionnaire and escalating scoring criteria, can be challenging. Whether your company successfully adapted to the 2024 changes or is seeking to strengthen its approach, our expert team of sustainability and climate risk advisors are Accredited Service Providers (ASP) for CDP and have a proven approach to help you rise to the challenge.
We provide comprehensive support across all environmental themes – Climate Change, Water Security, Deforestation, Biodiversity, and Plastics – ensuring your disclosures are not only accurate but also strategically positioned to maximize your score and demonstrate your commitment to a sustainable future.
Our tested methodology includes a detailed gap analysis with question-level response suggestions and scoring implications, empowering you to prioritize actions and achieve the next level of ambition. We go beyond simply filling out a questionnaire; we help you develop a robust sustainability strategy. After each engagement, you'll receive a prioritized list of opportunities to present to your executive leadership and internal teams, enabling you to drive critical improvements in the coming year.
The urgency of climate action demands a proactive and strategic approach to environmental disclosure. We encourage you to explore how a robust CDP strategy can future-proof your business strategy and contribute to a more sustainable future.
Let's work together to decarbonize your organization.
