5 key learnings from the 2018 Carbon Disclosure Project Scores

5 key learnings from the 2018 Carbon Disclosure Project Scores

Key learnings from the 2018 results of the annual Carbon Disclosure Project Scores.

On January 22, the Carbon Disclosure Project (CDP) announced the results of its latest annual ranking. CDP is a leading provider in evaluating environmental performance in the areas of climate change, water security and deforestation based on a comprehensive methodology since 2000. By scoring businesses from A (best) to D- (worst), the CDP aims at improving corporate transparency and performance. The following key learnings can be inferred from this year’s results:

1. Record number of companies partaking in the ranking
In 2018, over 6,800 companies have been assessed by the CDP, perpetuating the constant increase of the number of companies reporting to the CDP. This record count resonates with the general development of growing corporate non-financial disclosure that can be seen worldwide in recent years.

2. The A-List: Majority of 140 companies excelling in climate change performance
A total of 174 companies (2017: 171 companies) were named in the 2018 A-List which honours companies for their environmental action. 136 of these made it to the climate change A-List, 31 were recognized for their action on water security and only 7 companies were ranked A for their performance addressing deforestation. However, only few companies could demonstrate outstanding performance in two or even all three areas.

3. Raw material industries are lagging behind
A closer look into the A-List reveals differing environmental performance on an industry level. While a majority of A-ranked companies stems from the financial, information technology and telecommunications industry, no companies operating in the more carbon intense coal, cement or agricultural commodities sector are represented in the list.

4. Alignment with the TCFD recommendations leading to new and more detailed requirements
In 2018, the CDP worked further towards the integration of the recommendation of the Task Force on Climate-related Disclosures (TCFD) into the CDP ranking system. Consequently, the new climate change questionnaire included more questions on forward-looking metrics, specific measures (e.g. exact emissions for each greenhouse gas instead for CO2-equivalents), scenario-based forecasts and the analysis of risks and opportunities related to climate change.

5. Evaluation becomes more sector specific
A major change in the scoring methodology occurred by introducing sector specific questionnaires. Since last year, companies have been provided with questionnaires tailored to their respective industries, which will be the new basis for their final score. This sector-based approach will offer better benchmarking opportunities and comparison to other sustainability rankings and ratings results that are also often industry specific, e.g. Dow Jones Sustainability Index by RobecoSAM.

According to the CDP, there will be no significant changes in the 2019 questionnaires. What will be new however is a specific guidance document to companies in the financial services sector to assist their disclosure until the introduction of a financial services sector specific questionnaire in 2020.

Get support for the 2019 cycle
The new CDP cycle starts already this month. If you plan to participate for the first time in 2019 or wish to improve your existing internal process and score, get in touch with us. In a non-binding conversation we will find out the best way to assist you. BSD supports companies who participate in sustainability rankings and ratings, such as the CDP or DJSI. We offer trainings, gap analyses, short- and mid-term recommendations (roadmap), briefing workshops for involved departments and a quality check for your response.
You can reach us under germany@bsdconsulting.com

BSD Expertise
• Several years of experience in improving DJSI/CSA and CDP responses in various industries
• Extensive expertise in designing and facilitating tailored workshops
• Large relevant network, e.g. with CDP and RobecoSAM (common expert roundtables)