4 Things Your Company Needs to Know About The Carbon Disclosure Project

It’s that time of year again when thousands of companies start preparing their annual Carbon Disclosure Project (CDP) Report. In 2011, more than three thousand organizations participated, and if you are one of them (or plan to add your name to the growing roster), here’s what you need to know:

#1. Participation in the Carbon Disclosure Project (CDP) Is Voluntary (Sort of)

No company is required by law or regulation to disclose their carbon emissions or climate change strategy via a CDP Report. However, many large retailers (like Walmart) and institutions (like Bank of America) are now asking their suppliers to participate. Additionally, investors are using the data generated by CDP to evaluate climate change preparedness and commitment to disclosure. In these volatile economic times, it pays to be uber-responsive to customers and investors. So if you’re hearing rumblings about CDP, you’ll want to make sure you allocate enough time and manpower to crafting a good response.

#2. Information You Submit to the Carbon Disclosure Project (CDP) Is Publicly Available

The fact that “disclosure” is in the name of the organization should tip you off, but it bears repeating: anything that you submit in your CDP Report will become publicly available. That means people can download your full report, look at industry-aggregated data, or look at specific value chain impacts. Some of this access requires a paid subscription, but the key thing to know is that NOTHING that you submit should be confidential, proprietary, or violate fair disclosure laws. (Fortunately, you can choose which questions to answer. While “the more the better” in terms of your overall score, you can skip over anything that is too sensitive for the public.)

* 5/24/2012 Update: (Thanks to CDP for reaching out with clarification.) There *is* an option for companies to choose to make their CDP reports “not publicly available.” If that option is selected, your information will be added to other companies’ responses and used for aggregate analysis, but your individual answers will NOT be available to the general public. An important caveat: if you are responding to an investor request or a supplier request (e.g. like Walmart) — your individual answers WILL be made available to the requesting organizations — even if you choose not to make your CDP report publicly available. So, it bears repeating that you should carefully review your answers (preferably with your General Counsel) to ensure that you are abiding by your legal disclosure requirements. For more information about who gets to peek at your report, check out CDP’s helpful guidance page.

#3. Carbon Disclosure Project (CDP) Is Not a Carbon Calculator

About half of the questions on the CDP Assessment are related to your organization’s carbon footprint. It asks you to enter in amounts for your Scope 1, Scope 2, and Scope 3 emissions (including the data, the sources that are included in your calculations, GHG emissions factors, and the overall GHG accounting methodology you used). The assessment, however, does NOT tell you how to go about calculating your carbon footprint–you will need to undertake that project as a separate task. So if you’re just getting started with this whole CDP thing, make sure to give yourself several months in advance to get your data in order. (If you need assistance with calculating your carbon footprint, we can help! We have a streamlined process that will get you up and running in as little as 60 days, including third party validation and review!)

#4. Carbon Disclosure Project (CDP) Is More Than Just Numbers

Your carbon footprint information is just the start of what’s included in the CDP Assessment. In addition, you’ll need to answer questions about the opportunities (positives) and risks (negatives) associated with climate change, including (but not limited to):

  • Impact of changing weather patterns
  • Geographical impacts
  • Impact on products and services
  • Supply chain impacts

Depending on which category you fall into (e.g. Walmart supplier, Investor, etc.), your deadline may shift–most are around June-July. But one thing is for certain: if you don’t have a game plan for CDP, you need to get one immediately. Don’t wait until the last minute!

Jennifer Woofter is the founder and president of Strategic Sustainability Consulting, a boutique firm specializing in helping rapidly growing mid-size businesses integrate sustainability into their business model. She tweets at @jenniferwoofter.