In-depth study of the CDP questionnaire and strategies for maximizing your rating

In the first part of our blog series, we discussed the basics of CDP reporting and its importance. Now we dive deeper into the specific aspects of the CDP questionnaire and look at how companies can effectively improve their ratings.

The CDP questionnaire in detail

Since its first edition in 2002, the CDP questionnaire has continuously evolved to meet the growing demands of investors and companies for accurate environmental information. In 2024, all previous questionnaires on climate, water security and forestry, including the additional questions on biodiversity and plastic use, were combined into one comprehensive questionnaire. This integrated approach reflects the interconnectedness of environmental issues and addresses the financial risks associated with them.

Focus of the questionnaire

• Climate: The focus here is on the disclosure of greenhouse gas emissions, energy consumption and mix, as well as governance, risk management and reduction strategies. The climate questionnaire is designed to harmonize with global reporting standards and regulations, which simplifies compliance.
• Water: Companies need to set out their water risks and opportunities, along with their governance practices and performance targets.
• Deforestation: This area focuses on the use and sourcing of forest risk commodities such as timber, soy and palm oil and requires information on associated risks and strategies.
• Biodiversity and plastics: Although these topics do not have their own questionnaire, they are included in relevant sections to encourage companies to assess their impacts and strategies in these areas.

The CDP rating system

The CDP's rating system, which ranges from A to F, is a crucial aspect for companies that want to be transparent about their environmental performance. An A rating, which is the highest rating, is awarded to companies that are considered leaders in their field and have demonstrably implemented measures to improve their impact on climate, water and forestry.

Here is a breakdown of each CDP rating:

• A-/A (Leadership): To receive an A for any questionnaire topic, companies must be recognized as a leader in that area and demonstrate that they have taken action to improve their climate, water and forestry impacts. Leading companies have also set science-based targets for their climate goals, have robust sustainability transition plans in place and consider climate, water and forestry impacts in their operations and value chains.
• B-/B (Management): To earn a B, companies must show that they are addressing the environmental impacts of their business. For a B-, they must provide evidence that they are managing some aspects of their environmental impact.
• C-/C (Awareness): C and C ratings are awarded to companies that are aware of the environmental impact on their business and how their operations affect the environment and people. The award of a C or C- depends on the level of awareness.
• D-/D (Disclosure): D or D- is the starting point for most companies that disclose. Companies receive points for each question answered. A D means that a company has disclosed some data points.
• F: An F will only be given to companies that fail to respond to a data request from one of the 300+ members of the CDP supply chain. So if you receive a data request, you should respond to it to avoid an F.

Maximize your CDP rating

The CDP rating is on a scale of A-F, with A representing the highest performance in the areas of climate, water and forestry. Here are some strategies to maximize your CDP rating:

1. Early planning: Start the process early to collect and verify all the necessary data. This prevents haste and possible errors that could negatively affect your valuation.
2. Comprehensive sustainability strategy: Integrate sustainability firmly into your business processes and governance structures. Define clear environmental targets and regularly monitor your progress.
3. Measurement and management of emissions: Establish robust procedures for recording and managing your emissions. Consider all relevant Scope 1, 2 and 3 emissions.
4. Stakeholder engagement: Encourage communication and collaboration with all stakeholders, including suppliers and customers, to ensure comprehensive data collection and utilization.

By applying these strategies, companies can not only improve their CDP score, but also improve their overall sustainability performance. In the next installment of our series, we will explore how Five Glaciers Consulting can effectively assist you with your first-time or repeat CDP reporting. Stay tuned for valuable insights that will help you successfully achieve your sustainability goals and target your CDP assessment.