The CDP scoring system
CDP (Carbon Disclosure Project) scoring system is used to evaluate and score the environmental disclosure and performance of companies. The methodology evaluates companies on the basis of their responses to the CDP’s annual environmental disclosure questionnaire.
The questionnaire focuses on the management and reduction of greenhouse gas emissions, energy use, water use, deforestation and supply chain impacts.
The scoring methodology is based on a 100-point scale and takes into consideration various factors such as the level of disclosure, the quality and completeness of data, and the extent to which a company is managing and reducing its environmental impacts.
The scores are then used to rank companies and provide investors and stakeholders with an understanding of their environmental performance.
CDP scores are divided into 4 categories:
Disclosure score: The level of detail and accuracy of the company’s responses to the questionnaire.
Awareness score: The level of understanding of the company’s senior management regarding the risks and opportunities associated with climate change.
Management score: The extent to which a company has set targets, implemented strategies and measures to reduce its environmental impacts.
Performance score: The actual results achieved by a company in reducing its environmental impacts.
The CDP scoring methodology is regularly reviewed and updated to ensure that it remains relevant and reflects the latest thinking on sustainable business practices.
Why do we need scoring for CDP disclosure
Scoring is an essential part of the Carbon Disclosure Project (CDP) disclosure process because it provides a benchmark for corporate environmental performance and disclosure. The following are some of the reasons why scoring is necessary for CDP disclosure:
Encourages Companies to Improve: Scoring provides companies with an objective evaluation of their environmental performance and disclosure practices, which can encourage them to improve their environmental management and disclosure practices.
Provides Comparative Information: Scoring provides investors and stakeholders with comparative information on the environmental performance and disclosure practices of companies, making it easier for them to compare companies and make informed investment decisions.
Increases Transparency: Scoring helps to increase the transparency of a company’s environmental performance and disclosure practices, which is critical for building trust with stakeholders.
Facilitates Stakeholder Engagement: Scoring helps to facilitate stakeholder engagement by providing a common language and framework for companies to communicate their environmental performance and disclosure practices.
Supports Sustainable Investment: Scoring supports sustainable investment by providing investors with the information they need to assess the environmental risks and opportunities associated with investments.
Overall, scoring is an important part of the CDP disclosure process because it provides a benchmark for corporate environmental performance and disclosure, helps to drive improvements in environmental management and disclosure practices, and supports sustainable investment.
Download the latest CDP scoring methodology guidance – Click here
Criteria for scoring
The criteria for scoring used by the Carbon Disclosure Project (CDP) are designed to assess the environmental performance and disclosure of companies. Companies are evaluated based on the quality, quantity, and scope of their environmental information.
The following are some of the key criteria used by the CDP to evaluate companies:
GHG Emissions: Companies are evaluated on their understanding of their greenhouse gas (GHG) emissions, including their scope, sources, and methods of measurement.
Reduction Targets: Companies are evaluated on their commitment to reducing their GHG emissions and their efforts to set targets and implement strategies to achieve these reductions.
Energy Efficiency: Companies are evaluated on their efforts to improve energy efficiency and reduce their carbon footprint.
Water Management: Companies are evaluated on their efforts to conserve and manage water resources, reduce water use, and protect water quality.
Supply Chain: Companies are evaluated on their efforts to engage with their suppliers and manage the environmental impact of their supply chain.
Stakeholder Engagement: Companies are evaluated on their efforts to engage with stakeholders and communicate their environmental performance and disclosure.
Board-Level Governance: Companies are evaluated on their governance structure and processes for managing environmental risks and opportunities.
Data Quality and Verification: Companies are evaluated on the quality and accuracy of their environmental data, and their efforts to verify and validate this data.
The CDP scoring methodology is rigorous and transparent, and it is designed to encourage companies to improve their environmental performance and disclosure. Companies that score well on the CDP criteria are recognized for their efforts to reduce their environmental impact and to improve the sustainability of their operations.
The scoring levels
CDP scoring levels are designed to reflect the level of environmental disclosure and performance of companies. The scores are divided into the following five levels:
A – list: Companies that score within the top 9% of all respondents and demonstrate a high level of environmental leadership and best practice in managing and reducing their environmental impacts.
B – list: Companies that score within the next 20% of respondents and demonstrate a good level of environmental management and disclosure.
C – list: Companies that score within the next 30% of respondents and demonstrate a basic level of environmental management and disclosure.
D – list: Companies that score within the next 20% of respondents and have limited environmental management and disclosure.
F – list : score is given when a requested company fails to disclose through CDP.
These levels are designed to provide investors, stakeholders and consumers with a clear and easy-to-understand understanding of a company’s environmental performance and to encourage companies to improve their environmental practices.
Companies that score higher on the CDP rankings are generally viewed as being more environmentally responsible and sustainable, and are often more attractive to investors and customers who are increasingly concerned about the environment.
Allocation of points
A - list
The A-list is the highest level of recognition given by the Carbon Disclosure Project (CDP) to companies that demonstrate environmental leadership and best practice in managing and reducing their environmental impacts. Companies that score within the top 9% of all respondents are eligible to receive an A-list rating.
