What is CDP?
A Brief Overview
CDP (originally the Carbon Disclosure Project) is a global non-profit organisation founded in 2000 in London. It runs the world’s leading environmental disclosure system for companies, cities, states, and regions.
Every year, CDP collects and scores self-reported data from organisations on three key themes:
- Climate Change – Greenhouse gas emissions, targets, energy use, and climate governance.
- Water Security – Risks, dependencies, and strategies related to water management.
- Forests – Exposure to deforestation risks from key commodities (e.g., palm oil, timber, cattle, soy).
In 2024, CDP reported over 23,000 organisations disclosing their data, including over 70% of global market capitalisation. This represents a seismic shift toward transparency, with environmental reporting becoming as critical as financial reporting.
The Purpose and Impact of CDP
CDP’s mission is simple: to make environmental disclosure standard practice so that investors, buyers, and policymakers can make informed decisions.
By collecting data through a standardised questionnaire, CDP drives accountability, transparency, and continuous improvement in environmental performance.
Its influence extends far beyond reporting:
- Over 680 institutional investors (representing more than US$130 trillion in assets) use CDP data to assess climate-related risks and opportunities.
- Major procurement programmes such as those run by Walmart, Unilever, and the UK Government use CDP Supply Chain data to evaluate supplier emissions and environmental action.
- CDP data feeds into other global reporting frameworks, including the Science Based Targets initiative (SBTi), Task Force on Climate-Related Financial Disclosures (TCFD), and the Corporate Sustainability Reporting Directive (CSRD) in the EU.
In essence, CDP acts as the connective tissue between business operations, investor expectations, and regulatory compliance.
The Business Case for CDP Reporting
- Investor Confidence and Access to Capital
Investors increasingly view climate risk as financial risk. A company that fails to disclose its emissions and climate strategy is perceived as high risk and may face higher capital costs.
According to CDP (2024), companies that achieve an “A” rating typically enjoy stronger investor confidence and are more likely to attract ESG-linked financing.
- Regulatory Readiness
CDP’s disclosure process aligns with major global frameworks such as TCFD, ISSB (IFRS S2), and EU CSRD, ensuring that companies using CDP are already compliant or well-prepared for upcoming mandatory reporting obligations.
- Tender and Supply Chain Advantage
Public procurement agencies and multinational corporations now require suppliers to provide environmental data, often via CDP.
Being a CDP discloser can enhance eligibility for contracts, strengthen client relationships, and reduce supply chain risk.
- Strategic Risk Management
Through CDP’s risk assessment framework, businesses gain deeper insight into potential operational, financial, and reputational risks associated with climate change.
This supports proactive decision-making, from diversification of suppliers to infrastructure adaptation.
- Brand Reputation and Stakeholder Trust
CDP’s transparency benchmark is recognised worldwide. A strong disclosure score signals that your company is serious about sustainability, building trust among customers, employees, and regulators alike.
How CDP Works
Step 1: The Questionnaire
Each year, CDP releases updated questionnaires covering Climate Change, Water Security, and Forests.
These are tailored to different organisation types: corporates, cities, and supply chain participants.
The Climate Change Questionnaire covers 11 categories:
- Governance
- Risks and opportunities
- Business strategy
- Targets and performance
- Emissions data (Scope 1, 2, and 3)
- Energy
- Emission reduction initiatives
- Low-carbon products
- Verification
- Carbon pricing
- Engagement and communication
Step 2: Data Submission
Companies submit data through the CDP Online Response System (ORS). The reporting period typically runs from April to July each year.
Step 3: Scoring and Feedback
Responses are independently evaluated, and each company receives a score from A to D-:
- A and A-(minus): Leadership
- B and B-(minus): Management
- C and C-(minus): Awareness
- D and D-(minus): Disclosure only
Scores are published annually in CDP’s Global A List Report, celebrating corporate climate leaders.
CDP Scoring Explained
The scoring system reflects both disclosure quality and action taken.
Score
Level
Description
A / A-
Leadership
Demonstrates best practice; science-based targets; verified emissions; active supplier engagement.
B / B-
Management
Established governance and reduction initiatives; credible carbon data.
