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Carbon Disclosure Project

From Wikipedia, the free encyclopedia

The CDP (formerly the "Carbon Disclosure Project") is an organisation based in the United Kingdom which
works with shareholders and corporations to disclose the greenhouse gas (GHG) emissions of major
corporations. As disclosure of emission related data as CDP's primary activity, the quality of the data reported
to CDP is key. In 2014, nearly 2000 businesses reported climate change data to CDP.[1] The value of CDP's
reports for investors and NGOs is contested.[2] Furthermore, the quality of the data on which CDP's reports are
premised is questionable.[3]

Contents
1 Background
2 Mechanism
3 CDP's Programs
3.1 Climate Change
3.2 Water
3.3 Supply Chain
3.4 Forests
3.5 Cities
3.6 Carbon Action Initiative
4 Leadership Indices
5 Relevance of CDP
5.1 Studies on the Carbon Disclosure Project
5.2 Corporate Recognition of the CDP
5.3 Corporate Participants
6 See also
7 References
8 External links

Background
International agreements such as the Kyoto Protocol have proved problematic, and individual governments
have been reluctant to develop stringent national limits on emissions for fear of big companies relocating their
factories and jobs to nations with laxer regulatory regimes. The Carbon Disclosure Project (CDP) attempts to
sidestep these national interests by focusing on individual companies rather than on nations. CDP brings
together institutional investors to focus attention on carbon emissions, energy usage and reduction wherever
companies and assets may be located.

Some corporations have higher greenhouse gas emissions than individual nation states. Some leading
companies have moved to become carbon neutral, but for others there is the scope to reduce energy usage and
greenhouse gas-emissions through the adoption of energy-efficiency methods and business planning.

Mechanism
CDP works with 3000 of the largest corporations in the world to help them ensure that an effective carbon
emissions / reductions strategy is made integral to their business. The collection of self-reported data from
thousands of companies is supported by 822 institutional investors with US$95 trillion under management.[4]
CDP operates from Berlin, New York, London and has partners in 18 of the world's major economies which
help deliver the programme globally. It has:

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Established the world's largest repository of GHG emissions and energy use data accounting for some
26% of global anthropogenic CO2
Started to establish a globally used standard for emissions and energy reporting
Examined the 250 major electric utilities globally (high GHG emitters)
Obtained backing from blue chip investors including HSBC, JPMorgan Chase, Bank of America, Merrill
Lynch, Goldman Sachs, American International Group, and State Street Corp.
Active staff or partner organisations in the United States, China, Japan, Germany, United Kingdom,
France, Canada, India, Brazil, Nordic region, South Africa, Netherlands, Australia, and New Zealand,
among others
Works with corporations including WalMart, Tesco, Cadbury Schweppes, Procter and Gamble, and many
others to measure emissions through the supply chain.

Much of the data elicited has never been collected before. This information is helpful to investors,[5]
corporations, and regulators in making informed decisions which take into account corporate risk from future
government legislation, possible future lawsuits, and shifts in consumers' perceptions towards heavy emitters.
RepRisks data will add to the current evaluation process by validating company-provided information and
clarifying how a companys policies, commitments and initiatives translate into performance.[6][7] An estimated
$27 trillion will be spent over the next 30 years on new energy-related capital developments (power stations,
fuel distillation plants, etc.). In line with ecological modernisation school of thought, CDP considers it vital that
the right or optimally-suitable technologies are adopted. In particular:

Giving higher priority to energy efficient design in new capital projects

Declaring firm targets for capping and reducing corporate emissions
Identifying new low carbon business opportunities
Pricing in how, under different scenarios, the price of carbon emissions will shift the economics of
alternative energy sources.

The process of companies having to respond to CDP delivers real changes in business practice resulting in
lower energy use. In many cases this leads to a higher proportion of energy from renewable sources.

CDP has 501(c)3 charitable status through Rockefeller Philanthropy Advisors in New York City and is a
registered charity in the United Kingdom.

CDP Europe is a registered charity at the local court of Charlottenburg, Germany.

CDP's Programs
CDP operates in most major economies worldwide and channels information and progress through individual
programs. These are: Climate Change (https://www.cdp.net/en-US/Programmes/Pages/climate-change-program
s.aspx), Water (https://www.cdp.net/en-US/Programmes/Pages/cdp-water-disclosure.aspx), Supply Chain (http
s://www.cdp.net/en-US/Programmes/Pages/CDP-Supply-Chain.aspx), Forests (https://www.cdp.net/en-US/Prog
rammes/Pages/forests.aspx) and Cities (https://www.cdp.net/en-US/Programmes/Pages/CDP-Cities.aspx). Its
Carbon Action (https://www.cdp.net/en-US/Programmes/Pages/Initiatives-CDP-Carbon-Action.aspx) initiative
which encourages investors to accelerate carbon reduction in high emitting industries and to implement
emissions reducing projects that generate positive return on investment.

