News |
July 4, 2024

Measuring and Reporting Environmental Performance: The CDP Framework

3 Min. Read
a polluted water body with industrial structures in the background and a green graphical overlay

The CDP reporting framework is a leading standard in environmental sustainability reporting, named after the global non-profit organization CDP (Carbon Disclosure Project). While compliance with this standard is not mandatory, many organizations voluntarily participate in CDP reporting. This voluntary participation helps CDP create the world's largest publicly available sustainability-focused data pool. The organization collaborates with companies, municipalities, and other public leaders.

How Does CDP Work? 

Companies can participate in the reporting process by filling out one or more of CDP's forms in three categories: Climate Change, Water Security, and Forests. These forms include both general and sector-specific questions, and each topic has its unique scoring system. Participating companies are evaluated comparatively with other firms in the global database and receive a score.

In 2023, over 23,000 companies were part of CDP reporting, representing ⅔ of the total market value of all global markets.

Companies with significant environmental impacts and those looking to better manage risks are especially encouraged to engage in CDP reporting. Many sectors, from finance to energy, technology to retail, already benefit from this reporting method. Additionally, this method helps companies see how they can comply with upcoming regulations and legal frameworks. Investors also frequently use CDP reporting to gain insights into companies' performances.

What Makes CDP Different From Other Frameworks?

An important advantage of CDP reporting is that the inputs are used to create a global database. Companies participating in the reporting can log into CDP's online portal to follow industry trends. However, a significant challenge with CDP is the time required for reporting. Some sources state that properly answering CDP reporting questions requires an average of 40 days of work from 30 full-time employees. Therefore, it is crucial for organizations conducting CDP reporting to seek technological assistance and minimize the time spent by employees on this task.

CDP has also taken steps to address this challenge. With comprehensive changes made for the 2024 reporting period, a single form for all reporting categories was created to facilitate the data collection process. Additionally, CDP, recognizing that environmental sustainability is broader than climate change, water security, and forest conservation, is now adding metrics such as biodiversity and ecosystem protection to the reporting method. Similarly, the new CDP form created for SMEs aims to reduce the burden on participating companies by including fewer sector-specific details.

Another change introduced in 2024 is the integration of mandatory sustainability criteria from different regions of the world (EU, UK, Brazil, etc.) into the CDP system. This allows companies participating in CDP reporting to see how well their data aligns with other mandatory reporting standards in their regions. The most distinguishing feature of CDP is that it offers a global scoring system, allowing reporting organizations to compare themselves with their peers in a data-driven manner.

Where To Start With CDP Reporting? 

The CDP reporting process is being simplified yet made more comprehensive with the changes made for 2024. To keep up with global markets, it is highly beneficial for companies in Turkey to start working on this reporting system.

Although CDP reporting may seem like an additional workload for companies, it is a crucial tool that enhances corporate competitiveness, ensures compliance with regulations, and facilitates risk management. To start with CDP reporting, it is essential to understand what is expected from companies within the reporting framework, identify gaps and areas for improvement, establish a roadmap to address these gaps, and plan the data collection processes.