As the number of companies disclosing to CDP increases to over 5,600, and interest from investors grows following global events such as the ratification of the Paris Agreement in 2016, the importance of scoring highly to stand out from the crowd is greater than ever.
CDP continues to evolve in its methodology and scoring, in an effort to promote further engagement and transparency across a range of environmental and social issues for companies, cities and regions, throughout their supply chains.
Here we attempt to distil the latest changes to the CDP Climate Change Questionnaire that will affect your business’s upcoming disclosure of 2016 data. Whilst there are no major structural changes, such as last year’s shift to letter based banding for the consecutive steps to environmental stewardship (Disclosure, Awareness, Management and Leadership), there are several subtle changes to the scoring of questions. Understanding these changes could be the differentiator to push your organisation from a Management score, up into the sought-after Leadership position.
Main changes for 2017
Minor changes have been made to the scoring for questions in numerous sections, with increased points available for some questions, and fewer points for others.
The sections affected include: Governance, Targets & Initiatives, Climate Change Risks, Climate Change Opportunities, Energy, Emissions Performance, Scope 3 Emissions and Sign Off.
In Targets & Initiatives there have been scoring updates for the questions related to Science Based Targets, where points are available for companies who set Science Based Targets. This is an area of increasing interest from companies, who are leading the way in evidence based emission reduction strategies. There is also the ability to select whether or not your Science Based Target has been approved by the Science Based Targets Initiative, which is run in collaboration with CDP and other leading climate NGOs.
There have been slight changes to the structure of some of the questions, with the addition or removal of parts of some questions.
Under the Strategy section, companies are now asked to describe how climate change is being integrated into their business strategies, and the outcomes of this process. This is not currently a scored question, but one that is of great interest to investors who wish to know how companies’ strategies are aligning with the outcomes from the ratification of the Paris Agreement in 2016.
For the Emissions Data section, there is now additional emphasis on companies to disclose whether or not they are reporting a market-based figure for their Scope 2 emissions, or a location based figure, and why this is the case. Market- based emissions relates to the emissions from the electricity that a company purchases, as opposed to the average emissions intensity from the locally generated grid electricity (location based). This is important because emissions factors can change significantly from one supplier to another, depending on the technology they use to generate and distribute electricity.
Furthermore, market-based emissions are touched upon in the Energy section, where companies are encouraged to provide the emission factors of their market-based emissions, with additional points available for doing so.
Although this year’s updates to CDP don’t contain any major structural changes or any obvious new question areas, there are several small changes to questions, structures and scores that should be reviewed prior to your submission.
As a CDP accredited partner for Climate Change Software, Greenstone is well placed to help you understand the changes to CDP and guide you through the process to maximise your score. We have over 10 years of experience in helping companies complete their CDP disclosures, across various sectors including financial, professional services, legal, manufacturing and transport.
Please get in touch to discuss how we can help your organisation with CDP and other non-financial reporting.
A full breakdown of the changes are available in this article: CDP Climate Change Questionnaire Changes 2017.