Ready for It? New Integrated CDP Questionnaire to Reshape 2024 Sustainability Reporting

Companies disclosing climate-related and sustainability data through CDP (formerly the Carbon Disclosure Project) can expect a new look and feel to the reporting process this year. Whether an investor or customer asks a company to disclose, or a corporation elects to disclose ESG data of its own volition, companies will enjoy a more efficient experience and increased alignment with other global frameworks and ESG reporting standards. At the same time, reporting companies should plan on telling a more holistic story that may integrate more types of ESG information than they’ve disclosed in the past.

These changes stem from a major overhaul of the CDP platform: what used to be separate topics (climate, water, and forests) with separate questionnaires are now integrated into a single corporate questionnaire covering all the key environmental issues. The long-awaited change aims to drive greater corporate ambition toward a 1.5°C, nature-positive world by asking companies to collectively consider a fuller breadth of sustainability topics.

The update, completed on May 1, 2024, comes on the heels of rapid growth for the international non-profit. Over the years, CDP has evolved into the largest repository of corporate environmental metrics in the world and today is one of the most recognizable ESG reporting tools globally. Recently, the number of CDP disclosures have exploded, and in 2023, CDP experienced:

• A near tripling in the number of companies receiving disclosure requests for all environmental issues compared to 2022
• 5% increase in the number of companies disclosing climate information
• 2% increase in the number of companies disclosing water information
• 23,000+ companies disclosing climate, forests, and water security impacts

As companies get ready to respond to the new 2024 questionnaire format opening soon, they can prepare for reporting success by better understanding exactly what’s changing with CDP along with the implications of those changes for their companies and disclosure strategies.

The 2024 CDP corporate questionnaire introduces a holistic approach

The biggest change to CDP in 2024 is the integration of different environmental issues. The new format:

• Consolidates all environmental questions. The three previously separate CDP questionnaires (climate, water, and forests) are now wrapped into one CDP corporate questionnaire covering all three themes along with biodiversity, land use, and plastics. It’s important to note that while companies will answer just one integrated environmental questionnaire, they will still receive three separate theme scores for climate, water, and forests. Biodiversity and plastics questions will not be scored in 2024.
• Includes 11 different modules. The questionnaire will continue to use modules with the first six modules featuring an integrated approach to frame questions across all issues. These modules cover the following topics:
  1. Company introduction
  2. Identification, assessment, and management of dependencies, impacts, risks, and opportunities
  3. Risk and opportunity disclosure
  4. Governance
  5. Business strategy
  6. Environmental performance

The remaining five modules cover specific environmental issues in more depth:

1. 7. Climate change
   8. Forests
   9. Water security
   10. Biodiversity
   11. Plastics

• Removes the separate supply chain module. The new corporate questionnaire integrates supply chain questions into the main modules. Organizations will be asked to demonstrate visibility into and understanding of the various actors in their value chains including the interconnections between them. Companies should be able to effectively identify, assess, and manage their environmental dependencies, impacts, risks, and opportunities. They must also be able to identify priority or sensitive locations of operation, if applicable.
• Aligns with other standards and frameworks. To help simplify reporting efforts for companies, the new CDP corporate questionnaire more closely algins with other global frameworks and reporting standards. CDP is now fully aligned with IFRS S2 climate-related disclosures. The organization is continuing efforts to align further with the US Security and Exchange Commission (SEC) climate rule, European Sustainability Reporting Standards (ESRS), European Union Corporate Sustainability Reporting Directive (CSRD), and the Task Force on Climate-related Financial Disclosures (TCFD).
• Uses a new and improved technology platform. Beyond consolidating multiple questionnaires into one, the technology itself is streamlined and easier to use. The transformed CDP platform leverages a new portal specifically designed to promote and enhance a more efficient sustainability reporting process.
• Retires the minimum version and private markets questionnaire. CDP is launching a new questionnaire dedicated to the needs of small and medium enterprises. The SME questionnaire is available now and follows the same reporting timeline as the main questionnaire. It replaces the minimum version option of the corporate questionnaire and the private markets questionnaire previously available to qualifying smaller organizations. The new SME questionnaire promotes focused program development and disclosure on environmental topics while acknowledging the resource restraints and market expectations for smaller companies.

Companies can expect an easier ESG reporting process with greater focus on comprehensive action

For reporting companies, the implications of the 2024 CDP changes are three-fold. The new consolidated CDP questionnaire:

• Improves the efficiency and effectiveness of disclosing. The new set of questions eliminates redundancies in reporting via multiple questionnaires and promotes a more centralized strategy around managing climate, water, and forest topics.
• Encourages comprehensive action on environmental issues. The reporting strategy helps companies think about various environmental topics more holistically by integrating assessment, management, and disclosure across the key themes. Ideally, companies will begin to centralize their approach to managing these issues. This will require alignment of internal teams across functions including operations and facilities, risk, finance, and others, creating a more unified enterprise-wide approach to sustainability overall.
• Prepares companies for global mandatory disclosure. Thanks to greater alignment with other reporting standards, companies that disclose through CDP automatically disclose against the IFRS S2 standard for climate-related disclosures. Many CDP questionnaire responses can also be repurposed for TCFD, giving companies a major head start when it comes to meeting the expectations of this important framework. Specifically, the expanded risks and opportunities section in the new CDP corporate questionnaire encourages a double materiality approach, asking companies to assess dependencies, impacts, risks, and opportunities, an exercise that serves as a key steppingstone to meeting climate reporting requirements in the United States, European Union, and beyond. Ultimately, the new changes to the CDP questionnaire ensure that global capital markets can continue to rely on CDP for comprehensive and meaningful environmental data.

CDP Disclosures: Take advantage of more time to respond in 2024

With the new corporate questionnaire comes a new timeline, at least for this first year. The CDP questionnaire opens for companies on June 4, 2024. The scoring deadline is September 18, 2024.

The timeline will likely switch back to the original format in 2025, with a deadline in or around late July. The extended timeline for this year’s submission gives companies an opportunity to examine the revised questionnaire and identify areas for improvement or enhancement in their ESG and sustainability reporting efforts. This makes 2024 the ideal time for companies to embrace the integrated CDP format and upgrade their climate and environmental data reporting efforts while they have the extra time.

Related topics: Climate Risk Consulting