Climate transparency is now a business must-have. Companies around the world need to show their environmental work to stakeholders. CDP (formerly the Carbon Disclosure Project) is the top choice for environmental disclosure, giving companies a clear way to show their climate action while meeting growing investor and regulatory demands.
Understanding CDP is not just about following rules—it’s about making your company a climate leader. It helps you find new business opportunities and builds the trust that stakeholders want more and more. This guide will help you understand CDP and show why it matters for your business, whether this is your first disclosure or you want a better score.
What is CDP and how does it work?
CDP is a global environmental disclosure system that collects and studies environmental data from thousands of companies worldwide. It started as the Carbon Disclosure Project in 2000 and now serves as the world’s biggest database of corporate climate information, covering over 18,700 companies across 160 countries.
The platform works on a simple idea: transparency drives action. CDP sends yearly questionnaires to companies asking for detailed information about environmental risks, opportunities, and performance across three key areas:
- Climate change – greenhouse gas emissions and decarbonization strategies
- Water security – water management practices and stewardship initiatives
- Forests – deforestation policies and sustainable sourcing practices
What makes CDP particularly powerful is the backing of institutional investors representing over $130 trillion in assets. They use CDP data to make smart decisions about their portfolios, creating a direct link between environmental disclosure and access to capital. The system also supports supply chain transparency, with major corporations requiring their suppliers to complete CDP questionnaires as part of procurement processes.
All this data becomes CDP’s yearly reports and rankings that influence investment decisions and regulatory policy. Companies that participate get access to benchmarking data, sector insights, and guidance on improving their environmental performance—benefits that extend far beyond compliance.
Why companies choose to disclose through CDP
Building on these platform benefits, companies decide to participate in CDP disclosure for several strategic reasons that reflect how important environmental transparency has become in modern business.
Investor pressure is one of the strongest drivers. Institutional investors now factor climate risks into their investment strategies, meaning companies that don’t disclose through CDP may find it harder to get capital or keep investor confidence.
Regulatory compliance is becoming equally important. While CDP disclosure isn’t mandatory in most places, the data collection and analysis often align with new regulatory frameworks, making CDP participation an efficient way to prepare for multiple reporting obligations.
Supply chain requirements provide another compelling motivator. Large corporations increasingly require their suppliers to show environmental responsibility through credible third-party assessments. A strong CDP score can be the difference between winning and losing major contracts, especially with multinational corporations committed to sustainable procurement.
Beyond external pressures, many companies discover that CDP disclosure drives internal improvements. The rigorous data collection process often reveals inefficiencies and opportunities that weren’t visible before, leading to cost savings and operational improvements that more than justify the disclosure effort. This internal value creation sets the foundation for understanding how the disclosure process actually works.
The CDP disclosure process and scoring system
CDP’s disclosure process centers on detailed questionnaires tailored to specific sectors and environmental themes. Companies typically receive their questionnaires between April and May, with submission deadlines in late July or early August covering four main areas: governance, risks and opportunities, business strategy, and targets and performance.
The three primary disclosure categories each address different environmental challenges. Climate change questionnaires focus on greenhouse gas emissions and decarbonization strategies, water security assessments examine management practices and stewardship initiatives, while forest questionnaires evaluate policies related to deforestation and sustainable sourcing.
CDP’s scoring methodology uses a scale from D- to A across four main performance bands:
- D-level scores – disclosure without awareness
- C-level – awareness of environmental issues
- B-level – management of environmental issues
- A-level – leadership in environmental performance and transparency
Independent assessment by accredited scoring partners evaluates responses against CDP’s methodology. Companies receive points for disclosure completeness, awareness of environmental issues, management approaches, and leadership activities, with emphasis on how well they address environmental challenges and show continuous improvement.
A List companies represent the top performers who demonstrate sophisticated environmental management, ambitious targets aligned with climate science, and transparent reporting of progress. However, achieving these elite scores often requires specialized knowledge that many companies find challenging to develop internally.
Ready to elevate your CDP disclosure?
CDP disclosure represents a significant opportunity to demonstrate environmental leadership and meet growing stakeholder expectations. However, achieving the scores that truly differentiate your organization requires expertise, time, and strategic thinking that many companies struggle to provide internally.
That’s where we come in. Our network of pre-screened sustainability reporting experts specializes in CDP disclosure across all categories, bringing the deep knowledge and proven track record needed to maximize your scoring potential. With our flexible approach, you can access this expertise within 48 hours, whether you need support for a complete disclosure or specific technical guidance.
Don’t let CDP disclosure become another overwhelming sustainability challenge. If you are interested in learning more, reach out to our team of experts today and discover how we can help you turn environmental transparency into a competitive advantage.
