As an organization that’s focused on taking action to help build a sustainable economy, you’re already familiar with the process of measuring and understanding your environmental impact, setting targets for improvement and reporting your progress annually.
Now, however, to keep up with global environmental leaders you also need to feature in the major sustainability indexes, especially those whose primary audience is investors, such as CDP (formerly the Carbon Disclosure Project).
What is a CDP score?
CDP runs a global disclosure system based on self-reported environmental data in three program areas: Climate Change, Water Management and Deforestation.
CDP ascribes an alphanumeric score to companies based on their performance against a given set of criteria, with the total scores then grouped into six bands: A (highest), A-, B, C, D and E (lowest).
The climate performance scoring methodology awards points for companies who are undertaking, or have undertaken, positive climate change actions that contribute to climate change mitigation, adaptation and transparency, based on the company’s response to CDP’s annual climate change questionnaire.
Why is your CDP score important?
Aside from the score itself, participating in CDP can provide a framework for organizations to implement strategic change and drive performance, utilizing CDP’s analytics tool to simplify benchmarking and trend analysis.
But the key benefit of a CDP score is the level of transparency and accountability you demonstrate to customers, investors and stakeholders.
CDP data, scores and rankings are available through Bloomberg terminals, which receive around 718 million data hits each month, and 827 investors – representing US $100tn – are now requesting data from companies through CDP’s climate change program. With this level of visibility, it’s important to score as highly as possible.
How is your CDP score calculated?
Organizations are scored on both the comprehensiveness of their disclosure and aspects of their company’s performance in relation to climate change.
The CDP questionnaire is extensive, covering 86 indicators at the last count, and the award of an ‘A band’ is likely to be restricted to respondents that have a fully integrated climate change strategy driving significant reductions in emissions.
Put simply, CDP encourages companies to develop transparency, accountability, measurement and management of their environmental impacts, so here are the key steps to achieving a great score:
- Integrate climate action into your business strategy
- Establish board- level and management responsibility for climate-related issues
- Implement a process to identify, assess and manage climate-related risks and opportunities
- Analyze the impacts of climate-related issues on strategy, financial planning and business
- Measurement and management
- Set science-based absolute reduction or emissions intensity targets, plus other climate-related targets such as energy usage, renewable energy production or procurement, and waste
- Plan, implement and monitor initiatives to achieve targets
- Collect data and report on Scope 1, 2 and 3 emissions
- Report all climate-related data and relevant business information in full
- Ensure emissions data is fully verified to recognized standards
- Account for variations in emissions with clear narrative – reductions must be due to your climate initiatives, not to economic, environmental or other factors beyond your control
How can progressive offsets help you improve your CDP score?
If you’re already scoring very highly in the CDP climate rankings, how can you improve still further? Carbon offsets could be the answer.
The CDP questionnaire allows respondents to report purchases of project-based carbon credits in each reporting period, and allocates points to those who do so.
The more information your organization provides, the more highly it will score, so be sure to include full details about the project(s) type, verification standard and number of credits bought and/or retired to maximize your score.
When you invest in NativeEnergy carbon offsets, you’ll get all the information and assistance you need to complete your CDP questionnaire, giving you the opportunity to gain extra CDP points and step up into the A grade.