The Carbon Disclosure Project
By Charlie Ryan
The Carbon Disclosure Project (CDP) is a UK based Organization designed to bring transparency to, and ultimately reduce, the amount of carbon emissions and water usage amongst the world’s largest corporations. The CDP is a 501(c)3 non-profit organization that works on behalf of 655 investors holding assets totaling $78 trillion. These institutional investors believe that the CDP can act as a mechanism to help safeguard their investments from risks associated with climate change, water scarcity, flooding, and pollution. These investors also believe the CDP will help to create investment opportunities as well, by learning which companies are working to actively reduce their long term risks associated with climate change. The data collected by the CDP is utilized by investment managers and advisers, asset owners, data and index providers, banks and brokers.
Every year the CDP sends out questionnaires to the world’s largest companies, based on market capitalization. These questionnaires have typically dealt with questions regarding energy usage and green house gas emissions. More recently however, the CDP has expanded their role by beginning to acquire information regarding water usage and corporate supply chains. In addition to corporations, the CDP has also begun to ask cities for information regarding their energy usage, water usage, and GHG emissions.
One attribute of the CDP that seems especially promising, is its ability to quantify and measure the emissions and energy usage of a specific business sector. The compilation and comparing of data from companies working in the same industry paints a very clear picture of which industries emit the most green house gasses. Creating this industry snapshot is very helpful in determining which individual companies and sectors need the most attention in terms of emission reductions and may be very helpful in determining where carbon regulations can be most efficiently implemented. This industry snapshot can also be very influential in encouraging companies within a sector to take part in the CDP as participation becomes quickly adopted throughout the industry.
The CDP seems to be in a very strong position to act as an influential, market driven regulator in the foreseeable future. Some critics argue that the CDP actually does very little in affecting the way businesses think about, and act on, their environmental impacts, arguing that the CDP does not produce any penalties for non-compliance and there is often no third party verification. My response to these critics is, give it time. The CDP has already brought huge attention to a global issue that governments have recently struggled to do anything about. In the current wild west of carbon accounting the CDP brings the most raw data, standardization, and promise to the table.
What has been your experience with the CDP? E-mail your experiences to firstname.lastname@example.org
The views expressed by the authors of this blog and those providing comments are theirs alone, and do not necessarily reflect the views of NiSE at the Institute on the Environment or any employee thereof.