CDP Explained: The Essentials for Business Leaders

What is CDP? 

CDP (formerly the Carbon Disclosure Project) is a non-profit that runs the world’s largest system for environmental reporting. Each year, thousands of companies, cities and regions disclose through CDP on their climate change, water, and forest impacts. The goal is to give investors, customers, and other stakeholders reliable data to assess how organisations are managing environmental risks and opportunities.

How It Works 

Organisations complete a standardised questionnaire each year. Depending on the topics covered, they may be asked about:

• Greenhouse gas emissions data (Scope 1: direct emissions, Scope 2: purchased energy, Scope 3: supply chain and other indirect emissions)

• Carbon reduction targets and transition plans

• Risks and opportunities linked to climate change, water scarcity, or deforestation

• Governance and oversight of environmental issues

Responses are scored from A to D-. An “A List” company demonstrates best practice across governance, targets, and progress, while lower scores reflect early-stage disclosure or limited action. The scoring rewards both transparency and performance, so even if you are just starting, being open about your data and plans counts. For smaller businesses, CDP also offers a simplified SME pathway with fewer questions.

Why Report Through CDP? 

Business Benefits: Reporting through CDP delivers clear business benefits. It allows you to benchmark environmental performance against peers, identify gaps, and build credibility with stakeholders who increasingly expect transparency. Many large customers also require suppliers to disclose through the platform, making it an important part of supply chain engagement.

Building on Existing Work: For most organisations, disclosure builds on work already underway. If you are collecting emissions data or publishing sustainability information, CDP is not necessarily complex - it provides a structured way to present that data in a format recognised worldwide. There is no fee to respond, although companies can choose to pay for additional support or feedback.

Alignment with Global Standards: CDP is also aligned with the International Sustainability Standards Board (ISSB), which is setting the global baseline for sustainability reporting. This means CDP disclosures can support preparation for future requirements such as the UK Sustainability Reporting Standards (UK SRS) and the EU’s Corporate Sustainability Reporting Directive (CSRD), while also helping organisations start to integrate nature-related risks through links with the Taskforce on Nature-related Financial Disclosures (TNFD).

What Businesses Should Do Now

• Check for a CDP request: Many companies are invited to respond by investors or customers

• Collect the essentials: Start with Scope 1 and 2 emissions, any reduction targets, and governance structures. If possible, begin estimating Scope 3 emissions

• Engage teams early: CDP reporting requires input from sustainability, finance, operations, and procurement

• Use the SME pathway if eligible: Smaller organisations can take advantage of the lighter disclosure option

• Focus on progress, not perfection: CDP rewards transparency as much as performance. Start with what you know and improve each year

If your organisation is navigating CDP for the first time or wants to improve its score, I can help make the process practical and aligned with your existing reporting. Please feel free to get in touch.