Reflecting upon the 2017 CDP results and preparing for the 2018 changes

We are excited to head into the new year with new developments and improvements in the CDP scoring. The much anticipated 2018 CDP questionnaires have been released and designed in a manner which makes the questionnaires more relevant to different industries and sectors and streamlines the whole reporting process for the businesses. Apart from the CDP’s reporting portal that now enjoys a fresh new look and a redesigned interface, what key changes do the 2018 questionnaires hold for their respondents?

  1. Harmonisation across the reporting landscape
  • The CPD has continued to align the questionnaires with other reporting frameworks such as DJSi, SASB and GRI, to effectively reduce the level of effort required to report across multiple frameworks – it seems you can have too much of a good thing!
  • Many of the changes made to this year’s CDP also incorporate the recommendations put forward by the Task Force on Climate-related Financial Disclosures, with a strong focus on risks.
  1. Simplifying the reporting process
  • A tiered system approach to reporting has been introduced, whereby the first-time respondents and SMEs can choose to answer the minimum questionnaire (non-sector specific), which as you would expect, contains fewer questionnaires than the full version.
  • In each questionnaire, the improved tagging of questions will support SMEs in reporting only those aspects that are pertinent to the SME‘s operations.
  1. Sector specific questionnaires
  • Respondents falling under “high impact sector activities“ category must now answer sector-specific questionnaires grouped under: Climate change, water and forests (reflecting the CDP’s programmes).
  • Companies need to select their core industries based on revenue and will only be required to answer those questions deemed relevant for their chosen industries.
  • Companies outside of Agriculture, Energy, Materials and Transport, will respond to the general questionnaire as it was required in the previous year.
  1. Climate change questionnaire
  • With the 2017 update on Science Based Targets (SBTs) questions and the inclusion of an unscored question on the Paris Agreement, the 2018 questionnaire goes one step further.The new questionnaire requires details on scenario analysis and stress tests to assess whether companies are on a 2-degree trajectory. This will be new for many companies and should be paid close attention in the run-up to the 2018 deadline.
  • For businesses that have GHG emissions other than CO2 and typically report in tonnes CO2-equivalent, a breakdown of global scope 1 emissions by each of the 6 Kyoto greenhouse gases is requested. Companies will need to begin calculating this and incorporating it into their carbon reporting now.
  • The 2018 questionnaire also provides companies with the opportunity to report on additional “forward-looking metrics“ that may directly or indirectly impact their carbon emissions, such as land use and waste.
  1. Supply chain
  • This year’s CDP has strengthened its focus on supply chains and respondents have the option to include “additional supply chain” questions within each questionnaire.
  • The questions provide companies with the opportunity to allocate emissions to customers, include life-cycle data for their products and also disclose information on“mutually-beneficial climate-related projects“.

We also have a good reason to celebrate as many of our clients received their 2016 scores end of last year and we are delighted to share their success stories.

One of our clients within the legal sector moved up its CDP score from a ‘B’ to an almighty  ‘A-’. A CDP spokesperson announced our client’s firm as ‘the second highest scoring professional services supply chain respondent’. Alongside, one of our key clients, SThree plc has successfully maintained a ‘B’ score by integrating an effective sustainability agenda across its business which clearly demonstrates SThree’s continued commitment to sustainability.

The CDP’s reporting framework is constantly evolving, making it harder for businesses to hit those top scores. Companies are encouraged to increase the level of the disclosure year on year and greater emphasis is placed on areas including strategy, risks and targets in 2018.

We look forward to working with all our clients to respond to this year’s CDP. With the visibility of the implemented changes, we suggest that businesses start to think about their responses to the new questionnaires and plan for the upcoming reporting exercise. Carbon Smart is offering early support to help clients navigate through these changes – we conduct a gap analysis against the scoring methodologies to spot opportunities for improving performance and scoring those points which are harder to reach.