The ABCs of CDP – How to boost your CDP score and accelerate your ESG journey

With CDP 2024 scores newly released, many companies, including those Ricardo has been working with, have been rewarded with a higher score for their efforts to progress on their sustainability journey. However, there is still work to be done, data to be collated and further benefits to reap before submissions for next year’s scoring.

CDP disclosure has become a business norm with companies representing two-thirds of global market capitalisation from disclosing critical environmental data through CDP.   This equates to more than 23,000 companies from 130 countries.

CDP scores (A highest to D- lowest) provide a comparable, both year by year and between organisations and sectors, snapshot of how far organisations have progressed on their sustainability journey. 

Your CDP score not only helps to attract ESG investors who can compare your credentials against other companies but can also help to monitor and accelerate your sustainability journey. According to CDP, companies who disclose through the system reduce their direct emissions by 7-10% within two years of an investor request.

An improved CDP score can bring many benefits due to both the visibility of the score itself and the actions taken to achieve it:

Financial benefits

• Increased attractiveness to the sustainable investment community and access to capital from investors who prioritise strong environmental performance.
• Reduced exposure to future carbon pricing and environmental regulations.
• Lower operational costs through improved energy efficiency and resource management.

Market advantages

• Enhanced reputation and brand value.
• Competitive advantage in markets where sustainability is a key differentiator.
• Stronger positioning in supplier evaluations for companies that consider CDP scores.

Operational improvements

• Better risk management through improved understanding of climate and nature-related risks and opportunities.
• Improved data collection and reporting processes can benefit other areas of operations.
• Enhanced supply chain resilience through better environmental monitoring.

Stakeholder relations

• A sense of organisational pride and a reward for progress made for internal stakeholders. 
• Stronger relationships with investors that prioritise ESG criteria.

In short, your score matters. So, what can you do to improve it? Below are Ricardo’s recommended actions and how our experts can work with you to address each step and help you to increase your score.

1.    Familiarise yourself with any year-on-year changes to CDP’s system including the new integrated modules which require more comprehensive and quantitative data.

Each year CDP bring in changes to the system to encourage more robust disclosures and provide stakeholders with greater transparency. Ricardo’s team are CDP experts and will keep you up to date with all changes to the system explaining how they impact you and your best course of action to respond. 

2.    Ensure you have the correct data centrally collated and quality checked.

Your data will end up in the public domain, so accuracy is important to build trust with your stakeholders. Accuracy is also important for strategic decision making.  We can assist you to collect robust data, synthesise, and structure it for CDP reporting. We understand the challenges organisations like yours face when gathering this data and how best to address them. We can collate and store your data to build insights and to facilitate your submissions each year.

3.    Understand what your next score is likely to be.

Our experts can assess your data using our own CDP integrated tool and their deep expertise to predict your score based on your current circumstances and can forecast how it would improve after various actions are taken.

4.    Identify areas where you need to improve.

We provide strategic advice on what you need to do to reach the next scoring level and help map optimal pathways to achieve this.

Some of the most common areas where companies face challenges are:

• Scenario analysis – a new and complex area for many businesses. Find out more in our blog: How to master the art of climate scenario analysis for business planning.
• Scope 3 emissions – your value chain is responsible for the majority of your greenhouse gas impact and quantifying and addressing these emissions requires complex methodology and collaboration. Find out more: Scope 3 emissions management.
• Carbon pricing - many companies struggle to implement and report on internal carbon pricing (ICP) mechanisms (putting a value on the cost of a unit of CO2 emission) as it can depend on where you trade and your objectives. Set up correctly it will positively impact business operations and decision making. Ricardo’s experts are on hand to support you with your ICPs.
• Value chain engagement – collaboration is key to achieving climate change, your suppliers and customers need to come on the journey with you so you’ll need a strategy that understands the needs and motivations of these stakeholders, demands clear actionable requests from them, paces action to move quickly but not leave key stakeholders behind and is based on open two-way communication. Our experts know how to facilitate this collaboration with tools, information and mechanisms to enable cooperation and efficient progress.
  
  

5.    Prioritise areas for improvement according to both the impact they will have and how easily you can fund and action them.

Some actions are easier to implement, some have greater impact. To move forward confidently, you’ll need key information for decision making and investment in the best solutions. Focusing on data availability and quality means you’ll have robust information on which to base your decisions.

Conducting a double materiality assessment (DMA) will help you focus on the most impactful areas - double materiality was integrated into the CDP survey last year through the adoption of the European Sustainability Reporting Standards (ESRS) by CDP. The stakeholder engagement aspect of the DMA process also helps to prioritise disclosure areas, as it collates direct feedback on the perceived usefulness of disclosures.

Along with conducting DMAs, our sustainability experts can support you with further analysis, action planning, business cases and feasibility studies to provide that information and consultant’s engineer services to support you with the implementation of technology solutions. 

6.    Build capacity in your team to understand the requirements of CDP and how to action progress.

We provide dedicated CDP training sessions to upskill your team, enhancing their understanding of the CDP system, its requirements and how to get the best out of the reporting cycle.

7.    Correctly submit your data demonstrating the improvements you have made.

Ricardo’s experts can review and upload your data direct to the portal ensuring quality is checked, your responses are robust and everything is completed in the optimal way to maximise your score. 

Support and further information

Ricardo’s experts are here to help you with all aspects of CDP disclosures and boosting your scores through progressing your sustainability journey. Our support extends beyond a reporting cycle with many of our clients forming long-term strategic partnerships with us relying on us to keep them up to date on the latest developments, provide robust analysis and advice, champion the transformation process and celebrate successes together.

• Get in touch to start a conversation to see how we can work together to accelerate your sustainability journey and achieve a higher CDP score.
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