CDP: What has changed since 2021?
Guidance for the 2022 CDP questionnaires was released in January and the Online Response System (ORS) opened this week. This article will look at the key changes since the 2021 process.
What is CDP and why submit?
CDP, formerly the Carbon Disclosure Project, allows companies, cities, states, and regions to disclose data about their environmental impact on three distinct questionnaires: Climate Change, Water Security, and Forests. By focusing on collecting and disclosing the relevant data, these questionnaires provide the foundations to manage environmental impacts and increase transparency for stakeholders. Read our previous article on CDP for more information on what it is and how it works.
Many financial institutions are requesting environmental disclosure, and an increasing number of organisations are disclosing their environmental information voluntarily. There are many business advantages to doing so, such as improving reputation, boosting competitive advantage, and building resilience by getting ahead of regulation. With more than 13,000 companies disclosing through CDP in 2021, representing over 64% of global market capitalisation, now more than ever is the time to submit.
Key Changes to the 2021 Process
The 2022 questionnaires have remained largely the same as they were in 2021, with a few revisions to maintain and encourage best practices. Focus on net-zero remains central, and biodiversity has now been included, acknowledging that reaching net-zero will require more than carbon management alone. New questions have also been added to the Climate Change survey to further align CDP disclosure with the guidelines from the Taskforce on Climate-related Financial Disclosures (TCFD)
Climate Change Updates
A new Biodiversity module on biodiversity strategies, which also signposts key areas that companies should be reporting information on;
A new question in the Governance section, regarding board member climate-related issue competency;
In the Engagement section, new climate-related requirements for suppliers;
Modifications in the Business Strategy section regarding climate transition plans and transition-aligned spending;
In the Targets section, modifications regarding targets and low-carbon products;
Six new questions for members of the RE100 initiative about renewable energy, low carbon heat, steam, and cooling; and
A new Forests & Water Security module for the Financial Services sector.
Water Security Updates
A question on board-level competency on water-related issues;
Information on low water impact products and/or services; and
A question on the organisation’s water withdrawal efficiency figure.
Forests Updates
A new question on board-level competency on forest-related issues;
A new question on value chain mapping engagement with landscape approaches; and
A land conversion footprint and DCF-status Risk procedures question.
Deadline
All CDP respondents must submit their final response via the Online Response System (ORS) by 27th July 2022.
How we can help
The Orbis Advisory team can guide your company through the process of disclosing through CDP and help you align with industry best practises. We work across a broad range of sectors to develop and support ESG strategies to meet investor demands, prepare for upcoming legislative changes, and create tangible benefits both now and in the future. Please see our website to explore our full range of services, or send an email to info@orbisadvisory.com for any inquiries.
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