Four Things Your Company Needs to Know about the Carbon Disclosure Project
It’s that time of year again when thousands of companies start preparing their annual Carbon Disclosure Project (CDP) Report. In 2011, more than three thousand organizations participated, and if you are one of them (or plan to add your name to the growing roster), hereâ€™s what you need to know:
#1. Participation in the Carbon Disclosure Project (CDP) Is Voluntary (Sort of)
No company is required by law or regulation to disclose their carbon emissions or climate change strategy via a CDP Report. However, many large retailers (like Walmart) and institutions (like Bank of America) are now asking their suppliers to participate. Additionally, investors are using the data generated by CDP to evaluate climate change preparedness and commitment to disclosure. In these volatile economic times, it pays to be uber-responsive to customers and investors. So if youâ€™re hearing rumblings about CDP, youâ€™ll want to make sure you allocate enough time and manpower to crafting a good response.
#2. Prepare to Have the Information You Submit to the Carbon Disclosure Project (CDP) be Publicly Available
The fact that â€śdisclosureâ€ť is in the name of the organization should tip you off, but it bears repeating: you should be prepared to see anything that you submit in your CDP Report become publicly available. This means that typically people can download your full report, look at industry-aggregated data, or look at specific value chain impacts. Some of this access requires a paid subscription, but the key thing to know is that nothing you submit should be confidential, proprietary, or violate fair disclosure laws. (Fortunately, you can choose which questions to answer. While â€śthe more the betterâ€ť in terms of your overall score, you can skip over anything that is too sensitive for the public.)
There is an option for companies to choose to make their CDP reports “not publicly available.” If that option is selected, your information will be added to other companies’ responses and used for aggregate analysis, but your individual answers will not be available to the general public. An important caveat: if you are responding to an investor request or a supplier request (e.g. like Walmart) — your individual answers will be made available to the requesting organizations — even if you choose not to make your CDP report publicly available. So, bottom line, carefully review your answers (preferably with your General Counsel) to ensure that you are abiding by your legal disclosure requirements because there is a very good chance that once your report is out there it can be easily accessed by the public. For more information about who gets to peek at your report, check out CDP’s helpful guidance page.
#3. Carbon Disclosure Project (CDP) Is Not a Carbon Calculator
About half of the questions on the CDP Assessment are related to your organizationâ€™s carbon footprint. It asks you to enter in amounts for your Scope 1, Scope 2, and Scope 3 emissions (including the data, the sources that are included in your calculations, GHG emissions factors, and the overall GHG accounting methodology you used). The assessment, however, does NOT tell you how to go about calculating your carbon footprintâ€“you will need to undertake that project as a separate task. So if youâ€™re just getting started with this whole CDP thing, make sure to give yourself several months to get your data in order.
#4. Carbon Disclosure Project (CDP) Is More Than Just Numbers
Your carbon footprint information is just the start of whatâ€™s included in the CDP Assessment. In addition, youâ€™ll need to answer questions about the opportunities (positives) and risks (negatives) associated with climate change, including (but not limited to):
- Impact of changing weather patterns
- Geographical impacts
- Impact on products and services
- Supply chain impacts
Depending on which category you fall into (e.g. Walmart supplier, investor, etc.), your deadline may shiftâ€“most are around June-July. But one thing is for certain: if you donâ€™t have a game plan for CDP, you need to get one immediately. Donâ€™t wait until the last minute!
Clarification: This article has been amended to clarify information included in point number two.
Jennifer Woofter is the founder and president of Strategic Sustainability Consulting, a boutique firm specializing in helping rapidly growing mid-size businesses integrate sustainability into their business model. She tweets at @jenniferwoofter. If you need assistance with calculating your carbon footprint, we can help. We have a streamlined process that will get you up and running in as little as 60 days, including third party validation and review. This article was reprinted with permission from the Toronto Sustainability Speaker Series blog. The next TSSS event will be held June 20.Â Bob Willard will be coming back to TSSS for the Toronto launch of his latest book, â€śThe New Sustainability Advantage.”Â
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