For the 2018 reporting season, CDP has made significant changes to their questionnaires and requirements for reporting. Many companies are therefore being faced with new challenges. Learn more in our report about the background to the new reporting guidelines, and how First Climate can help you to improve your scoring, even under the new conditions.
As of this year, CDP offers three disclosure programs under the categories of ‘Climate Change’, ‘Forests’ and ‘Water Security’ with which the corresponding environmental impacts of companies are measured. What is also new is that sector-specific questionnaires are now available within these three programs for the participating companies.
Program and sector-specific disclosure
The sectors include the Agriculture, Energy, Materials and Transport sectors. Companies will be assigned to a program and a sector by CDP and will then automatically get the appropriate questionnaires for disclosure. Further refinement of the system with more sector-specific differentiations is planned for the upcoming years. CDP’s aim is to countinuously increase the quality and comparability of the compiled data, and to enable investors to create a more accurate picture of the environmental opportunities and risks faced by reporting companies.
Changes have also been made to the well-known ‘Climate Change Questionnaire’ – aligning to the recommendations of the TCFD.
Companies which cannot be clearly assigned to a sector by CDP will receive a general questionnaire which has also been revised in comparison to previous years and has been supplemented and restructured, particularly within the area of ‘Climate Change’. For example, many of the new questions that have been included now meet the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). Among other things, questions include whether climate management is considered in decisions made within a company, at which management level these decisions are made, and how the decision-making takes place among the responsible committee.
Internal carbon pricing is also increasingly being taken into account and is intended to help companies to prepare for the taxation of carbon emissions, which is planned for more and more countries, if not already partially implemented. The key reason for CDP’s decision to do this is to initiate within companies the internal process of identifying climate-related opportunities and risks, and determining possible impacts of some business activities. This should enable investors and financial service providers to recognize and evaluate decarbonization trends within their investment portfolios.
Incentivizing contemporary carbon and climate change mitigation management
All in all, achieving positive scoring results within the CDP Climate Change Questionnaire is increasingly tied to the implementation of a contemporary carbon and climate change mitigation management within the companies. Since 2016, for instance, CDP grants awareness and leadership points to incentivize companies to set themselves science-based targets. These targets enable companies to align themselves with the 2°C target set in the Paris Agreement. To be successfully recognized as a science-based emission reduction target, which can help to improve your CDP score, the target requires a detailed screening of scope 3 emissions, based on the guidelines of the GHG Protocol. This screening usually requires an analysis of the upstream and downstream climate risks within your supply chain.
“The current and upcoming additions to the CDP questionnaires and scoring structures pose new challenges for managing and collecting environmental data within companies,” explains Janosch Birkert, consultant at First Climate who is closely watching the current developments. Birkert reckons, however, that these changes have created multiple new starting points for companies to sustainably improve their scoring through optimized reporting. “As a Silver Renewable Energy Partner to the CDP, we support our clients to maintain their 2°C-compatible emission targets and to continually optimize their CDP scores, using services such as individual Scope 3 screening, or tailor-made renewable energy sourcing strategies.”
For questions and individual advice on CDP reporting, please contact the First Climate team via telephone at +49 6101 55658 0 or via email at firstname.lastname@example.org.
In co-operation with the CDP, First Climate will be offering another free webinar on this topic within the second half of 2018, providing information on the opportunities for reducing your scope 2 emissions. The exact date and details to register for this will be made available in advance on the CDP and First Climate websites.