What is CDP Disclosure?

What is CDP Disclosure?

CDP (formerly the Carbon Disclosure Project) operates the world's largest environmental disclosure platform, collecting climate change, water security, and deforestation data from companies, cities, states, and regions on behalf of investors and purchasing organizations. Founded in 2000, CDP sends annual questionnaires to thousands of companies requesting detailed environmental data, scores responses from A (leadership) to D− (disclosure), and makes the data available to its signatory investors and supply chain members. More than 22,100 companies disclosed through CDP in 2025.

Why It Matters

CDP holds a unique position in the ESG ecosystem as both a data collection platform and a scoring system with real market consequences. In the 2026 cycle, more than 540 financial institutions with over $110 trillion in assets asked companies to disclose through CDP, and they use the data for investment analysis, engagement, and stewardship. CDP data also feeds ESG ratings: MSCI lists CDP responses among its data sources, and S&P Global lets companies cite a public CDP response as evidence in its Corporate Sustainability Assessment. Failing to respond to CDP—or scoring poorly—can have knock-on effects across ESG evaluations.

The supply chain program amplifies CDP's reach. More than 270 major purchasing organizations use CDP Supply Chain to request environmental data from their suppliers. Companies that ignore CDP investor requests might calculate that the reputational impact is manageable, but ignoring a request from a customer that represents 15% of revenue is a different calculation entirely. The supply chain program has been particularly effective at extending disclosure into mid-market and privately held companies that don't face direct investor pressure.

CDP's alignment with regulatory frameworks makes it increasingly indispensable. In 2024 CDP replaced its separate questionnaires with a single integrated questionnaire built on the ISSB's IFRS S2 climate standard, so companies can prepare CDP and ISSB-aligned disclosures through one process. CDP also maps to TCFD, GRI, and ESRS, positioning itself as a practical reporting channel that feeds multiple frameworks. For companies facing the challenge of multi-framework reporting, CDP serves as an efficient single-entry point for environmental data.

The scoring methodology creates competitive dynamics. CDP publishes an annual "A List" of companies achieving the highest scores, generating significant media coverage and peer pressure. Companies on the A List receive recognition from investors and customers; companies scoring poorly face engagement from CDP signatory investors pushing for improvement. This naming-and-shaming dynamic—unusual for a voluntary disclosure system—has been remarkably effective at driving year-over-year improvements in corporate environmental reporting quality.

How It Works / Key Components

Since 2024 CDP has used a single integrated questionnaire with three scored themes: climate change, water security, and forests (questions on biodiversity and plastics are asked but not scored). Climate change is the most widely answered theme, covering governance, risk management, strategy, GHG emissions (Scope 1, 2, and 3), energy, targets, carbon pricing, and value chain engagement. Water Security covers water risk assessment, water accounting, governance, and strategy. Forests covers commodity-specific deforestation risk for timber, palm oil, soy, cattle, rubber, cocoa, and coffee.

The scoring methodology evaluates four levels: disclosure (is the company reporting?), awareness (does it understand its environmental position?), management (is it taking action?), and leadership (is it demonstrating best practice?). Companies progress from D/D− (disclosure level) through C/C− (awareness), B/B− (management), to A/A− (leadership). The scoring is sector-adjusted, meaning companies are benchmarked against industry peers. In the 2025 cycle, 877 companies, about 4% of the nearly 20,000 scored, received an A.

The questionnaire structure is extensive. The full version is organized into 13 modules, and a shorter version is available for small and medium-sized companies. Key modules include: governance (board oversight, management accountability), risks and opportunities (climate risk assessment process, identified risks with financial quantification), emissions (Scope 1, 2, 3 with methodology disclosure), targets (absolute and intensity targets, science-based target status), and strategy (transition plans, scenario analysis, carbon pricing assumptions).

CDP's data powers the broader ecosystem. ESG rating agencies pull CDP data directly into their models. Academic researchers use CDP's dataset—one of the largest longitudinal corporate environmental databases—for climate finance and corporate behavior studies. Policymakers reference CDP data for regulatory development. CDP is also a founding partner of the Science Based Targets initiative. This network effect means CDP data flows into virtually every ESG evaluation and investment decision globally.

Council Fire's Approach

Council Fire helps clients optimize their CDP disclosure strategy and scoring through questionnaire preparation, data quality improvement, and response optimization. We identify the specific disclosure gaps and management actions driving score limitations, develop multi-year improvement roadmaps targeting A-list performance, and ensure CDP responses align with and feed into ISSB, ESRS, and other regulatory reporting obligations.

Frequently Asked Questions

How much does CDP scoring affect my company's ESG ratings?

Significantly. MSCI lists CDP responses among the data sources for its ESG ratings, and S&P Global lets companies cite a public CDP response as evidence in its Corporate Sustainability Assessment. Gaps in disclosure leave rating agencies with less to credit. Improving from a C to a B on CDP climate can lift ESG ratings across multiple agencies, with downstream effects on investor screening and sustainability-linked financing terms; some indexes, such as STOXX Global Climate Change Leaders, are built from the CDP A List. The leverage effect of CDP data into multiple ratings makes it one of the highest-ROI disclosure investments a company can make.

Is CDP disclosure mandatory?

CDP disclosure itself is voluntary—no law requires companies to respond. However, several dynamics make it functionally mandatory for large companies: investor expectations (more than 540 financial institutions with over $110 trillion in assets requested disclosure in 2026), customer requirements (270+ supply chain members), ESG rating implications, and increasing regulatory alignment. The EU's CSRD doesn't mandate CDP specifically, but CDP's alignment with ISSB and ESRS means much of the data prepared for CDP can be reused in mandatory reports. For practical purposes, any company in the S&P 500, FTSE 350, or ASX 200 faces such strong market pressure to disclose that non-response carries significant reputational and financial consequences.

What's the most effective way to improve my CDP score?

Focus on the management and leadership scoring tiers, which carry the most weight. Common score-limiting factors include: missing Scope 3 emissions (calculate and report even with estimates), absence of validated science-based targets (commit to SBTi), incomplete climate risk assessment with financial quantification, lack of board-level climate competence disclosure, and insufficient value chain engagement. The single highest-impact action for most companies is committing to and validating a science-based target, which unlocks points across multiple scoring modules simultaneously.