What is the CDP and why voluntary reporting matters
A climate change risk assessment has become an essential tool for ensuring compliance and helping organisations stay resilient in a changing landscape.
In today’s rapidly evolving sustainability reporting landscape, transparency is no longer a nice-to-have—it’s a strategic imperative. Whether you’re just beginning your ESG journey or looking to strengthen your environmental disclosures, understanding the Carbon Disclosure Project (CDP) is a smart place to start.
The Carbon Disclosure Project (CDP) is a global non-profit that runs the world’s leading environmental disclosure system. Each year, thousands of companies, cities, and regions voluntarily report their environmental data through CDP’s standardized questionnaires. These are designed to help organizations measure, manage, and disclose their environmental impacts across three key areas:
Climate Change This questionnaire focuses on greenhouse gas (GHG) emissions, climate-related risks and opportunities, governance, strategy, and emissions reduction targets. It aligns closely with frameworks like the Task Force on Climate-related Financial Disclosures (TCFD) and is widely used by companies to demonstrate climate accountability.
Water Security This module addresses how organizations manage water-related risks, including water withdrawal, consumption, discharge, and the impact of water scarcity on operations and supply chains. It’s especially relevant for companies in water-intensive industries or regions facing water stress.
Forests The forests questionnaire is designed for companies whose operations or supply chains involve commodities linked to deforestation, such as timber, palm oil, soy, and cattle products. It helps organizations assess and disclose their exposure to deforestation risks and their efforts to promote sustainable sourcing.
Together, CDP’s questionnaires provide a comprehensive view of an organization’s sustainability profile and resilience. By helping companies measure and manage their impacts across climate change, water security, and forests, CDP drives environmental transparency and action. The data disclosed through this process is used by a multitude of stakeholders, including investors, customers, and policymakers to assess environmental performance, risk exposure, and long-term sustainability. Organizations can choose to respond to one or more questionnaires depending on their operations and stakeholder expectations.
Why report to the CDP if it’s not mandatory?
CDP reporting is voluntary—but that doesn’t mean it’s optional in practice. As expectations around sustainability transparency grow, CDP has become a globally recognized benchmark for climate-related disclosure. Participating in the CDP can help organizations stay ahead of regulatory trends, respond to stakeholder demands, and build long-term resilience.
Here are four key reasons why organizations are choosing to report:
Stay ahead of regulation: CDP aligns closely with global frameworks like the TCFD and the EU’s Corporate Sustainability Reporting Directive(CSRD). By engaging with CDP now, organizations can proactively prepare for emerging regulatory requirements and avoid the scramble of last-minute compliance. Early participation allows companies to build internal capacity, refine data collection processes and align their reporting with evolving standards. This forward-thinking approach not only reduces regulatory risk but also positions organizations as leaders in responsible governance and climate accountability.
Build trust with stakeholders: Transparency builds credibility, and CDP provides a globally recognized platform for demonstrating it. Because CDP scores and disclosures arepublicly available, they serve as a powerful signal of accountability to investors, customers, employees, and other key stakeholders. Participating in CDP shows that an organization is not only aware of its environmental responsibilities but is actively managing them. This openness fosters trust, strengthens brand reputation, and can even influence investment decisions and customer loyalty in an increasingly sustainability-conscious market.
Identify and manage risk: CDP’s structured disclosure process helps organizations uncover climate-related risks and opportunities across their operations, supply chains, and value chains. By mapping out these risks—whether physical, transitional, or reputational companies gain critical insights that support more informed, resilient decision-making. This proactive risk management approach enables organizations to anticipate disruptions, adapt strategies, and safeguard long-term business continuity.
Benchmark performance: CDP scoring enables organizations to compare their performance against peers and industry standards. This benchmarking not only highlights areas for improvement but also helps organizations understand the full arc of their sustainability data story. By analyzing their CDP responses, companies can identify gaps in data collection, reporting, or strategy—insights that are often missed without a structured disclosure process. Over time, this clarity allows organizations to refine their internal processes, close data gaps, and enhance the quality of their disclosures. As a result, CDP becomes a valuable tool not just for external transparency, but for driving continuous improvement and boosting scores in future reporting cycles.
Leveraging existing operational data
If your organization already tracks environmental or operational data—such as emissions, incidents, or resource usage—you may be closer to CDP readiness than you think. Many of the data points required for CDP reporting are already being collected across compliance, safety, and sustainability functions. Integrating this information into a broader reporting framework can unlock new insights and strengthen your overall environmental strategy.
In a world where an organization’s sustainability performance is increasingly tied to financial performance, voluntary disclosure through CDP is a proactive step toward resilience, reputation, and readiness. Whether you’re responding to investor pressure, preparing for future regulation, or simply aiming to lead in your industry, CDP disclosure is a powerful tool to have in your sustainability reporting toolkit.
