Last month, CDP launched the Reimagining Disclosure Consultation, proposing a new reporting framework based on recommendations provided by the Task Force on Climate-related Financial Disclosure(TCFD). It also includes sector-specific disclosures and further harmonizes questionnaires across CDP programs.
This consultation will be closed on Sept. 15 with the aim to publish updated guidance and questionnaires in December 2017. The new framework will allow delivery of improved data and assessments for investors and other stakeholders.
Changes likely to be introduced within the new framework:
- Sector-specific questionnaires and scoring will be defined across all three CDP programs (Climate Change, Water, and Forests).
- Recommendations from the TCFD will be integrated into the questionnaires, including forward scenario analysis, low-carbon transition plans, and Science-Based Targets.
- Synergies with other reporting frameworks such as DJSI and GRI will be encouraged.
- A tiered system will be added for a smoother introduction to disclosure for companies responding for the first time or meeting certain criteria.
- A new Disclosure Platform will be opened. It will include improvements such as better performance and tagging of questions (e.g., sector specific, alignment with other frameworks and supply chain disclosures), along with additional guidance.
To illustrate the changes the questionnaires will undergo, CDP proposed revisions to 22 questions and introduced 24 new questions in the Climate Change questionnaire draft. A reorganization of the questionnaire to eight sections, instead of 15, is also proposed. In several programs, some substantive changes are foreseen. For instance, it is proposed to require disclosure on water withdrawals following context-based reporting, using geolocation data from facilities within water-stressed basins.
A significant differentiator in CDP is the focus on forward-looking scenarios. This is directly influenced by the TCFD recommended disclosure on, “the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.” More details will also be requested on the processes used to determine and categorize risks and opportunities, and financial impacts.
What does it mean for companies disclosing to CDP?
Scoring methodologies will significantly change in 2018, meaning that providing a similar response as in 2017 will not necessarily guarantee the same score. While companies will still have to follow some general recommendations on integrating climate action into their business strategy — by assessing risks and opportunities, and setting and achieving ambitious targets — some extra effort might be required to get the best score.
We recommend participating in the consultation process and monitor the upcoming changes. You can access to the Consultation Briefing Document here.
Schneider Electric is a CDP partner, providing continuous support to companies in their CDP disclosures, from building the very first questionnaire to identifying a clear roadmap for improving reporting and scores. Reach out to our team for more information.
Contributed by Irina Gilfanova, Senior Sustainability Consultant, and Frédéric Pinglot, Sustainability Consultant