CDP 2024 Updates: Key changes for your business to know
Context
CDP, the global standard for corporations and governments to disclose their environmental impacts, recently announced changes to their reporting guidelines, scoring methodology, and submission portal. Driving these changes is CDP’s ambition for companies and financial markets to transition in line with a 1.5°C, nature-positive world.
A Centralised Questionnaire
CDP is combining its three existing questionnaires (‘Climate Change’, ‘Forests’, and ‘Water Security’) into one Corporate Questionnaire, so that companies can report against multiple environmental issues in a single form. This integration allows for more holistic disclosure and is aligned with the latest science and reporting frameworks and standards, such as IFRS S2, EFRAG, TNFD, and SEC.
In addition to this centralisation, new data points have been added to encourage companies to consider the interconnectivity of environmental impacts across their direct operational activity, supply chain, and financial decisions. The 2024 questionnaire changes its focus from ‘risks and opportunities’ to an assessment of ‘environmental impacts and dependencies’. To address this, disclosers are expected to demonstrate visibility and knowledge of the entities they have control over across their value chain.
There is a greater emphasis on biodiversity; for the first time, all corporate disclosers (except small and medium enterprises (SMEs) and public authorities) will be presented basic biodiversity data points. Similarly, the ‘Forests’ section now focuses on natural ecosystems, not just forests and deforestation.
Although the format of the questionnaire is changing, the information requested from companies remains fundamentally the same. CDP will still ask for theme-specific data points within the integrated dataset, and questions that are only relevant to one environmental issue will be kept separate.
For financial services companies, the reporting process is now increasingly aligned with the Partnership for Carbon Accounting Financials (PCAF) and the Glasgow Financial Alliance for Net Zero (GFANZ).
SME Disclosure
New this year is a dedicated questionnaire for SMEs. This streamlined and simplified questionnaire is tailored for smaller organisations, with fewer questions and data points to ease the reporting burden. In 2024, the SME questionnaire will focus on climate change and will not include sector-specific questions.
An eligibility threshold will be set to meet SMEs at their current maturity level. Regardless of level, the questionnaire will incentivise SMEs to disclose and start taking action towards their climate goals.
This replaces the existing minimum questionnaire and the pilot Private Markets CDP SME questionnaire.
The CDP Portal
CDP is introducing a new portal intended to be more streamlined and user-friendly. Disclosers will be able to track progress through their entire disclosure process and enjoy improved tools for data validation and a more intuitive design.
Scoring
In general, the scoring methodology will not change significantly in 2024. Despite submitting an integrated questionnaire, companies will continue to be scored separately on ‘climate change’, ‘forests’, and ‘water security’. Plastics and biodiversity questions will not be scored this year, and scores will continue to be based on primary sector assignment.
Looking Ahead
In the coming years, CDP expects to expand its plastic-related metrics to capture the full value chain of a company’s activities. To motivate ambitious environmental action, CDP will more clearly define criteria that is essential for a company to earn a particular score. These criteria are already well established for the CDP A List, and more details will be announced soon for other scores.
2024 timeline:
16 April: CDP portal opens for requesters
w/c 29 April: 2024 questionnaires will be available via the CDP website
14 May: CDP portal opens for disclosers
14 May: requesters can submit lists
4 June: 2024 reporting window opens
18 September: scoring deadline for disclosers
2 October: 2024 reporting window closes
Taking Action
Orbis Advisory offers tiered Gold, Silver, and Bronze service lines to suit your business’ CDP needs. Packages range from a light level of support and score checks to comprehensive submission support plus a ‘Risks & Opportunities’ workshop.
All companies have a role to play in limiting global temperature rise to 1.5°C. Please get in touch to learn more about how Orbis Advisory can support your company to navigate the new CDP updates, improve your score, and create a more sustainable world for all.