To receive an A-list rating, companies must provide comprehensive, accurate and transparent information on their environmental performance and have a strong commitment to reducing their environmental impacts.
This includes having robust greenhouse gas (GHG) reduction targets, detailed strategies for reducing GHG emissions, and demonstrated results in reducing their environmental footprint.
A-list companies are recognized for their commitment to sustainability and are often viewed as leaders in the field of environmental management and reduction.
This recognition can help to improve a company’s reputation and increase investor and customer confidence in its sustainability efforts.
The CDP A-list is widely recognized as a leading benchmark for corporate environmental performance and disclosure and is an important tool for investors and stakeholders to assess the sustainability of companies.
B - list
The B-list is the second-highest level of recognition given by the Carbon Disclosure Project (CDP) to companies that demonstrate a good level of environmental management and disclosure. Companies that score within the next 20% of all respondents are eligible to receive a B-list rating.
To receive a B-list rating, companies must provide meaningful information on their environmental performance and have a commitment to reducing their environmental impacts.
This includes having a basic understanding of their greenhouse gas (GHG) emissions, having set some targets for reducing GHG emissions, and having implemented some measures to reduce their environmental footprint.
B-list companies are recognized for their efforts to improve their environmental performance and for their transparency in disclosing their environmental information.
This recognition can help to improve a company’s reputation and increase stakeholder confidence in its sustainability efforts.
The CDP B-list is an important benchmark for corporate environmental performance and disclosure, and is used by investors and stakeholders to assess the sustainability of companies.
The B-list serves as an incentive for companies to continue to improve their environmental performance and to progress towards the A-list level of recognition.
C - list
The C-list is the third level of recognition given by the Carbon Disclosure Project (CDP) to companies that demonstrate a basic level of environmental management and disclosure. Companies that score within the next 30% of all respondents are eligible to receive a C-list rating.
To receive a C-list rating, companies must provide some information on their environmental performance and have a basic understanding of their greenhouse gas (GHG) emissions.
This includes having limited data on their GHG emissions and having limited strategies in place to reduce their environmental footprint.
C-list companies are recognized for taking the first steps in understanding their environmental impacts and for their efforts to improve their environmental performance.
This recognition can help to improve a company’s reputation and increase stakeholder confidence in its sustainability efforts.
The CDP C-list is an important benchmark for corporate environmental performance and disclosure, and is used by investors and stakeholders to assess the sustainability of companies.
The C-list serves as an incentive for companies to continue to improve their environmental performance and to progress towards higher levels of recognition, such as the B-list or A-list.
D - list
The D-list is the fourth level of recognition given by the Carbon Disclosure Project (CDP) to companies that have limited environmental management and disclosure. Companies that score within the next 20% of all respondents are eligible to receive a D-list rating.
To receive a D-list rating, companies must have limited information on their environmental performance and have a basic understanding of their greenhouse gas (GHG) emissions.
This includes having limited data on their GHG emissions and limited strategies in place to reduce their environmental footprint.
D-list companies are recognized for taking some steps towards understanding their environmental impacts, but they still have a long way to go in terms of improving their environmental performance and disclosure.
This recognition serves as an incentive for companies to improve their environmental management and disclosure practices and to progress towards higher levels of recognition, such as the C-list or B-list.
The CDP D-list is an important benchmark for corporate environmental performance and disclosure, and is used by investors and stakeholders to assess the sustainability of companies.
Companies that receive a D-list rating are generally viewed as lagging behind their peers in terms of environmental management and disclosure, and they may face pressure from stakeholders to improve their practices.
Performing cross-checks on scores
Cross-checking scores refers to the process of verifying and validating the information provided by companies in response to the Carbon Disclosure Project (CDP) questionnaire.
This process is designed to ensure that the information provided by companies is accurate and consistent with their actual environmental performance and disclosure practices.
The cross-checking process involves several steps, including:
Review of Supporting Documentation: The CDP reviews the supporting documentation provided by companies, such as energy consumption data, water usage data, and GHG emissions data, to ensure that it is consistent with the information provided in the questionnaire.
Data Verification: The CDP verifies the accuracy of the information provided by companies, using a variety of methods, including checking the data against publicly available sources, conducting on-site assessments, and conducting data quality audits.
Stakeholder Engagement: The CDP engages with stakeholders, such as customers, investors, and suppliers, to obtain their perspective on a company’s environmental performance and disclosure practices. This helps to validate the information provided by companies and to identify any discrepancies.
Consistency Check: The CDP checks the consistency of the information provided by companies with their reported performance and disclosure practices over time. This helps to identify any changes or trends in a company’s environmental performance and disclosure practices.
The cross-checking process is a critical part of the CDP scoring methodology and it helps to ensure that the information provided by companies is accurate and reliable.
Companies that score well on the CDP cross-checking process are recognized for their efforts to improve the transparency and accuracy of their environmental performance and disclosure practices.
“The CDP is a critical tool for companies to assess and manage their environmental impact, and to communicate this impact to stakeholders. It provides companies with a comprehensive framework for disclosing their environmental performance and helps to drive improvements in environmental management and disclosure practices.”
