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Key takeaways from CDP 2021 and what to expect in 2022

By Niyathi Sethu
18th February 2022

Performing well on CDP demonstrates to investors, customers, and employees that your organisation is serious about tackling the climate crisis and is taking action to reduce its impact on the environment.

CDP is the world’s largest environmental disclosure system, each year supporting thousands of companies, cities, and regions to measure and manage their environmental risks and opportunities.

As companies begin gearing up to complete this year’s CDP response, it’s important to consider how changes to the scoring methodology might affect responses during this disclosure cycle. Read on to find out what you can expect from this year’s scoring and changes to specific categories of the questionnaire.

 

CDP 2021 key takeaways

Post COP26 there is increased pressure on companies, financial institutions, and investors to deliver on the commitments made in Glasgow. The subsequent launch of the ISSB (International Sustainability Standards Board) will act as a catalyst to improve transparency and accountability.

In 2021, CDP saw over 13,000 of the world’s largest corporations to disclose information regarding their impact upon and management of climate change, water security and deforestation related issues representing over 64% of market capitalization. This is a 37% increase in number of disclosing companies since 2020 across the three questionnaires.

After significant changes were made to the questionnaire in 2020 including a completely new questionnaire for financial institutions, the 2021 reporting cycle didn’t see any major changes, however it’s clear from overall results that the standard to achieve a Leadership or Management (A or B) score has increased.

CDP disclosed that “The Climate A List decreased from 280 in 2020 to 200 in 2021, as the consensus on what qualifies as climate leadership has evolved and the bar has been raised. The decrease is due to CDP continually ratcheting up the requirements of what qualifies as climate leadership, not corporates taking steps backward. Much of the low hanging fruit at companies’ disposal has now been utilised and more ambitious action is now urgently required”.


How did our clients perform in 2021?

Despite the tightening of criteria and the difficulty of collecting data during lockdown we are thrilled to see our clients rewarded with great CDP results, demonstrating commitment to ESG and showing market leadership.

  • 100% of our clients achieved an A or B score
  • 100% of our clients scored A or B in the financial services questionnaire for a second year in a row.

This achievement demonstrates our clients’ consideration of climate risk along with their ambition towards creating more sustainable businesses and working towards a zero-carbon future.

 

Key changes in 2022

There are more significant changes to questionnaire for 2022. CDP has amended questions and introduced new questions on focus areas that mirrors the strategic priorities for CDP and its stakeholders across the three questionnaires.

The Climate Change questionnaire has seen the most significant changes of the three questionnaires, however overall, 70% of it remains unchanged. The following information details the areas that see the most significant changes in the questionnaires.

Climate Change

  • New biodiversity module for all responders: To gather data on the extent to which responders have a biodiversity strategy in place and signpost the key areas that companies should be reporting information on.
  • New questions on board-level competence on climate-related issues within the Governance section and climate-related requirements for suppliers within the Engagement section
  • Minor modifications have been noted in Business Strategy with a focus on climate transition plans and transition-aligned spending, in addition to modifications to the Targets questions on targets and low-carbon products
  • Members of the RE100 initiative will be required to respond to six new questions in C8 energy on renewable energy, low carbon heat, steam, and cooling
  • New Forests & Water Security module for the Financial Services sector

 

Water Security

  • New questions on board-level competency on water-related issues, in addition to information on low water impact products and/or services and the organisation’s water withdrawal efficiency figure

 

Forests

  • New questions on board-level competency on forest-related issues, value chain mapping engagement with landscape approaches (including jurisdictional approaches), Land conversion footprint and DCF-status Risk procedures

 

CDP timeline

The Online Response System will open second week of April 2022 and on 27th July 2022, all CDP respondents must submit their final response via the Online Response System (ORS).

We advise businesses to pay attention to this year’s deadline to ensure responses are written in adequate time.

 

How we can help

The CDP team at Carbon Intelligence offer clients two different types of support through the CDP disclosure process. In addition to working with businesses to support them throughout the entire disclosure process, we also offer support in the form of a Gap Analysis. Our Gap Analysis scores a company’s previous year’s response against the new updated scoring methodology.

Where there have been new questions or modifications introduced, it is possible for companies to lose a percentage of their Disclosure and Awareness points, impacting their overall score. Carbon Intelligence’s Gap Analysis highlights these gaps and supports clients to reduce the possibility of a reduction in scoring performance.

Contact us to find out more info@carbon.ci