The CDP: Disclosing your business’s environmental sustainability

Disclosure for a sustainable business

Climate change is no longer a distant, dormant threat. It is no longer a problem for the next generation to deal with. Its impacts, not something that will be felt 50 years from now. Rather, global events over the past few months provide undeniable evidence that the adverse effects of climate change are here already.

Decades of inadvisable practices have done significant damage to our global climate and regional ecosystems. Just this past month, North America dealt with an unprecedented heat dome that resulted in hundreds of human lives lost and possibly, as many as a billion animals.

The time to take action, to reduce climate impact through carbon emissions may have already passed us. But choosing to follow the more optimistic predictions for climate change, we can take action now.

Companies, investors, cities, states and countries need to take immediate action to reduce carbon emissions in significant amounts. For us to not destroy the future for a slightly more convenient present, action is necessary.

And the action in reducing carbon emissions begins, first and foremost, with transparency. 

The CDP is a non-profit organisation that runs a global disclosure system for states, regions, cities, companies and investors to manage their environmental impacts. They maintain what is considered the world’s largest database of self-reported climate information.

Much like the GRI, they believe in transparency in business, specifically in the environmental impact of the activities of the aforementioned types of entities.

Who is the cdp for?

CDP described itself to run ‘the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts.’

For the case of investors and companies, its purpose is easier to see. Investors who wish to integrate ESG principles into their decisions may demand CDP data from companies they may consider investing in. And companies may disclose through the CDP to gain access to climate-conscious investors, along with other potential benefits like improved reputation, trust, and competitive advantage. 

However, why should cities and other similar organisations spend the time to disclose their environmental information?

There are clear benefits to doing it, as indicated by the 620 cities, 120 states and regions that report their data to the CDP every year.

Why should sustainable cities join the CDP?

CDP helps battle climate change

Disclosure helps demonstrate you are managing the climate risk and cutting emissions. Transparency is key in building trust among the public, and a city that discloses its carbon data is showing its clear intention to decrease its emissions. 

CDP helps share sustainability best practices

It allows for cities that are doing well to share their best practices, and for others to learn from them. This is a key advantage that will help cities from all around the world learn from the most sustainable cities and take action.

Get access to more investments

It allows the cities to showcase their projects to try and receive funding and investments. CDP even has a matchmaking program that pairs up cities with investors, aiming to enable projects in the environmental sustainability space. 

Why should sustainable businesses join the CDP?

Competitive advantage from being a green business

For companies, one of the most important benefits of joining the CDP is the potential competitive advantage. By joining the largest disclosure project for carbon emissions in the world, they have access to the tools to take steps to reduce their emissions and environmental impact. 

As more regulations get drawn and legislations get passed to reduce emissions, being part of the CDP helps a business stay ahead of the curve and be better than what the regulations demand.

Making environmental sustainability trasnsparent

Joining the CDP shows the company is transparent with its activities. This is key in protecting and improving your company’s reputation. 

This is especially important as concerns for the environmental impact of businesses continue to rise among the public. By being transparent with your company’s environmental impact and the steps you have taken to reduce emissions, the company can gain a significant reputational boost, which in turn, could be a competitive advantage.

CDP helps reduce risks with business sustainability

It helps your business uncover risks and opportunities that may be present in your organisation. 

There may, for example, be an opportunity to use alternative sources of energy like solar panels, which may result in significant savings in energy costs. Alternatively, there may be cases where the organisation is causing more emissions than is allowed by the regulations, which could result in significant fines and other losses. Disclosure helps companies to be ahead of the regulatory requirements and hedge the risk associated with environmental issues.

Joining the CDP helps with comparison against other green businesses

Disclosure helps you compare your performance against other companies and/or industry benchmarks. 

There are two primary benefits to this:

1. Your stakeholders can be aware of how your company is performing when it comes to environmental issues and make informed decisions.
2. Your company can understand how well it is doing compared to others in the same industry. This facilitates the process of identifying areas for improvement, which in turn, will assist in gaining a competitive advantage.

Joining the CDP to communicate sustainability

Entities that wish to join the CDP can head over to their website that can be found here.

The website has useful resources on the benefits of disclosure, along with information about the project. There are also multiple case studies explaining the benefits the companies enjoyed through reporting their climate data.

While the disclosure is something a company can do on its own, in some cases, there may be a lack of resources that are expendable for this purpose. We, at SUSTINARO, focus our expertise on sustainability communication, and disclosure is an important part of communicating your sustainability efforts.

Connect with us today, and learn more about how we can help in your sustainability journey.