February 28, 2024

Reporting

Carbon Disclosure Project (CDP) Reporting: Facts to Get You Started  

Carbon Disclosure Project (CDP) Reporting: Facts to Get You Started  
Contents

What is CDP?

CDP stands for the Carbon Disclosure Project and they are a not-for-profit charity that is in charge of the global reporting disclosure for investors, companies, and regions to measure and publicly acknowledge their environmental impacts. CDP is internationally considered to be the “gold standard of environmental reporting” and their data is widely used to take environmental action and track progress around the world. 

A few things to know about CDP reporting:

  • CDP began their journey building off the Global Reporting Initiative’s (GRI) framework in 2000, with the first submission happening in 2002. 
  • There are 3 aspects of CDP reporting: climate change, water management, and deforestation. 
  • In 2021, 64% of global capitalization disclosed their data through CDP, which was over 13,000 entities, including companies, cities, and states and regions.

Learn more about CDP reporting, what CDP scores indicate, and how you can utilize Net0 as a necessary tool for your submission.

Is CDP TCFD-aligned?

The CDP has based their questionnaires off the 4 pillars of the TCFD since 2018. This thorough environmental data has helped various entities across the world with planning and decision-making since then.

How does CDP reporting work?

In 2024, the CDP platform is open to report in April and the response window will be from early June 2024 to September 2024. When a company, investor, or government entity wants to disclose their reports, they may sign up for an account with the CDP, activate their questionnaires, and submit any necessary responses. 

CDP reporting requires qualitative and quantitative data. Entering precise data that was calculated with ESG software to measure and track progress over time is a key factor in getting an A CDP score. It brings clarity to the reporting body as well. We’ll cover more on how to go about data collection below.

Finally, CDP will then give scores based on what data and responses were given. 

What is a CDP score?

  • This is the score given on a scale from D- to A that assesses the environmental performance of the reporting entity. 
  • There is a score given for climate change, water management, deforestation, and an overall score. 
  • Investors take these ESG ratings into account for making valuable and verifiable decisions. 

What are the CDP scores?

Disclosure (D-/D score) - A D CDP score means a company is at the beginning of their environmental journey and has disclosed their report. A D would be more detailed disclosures than a D-.

Awareness (C-/C score) - This CDP score measures the level of awareness in the entity’s response based on how comprehensive their evaluation of environmental issues was and how the business’ operations affect people and ecosystems.

Management (B-/B score) - A B CDP score shows that an entity has recognized and is managing their environmental impacts in a positive way.

Leadership (A-/A score) - This CDP score reflects leaders in their field with regards to climate-related issues and setting and achieving science-based targets, maintaining water-related risk strategies, and mitigating deforestation impact.

Failure to disclose (F score) - The entity didn’t submit their CDP reporting that year.

Another reason to use ESG software is that when making progress on environmental performance promises, verifiable reports that are government-aligned will show that progress, guaranteeing you get on the A list of CDP.

Is CDP reporting obligatory?

CDP reporting isn’t mandatory although it is internationally one of the most important frameworks for reporting emissions. What is now mandatory are the SEC Climate Disclosure in the U.S. and the Corporate Sustainability Reporting Directive (CSRD) in Europe. However, not every company is obliged to submit reports thus far. It is important however for companies to do so because now that the tools are available for reporting where there was formerly a large gap in the demand, it is fulfilled. This means there is little excuse for the consumer to buy a product that is not competitive on the Green market and a company that isn’t upholding sustainability standards when it could be. Furthermore, ESG is the new focus of investors and the Sustainable Financial Disclosure Regulation (SFDR) is now requiring investors to prioritize climate-related metrics when making investment decisions. 

CDP and carbon emissions

CDP believes in managing carbon emissions by using quantifiable data and monitoring it consistently over time. Climate change mitigation is a multi-faceted process and one of the main elements to such a feat is relying on AI carbon emissions management tools to empower humans to pinpoint those risks and find alternative solutions. CDP also offers many resources and information on the demanding issue of carbon reduction amongst other environmental performance topics. 

Hence, the CDP reporting framework identifies carbon emissions data as essential in combating climate change, serving as the foundation for benchmarking and establishing targets to achieve tangible outcomes. 

Climate-related data can be entered into the Net0 emissions management software, where the carbon tonnage derived from a business's emissions data is converted into a measurable metric, guaranteeing precise reporting. Net0 stands out as the fastest and most accurate AI-driven carbon management tool for data collection. Its methodology of continuous measurement against benchmarks and targets showcases your accomplishments to investors, fostering enhanced carbon management. This approach not only aids in carbon reduction strategies but also ensures accurate reporting to get to the A list of CDP.

How Net0 can help with CDP reporting

Net0 excels past traditional carbon calculation methods, providing an AI-enhanced GHG emissions management platform leveraged by businesses and governments to make viable action plans on their carbon mitigation strategies. With a growing consumer demand for environmentally friendly products and services, alongside investor demands for accurate data and long-term climate details on ESG progress, emissions reporting has become an essential, non-negotiable aspect of operating within the climate-conscious economy worldwide.

Utilizing automation, Net0 captures raw data and converts it into quantifiable emissions data across all 3 scopes, resulting in precise tracking so reports are efficiently finalized in real-time. Its rapid analysis, incorporating over 50,000 emissions factors, empowers organizations to formulate and implement targeted strategies to reduce carbon emissions. This results in verifiable, audited, and trusted reporting that meets the standards demanded by the CDP as well as investors. Net0's reporting aligns with all major regulatory frameworks worldwide, including the GHG Protocol, the SECR, the SEC Climate Disclosure, the CSRD, and more, ensuring credibility and reliability for your carbon management reporting.

Key points to remember

  • ESG reporting is necessary for investors and other stakeholders to participate in the climate-first economy.
  • Around the world, governments are phasing in entities every year to make ESG reporting mandatory.
  • Being responsible for your carbon emissions and other environmental data is now preferred by stakeholders and able to do with ESG reporting software.

Book a call with Net0 and discover how we can help manage your GHG emissions over time so you can set targets, make viable climate-actions plans, and report on them with accuracy and consistency in the long run.

Written by:

Kristin Irish

As a content writer for Net0, Kristin harnesses her expertise and enthusiasm for carbon emissions reduction, merging it with her other passion: the B2B SaaS industry. Her global outlook and dedication enrich the sustainability sector with insightful perspectives.
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