How to Improve CDP Scores
Companies can improve their 2013 Carbon Disclosure Project scores by reporting and verifying all categories of scope 3 emissions, and responding to the new supply chain questions, among other measures, according to WSP.
The environmental and sustainability consulting firm has updated its white paper, Making the Most of the Carbon Disclosure Project, to coincide with the recent release of the Carbon Disclosure Project (CDP) 2013 Investor Information Request and scoring methodology.
Previously published in 2010, WSP’s updated white paper provides suggestions to help companies respond to CDP’s annual questionnaire. In the new version, WSP, a US consultancy partner to CDP, also discusses how CDP is raising the bar and provides recommendations for an improved CDP response.
For example, in the 2013 questionnaire, CDP has expanded scope 3 emissions reporting. In the past, companies could report on one or some scope 3 GHG emissions categories and skip other categories. This year, CDP has modified the scope 3 question to require responses for all 15 scope 3 categories defined by the Greenhouse Gas Protocol.
Companies need to report emissions for each category or explain why they are not providing data. CDP gives significant disclosure points for this question, which should encourage companies to develop complete scope 3 inventories, WSP says.
Verifying scope 1 and scope 2 emissions is a prerequisite for inclusion in the CDP’s Carbon Disclosure Leadership Index.
Companies can also improve their CDP disclosure score by identifying climate-related risks beyond a 10-year timeframe, and providing examples of how they manage these risks. Additionally, companies can earn more disclosure points by providing a direct link between emissions reductions and specific emissions reductions activities, the white paper says.
The paper’s recommendations are based on WSP’s work with numerous clients in support of their CDP responses. WSP says its clients performed well on CDP’s 2012 Global 500 and S&P 500 reports. The average disclosure score of WSP’s 2012 CDP clients was 89, while the average score for the S&P 500 was 70 (see chart).
WSP says it has provided greenhouse gas management support to eight of the 15 companies named to CDP’s S&P 500 Carbon Performance Leadership Index, and works with two out of only three companies listed on all four S&P 500 and Global 500 leadership indices. WSP’s Investor CDP clients have included Bank of America Merrill Lynch, Gap, Wells Fargo and others.
Bayer and Nestle — both with perfect 100 disclosure scores and A performance ratings — top the 2012 Global 500 list. Pepco Holdings, NYSE Euronext and Wells Fargo top the CDP’s 2012 carbon performance and disclosure ratings for the S&P 500.
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