C / C-
Awareness
Identifies risks and opportunities but limited action.
D / D-
Disclosure
Early-stage reporting with limited strategy.
F
Failure to Disclose
No data submitted.
A company moving from “C” to “B” is showing meaningful progress. The jump to “A” represents mature, science-aligned decarbonisation.
CDP and the Connection to Climate Risk Management
a. Physical and Transition Risks
CDP encourages companies to assess two categories of climate risk:
- Physical Risks: Damage to assets or operations from climate-related events (e.g., flooding, heatwaves).
- Transition Risks: Policy, legal, technology, and market changes as the world moves to a low-carbon economy.
For example:
- A logistics company may face transition risk from rising fuel prices and carbon taxes.
- A manufacturer may face physical risk from extreme weather disrupting supply chains.
b. Financial Integration
CDP reporting aligns with TCFD, meaning disclosures include information on financial exposure and resilience.
This helps investors evaluate long-term sustainability performance alongside financial metrics.
c. Mitigation Opportunities
Companies that effectively identify and act on risks through CDP often uncover operational efficiencies and new revenue opportunities, such as low-carbon product development or renewable energy investment.
The Link Between CDP, SBTi, and Net Zero
CDP and SBTi (Science Based Targets initiative) are closely integrated. In fact, SBTi uses CDP data as part of its validation and progress tracking.
To achieve an “A” rating in CDP’s Climate Change questionnaire, companies are typically required to:
- Have an SBTi-approved or aligned target.
- Publicly disclose progress toward that target.
- Demonstrate verified emission reductions across Scope 1, 2, and 3.
This alignment means that businesses that disclose through CDP are simultaneously advancing toward science-based net zero, strengthening their credibility and readiness for future ESG scrutiny.
CDP for Supply Chain Sustainability
Over 300 major corporations use the CDP Supply Chain program to engage their suppliers. These include global leaders such as Dell, Nestlé, and Walmart.
For suppliers, participating in CDP’s Supply Chain module can:
- Open doors to new contracts by meeting client requirements.
- Identify inefficiencies in energy, materials, and logistics.
- Strengthen relationships through shared climate goals.
For buyers, it provides visibility into supply chain emissions (Scope 3), which can represent up to 90% of total corporate emissions.
By 2025, CDP has integrated supplier engagement metrics into its scoring, making collaboration across the value chain essential for top ratings.
How CDP Data Is Used by Investors and Policymakers
Investors
Institutional investors use CDP data to:
- Screen portfolios for climate risk.
- Engage with companies lagging in disclosure or reduction efforts.
- Integrate ESG metrics into decision-making.
The CDP Scores dataset is licensed to platforms such as Bloomberg, Refinitiv, and MSCI ESG Research, ensuring that non-disclosing companies are visible as higher risk.
Policymakers and Regulators
Governments use CDP data to monitor progress toward national and international climate targets, such as the UK’s Net Zero Strategy and the EU Green Deal.
In many jurisdictions, CDP-aligned reporting is the easiest route to demonstrate compliance with:
- UK Streamlined Energy and Carbon Reporting (SECR)
- EU Corporate Sustainability Reporting Directive (CSRD)
- ISSB/IFRS Sustainability Standards (S1 and S2)
Common Challenges in CDP Reporting
a. Data Complexity
Collecting complete Scope 3 data remains the most significant challenge.
Solution: Implement digital carbon accounting platforms or work with third parties like NCZ to manage supplier engagement and fill data gaps.
b. Resource Limitations
Small and medium enterprises often lack internal expertise to navigate CDP questionnaires.
Solution: Start with the Climate Change section, focusing on measurable Scope 1, 2 and 3 data before expanding to full disclosure.
c. Verification and Consistency
Inconsistent methodologies across business units can undermine data integrity.
Solution: Align with recognised standards such as ISO 14064 and GHG Protocol for data verification.
d. Reporting Fatigue
With multiple frameworks emerging, companies face “disclosure overload.”
Solution: Use CDP as your central reporting base, which overlaps with TCFD, SBTi, and CSRD, reducing duplication.
