CDP – Looking ahead to 2016
With more than 4,500 companies now disclosing information to CDP, and investor interest increasing, reputational benefits from a good score means that the business case for reporting to CDP is stronger than ever.
This year’s report included the 2015 A-list which saw 113 companies making the top grade for their actions to combat climate change. This is the performance half of the CDP score, and marks the level of action taken by respondents to measure, verify and manage their carbon footprint. CDP respondents are also given a disclosure score (out of 100) which assesses the quality and completeness of a company’s response.
The 2015 report also included the FTSE 350 Climate Disclosure Leadership Index (CDLI). The index highlights a select number of companies who demonstrate considerable improvement in climate management and disclosure in the past five years. Congratulations to Greenstone’s client Henderson Global Investors who has made the CDLI list for the second consecutive year.
What’s new for 2016?
The most significant change to the 2016 disclosure is the way in which scoring is done. Scoring will now be based purely on letter banding, with the removal and incorporation of the numerical score into the letter band from A to D-. Failure to disclose any information at all is scored as an F.
Banding relates to the four areas of Leadership, Awareness, Management and Disclosure.
- The Disclosure band (D, D-) measures the completeness of the company’s response
- The Awareness band (C,C-) measures the extent to which the company has taken action to understand its environmental impacts and risks
- The Management band (B, B-) measures the extent to which a company (given an awareness of their environmental impacts and risk) has implemented actions or strategies to address them
- The Leadership band (A, A-) measures environmental leadership in a company’s particular sector
The aim of the revised scoring system is to make CDP scoring easier to understand and benchmark against for companies, investors and stakeholders.
Other changes to the 2016 questionnaire include moderate changes to questions in the Targets and Initiative, Energy, and Emissions sections. This includes the requirement to specify whether targets are science-based, and an integration of renewable energy targets into target setting itself.
There are also changes around Scope 2 emissions reporting with the 2016 disclosure including the ability to report both location and market-based emissions. For more information on Scope 2 emissions reporting, watch Greenstone’s Scope 2 Reporting webinar.
CDP is also introducing an annual administration fee for certain regions. From 2016, the fee will apply to companies listed, incorporated or headquartered in Austria, Benelux, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Norway, Portugal, Spain, Sweden, Switzerland, the UK or the USA. This is to cover the cost of providing disclosure and communicating the benefits of reporting to CDP.
CDP recently accredited Greenstone as an official Climate Change Software partner as part of its partnership programme. Although Greenstone’s team has been supporting clients through the CDP reporting process for the last 7 years, this partnership was important to formalise Greenstone’s support for CDP and the reporting organisations striving to improve their non-financial reporting.