Climate Change

CDP's climate change program aims to reduce companies greenhouse gas emissions and mitigate climate
change risk. CDP requests information on the risks and opportunities of climate from the worlds largest
companies on behalf of 822 institutional investor signatories with a combined US$95 trillion in assets.[8]

Water

In 2014 573 investors used the CDP Water program, collectively representing US$60 trillion in assets.[9]
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Supply Chain

In 2015 CDP's supply chain program involved 75 corporations with $2 trillion in procurement spend.
Corporations requested that their suppliers disclose information on how they are approaching climate and water
risks and opportunities. Data was gathered from 4,005 companies worldwide.[10]

Forests

CDP's forests program acts on behalf of 298 signatory investors with US$19 trillion in assets. CDP collects
information from companies through the lens of the four agricultural commodities responsible for most
deforestation: timber, palm oil, cattle and soy. CDPs forests program was first set up by the Global Canopy
Programme Global Canopy Programme which remains a prime funder for the program.[11]

Cities

CDP Cities (https://web.archive.org/web/20110728181527/https://www.cdproject.net/en-US/Programmes/Page

s/CDP-Cities.aspx) provides standardized reporting of emissions data, analysis of climate risks and
opportunities and adaptation plans for cities around the world. The potential and need for this program is
enormous since soon over half of the worlds population will live in cities.[12] CDP Cities provides an easy to
use global platform based upon a simple questionnaire that allows city governments to publicly disclose their
greenhouse gas emission data. One of the greatest values of the annual report, first released in June 2011, is to
city leaders who can identify peers who are addressing similar risks and issues with new and innovative
strategies for reducing carbon emissions and for mitigating risk from climate change.

Carbon Action Initiative

Carbon Action is an investor-led initiative which aims to accelerate company action on carbon reduction and
energy efficiency activities which deliver a satisfactory return on investment.

304 investors with US$22 trillion in assets under management ask the worlds highest emitting companies to
take three specific actions in response to climate change:

Make emissions reductions (year-on-year);

With targets publicly disclosed; and
ROI-positive investments in projects

In 2015, the Carbon Action request has gone to over 1300 companies across 17 high emitting industries.[13]

CDP launched a new research series at the beginning of 2015, taking a sector by sector approach.[14]

Leadership Indices
CDP recognizes companies with high-quality disclosure as top scoring companies in the Climate Disclosure
Leadership Index (CDLI).

CDLI scores are calculated according to a standardized methodology which measures whether and how well, a
company responds to each question. A company is awarded points if it reports its greenhouse gas emissions,
but the actual amount of emissions does not affect its score. CDLI scores provide a valuable perspective on the
range and quality of responses to CDPs questionnaire.

Relevance of CDP
Studies on the Carbon Disclosure Project

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N. Misani and S. Pogutz. Unraveling the effects of environmental outcomes and processes on financial
performance: A non-linear approach. "Ecological Economics", 109: 150-160, 2015.
F. Gasbarro, F. Rizzi and M. Frey. Adaptation Measures of Energy and Utility Companies to Cope with
Water Scarcity Induced by Climate Change. "Business Strategy and the Environment". July 2014.
B. Doda, C. Gennaioli, A. Groundson and R. Sullivan. Are corporate carbon management practices
reducing corporate carbon emissions?. "Corporate Social Responsibility and Environmental
Management" January 2015
E.M. Matsumura, R. Prakash and S. Vera-Munoz. Firm-Value Effects of Carbon Emissions and Carbon
Disclosures. "The Accounting Review" 89(2): 695-724, 2014
D.C. Matisoff, D.S. Noonan and J.J. O'Brien. Convergence in environmental reporting: Assessing the
carbon disclosure project. "Business Strategy and the Environment" 22(5): 285-305, 2013
C. Saka and T. Oshika. Disclosure effects, carbon emissions and corporate value. "Sustainability
Accounting, Management and Policy Journal". 5(1):22-45, 2014
E-H. Kim and T. Lyon. When Does Institutional Investor Activism Increase Shareholder Value?: The
Carbon Disclosure Project. "The B.E. Journal of Economic Analysis and Policy". 11(1), 2014
A. Harmes. The limits of carbon disclosure: Theorizing the business case for investor environmentalism.
Global Environmental Politics, 11(2):98119, 2011.
A. Kolk, D. Levy, and J. Pinkse. Corporate Responses in an Emerging Climate Regime: The
Institutionalization and Commensuration of Carbon Disclosure. European Accounting Review,
17(4):719745, Dec. 2008.
B.W. Lewis, J.L. Walls, and G.W.S. Dowell. Difference in Degrees: CEO Characteristics and Firm
Environmental Disclosure. Strategic Management Journal, 35(5): 712-722, May, 2014.
C.F. Jira and M.W. Toffel. Engaging Supply Chains in Climate Change. Manufacturing & Service
Operations Management, 2013.
E.M. Reid and M.W. Toffel. Responding to Public and Private Politics: Corporate Disclosure of Climate
Change Strategies. Strategic Management Journal, 30(11): 11571178, Nov. 2009.