How CDP Scores Drive Competitive Advantage
A high CDP score signals leadership—but the benefits extend far beyond prestige.
Business Impact
Example
Procurement Success
Many public and private tenders now require CDP participation.
Investor Attraction
ESG-focused funds prioritise CDP A-list companies.
Reputation and Branding
Leadership scores can be highlighted in marketing, sustainability reports, and annual disclosures.
Operational Efficiency
Continuous measurement leads to energy and cost savings.
Employee Engagement
Employees take pride in working for transparent, sustainability-driven companies.
Companies on CDP’s “A List” consistently outperform peers in ESG performance, customer trust, and financial resilience.
The Road to an “A” Score: Best Practices
- Start with Accurate Measurement
Use credible, standardised tools for emissions calculation (aligned with ISO 14064 and NCZ’s Carbon Accounting Framework).
Set Verified Targets
- Align targets with SBTi or similar science-based pathways.
Engage Your Supply Chain
- Implement supplier questionnaires and sustainability performance reviews.
Ensure Independent Verification
- Third-party verification adds credibility and supports higher CDP scores.
Integrate Carbon Management into Corporate Strategy
- Ensure the board and leadership teams are actively involved.
Communicate Transparently
- Regularly publish results and updates in sustainability and financial reports.
Use Technology for Reporting
- Employ carbon management software to centralise data collection and automate reporting.
NCZ’s Role in Supporting CDP-Aligned Businesses
At Neutral Carbon Zone, we help organisations prepare for, complete, and optimise their CDP submissions.
Our Services Include:
- Carbon Accounting and Baseline Measurement
Using ISO 14064 and GHG Protocol-aligned methods to ensure accurate Scope 1–3 data. - Gap Analysis for CDP Readiness
Reviewing current sustainability practices against CDP requirements. - Emission Reduction and Strategy Development
Translating CDP feedback into actionable carbon reduction plans. - Verification and Certification
Supporting independent verification to enhance credibility. - Training and Capacity Building
Educating internal teams to manage CDP reporting autonomously in future cycles.
Whether your business is new to disclosure or aiming for a CDP A rating, NCZ provides the technical and strategic support needed to get there.
The Future of CDP and Corporate Disclosure
By 2025, CDP has evolved from a voluntary platform into a global standard.
Emerging trends include:
- Integration with ISSB/IFRS: CDP’s questionnaire now aligns directly with global accounting standards for sustainability.
- Digital Automation: Integration of AI tools for real-time emissions tracking and automated reporting.
- Convergence with ESG Ratings: CDP data now feeds into credit risk assessments and corporate lending decisions.
- Focus on Nature and Biodiversity: CDP’s 2025 framework includes biodiversity metrics in line with the Taskforce on Nature-related Financial Disclosures (TNFD).
This evolution means that non-disclosure is no longer benign; it signals material business risk.
Conclusion
The Carbon Disclosure Project (CDP) has transformed from a reporting platform into a global system of corporate environmental accountability.
In a business environment where transparency equals trust, CDP provides the language, structure, and data investors and regulators demand.
Companies that act early, disclose comprehensively, and align with CDP are not just complying, they’re leading. They’re proving to stakeholders that they understand the risks, are managing them strategically, and are part of the global transition to a low-carbon economy.
At NCZ, we help you take that step, translating complex disclosure requirements into measurable, actionable strategies that position your business for long-term success and recognition.
Measure. Manage. Disclose. Lead with NCZ.
References
- CDP. (2024). Global Environmental Disclosure Report.
- CDP. (2025). Scoring Methodology and Guidance for Corporates.
- Task Force on Climate-Related Financial Disclosures (TCFD). (2023). Final Recommendations Report.
- International Sustainability Standards Board (ISSB). (2024). IFRS S1 & S2 Standards.
- European Commission. (2024). Corporate Sustainability Reporting Directive (CSRD).
- UK Department for Energy Security and Net Zero (DESNZ). (2024). Net Zero Growth Plan.
- Science Based Targets initiative (SBTi). (2024). Annual Progress Report.
- PwC. (2025). The State of Climate Disclosure: Business Readiness and Risk Management.