Corporate Recognition of the CDP

The CDP represents 822 institutional investors, holding US$95 trillion in assets.[15] In 2010, CDP was called
"The most powerful green NGO you've never heard of" by the Harvard Business Review.[16] In 2012 it won the
Zayed Future Energy Prize.[17]

Corporate Participants

Apple Inc.
Level 3 Communications
Siemens
Trkiye Sanayi Kalknma Bankas
Dell
Hewlett Packard
L'Oral
PepsiCo
Cadbury Schweppes
Nestl
Procter & Gamble
Tesco
Unilever
Lloyds TSB
Amcor
Johnson Controls
Mtro-Richelieu
Schneider Electric
NH Hoteles
Ventas, Inc.

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See also
Carbon accounting
Carbon footprint
Global warming
Greenhouse debt

References
1. https://www.cdp.net/CDPResults/CDP-climate-performance-leadership-index-2014.pdf
2. A. Kolk, D. Levy, and J. Pinkse. Corporate Responses in an Emerging Climate Regime: The
Institutionalization and Commensuration of Carbon Disclosure. European Accounting Review,
17(4):719745, Dec. 2008.
3. Analysis of corporate submission of data to voluntary carbon disclosure ranking projects questions the
quality of data: relevant for understanding the CDP is then that while some corporate data may be
disclosed, whether that data is any good is a completely different issue. Lippert, I. (2013). Enacting
Environments: An Ethnography of the Digitalisation and Naturalisation of Emissions (http://nbn-resolvin
g.de/urn:nbn:de:bvb:384-opus4-21997). PhD thesis, Augsburg University, Philosophisch-
Sozialwissenschaftliche Fakultt, Augsburg. see Pages 256-279
4. https://www.cdp.net/en-US/Pages/About-Us.aspx
5. http://www.sri-connect.com/index.php?option=com_content&view=article&id=475:faq-do-investors-
use-cdp-data&catid=132:take-control-of-sri-communications&Itemid=1112
6. "RepRisk provides ESG risk data for review of CDPs climate performance leaders" (https://www.cdp.ne
t/en-US/News/CDP%20News%20Article%20Pages/RepRisk-provides-ESG-risk-data-for-review-of-CDP
-climate-performance-leaders.aspx).
7. "RepRisk" (http://ratesustainability.org/hub/index.php/search/at-a-glance-company/76).
ratesustainability.org. Retrieved 2016-05-31.
8. https://www.cdp.net/en-US/Programmes/Pages/CDP-Investors.aspx
9. https://www.cdp.net/CDPResults/CDP-Global-Water-Report-2014.pdf
10. https://www.cdp.net/CDPResults/CDP-Supply-Chain-Report-2015.pdf
11. https://www.cdp.net/en-US/Programmes/Pages/forests.aspx
12. Cohen, Joel, E (2003). "The Human Population: the next half century". Science. 302 (5648): 11721175.
PMID 14615528 (https://www.ncbi.nlm.nih.gov/pubmed/14615528). doi:10.1126/science.1088665 (http
s://doi.org/10.1126%2Fscience.1088665).
13. https://www.cdp.net/en-US/Programmes/Pages/Initiatives-CDP-Carbon-Action.aspx
14. https://www.responsible-investor.com/home/article/cdp_auto_investor_research/
15. https://www.cdp.net/en-US/Pages/About-Us.aspx
16. Andrew Winston (October 5, 2010). "The Most Powerful Green NGO You've Never Heard Of" (http://bl
ogs.hbr.org/winston/2010/10/the-most-powerful-green-ngo.html). Retrieved Oct 26, 2012.
17. ZaYed Future Energy Prize, 2012 Winners "Archived copy" (https://web.archive.org/web/201206152230
04/http://www.zayedfutureenergyprize.com/en/winners-and-runners_up). Archived from the original (htt
ps://www.zayedfutureenergyprize.com/en/winners-and-runners_up) on 2012-06-15. Retrieved
2012-08-27.

External links
Carbon Disclosure Project (https://web.archive.org/web/20070821002227/http://www.cdproject.net/)
2011 (first) annual report from the CDP Cities program (https://web.archive.org/web/20120124122914/ht
tps://www.cdproject.net/Documents/CDP-Cities-2011-Report.pdf)

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