CDP (formerly Carbon Disclosure Project)
Definition
CDP is a global non-profit that runs the world's leading environmental disclosure system for companies, cities, states, and regions. Through annual questionnaires, CDP collects and scores data on climate change, water security, and forests. Over 23,000 companies disclose through CDP, making it the most comprehensive source of self-reported corporate environmental data.
Why It Matters
CDP scores are widely used by investors and procurement teams as a benchmark for environmental transparency and performance. A high CDP score can positively influence ESG ratings, supply chain inclusion, and access to sustainable finance.
Related Terms
SBTi (Science Based Targets initiative)
The Science Based Targets initiative (SBTi) provides companies with a clearly defined pathway to reduce greenhouse gas emissions in line with the goals of the Paris Agreement. It validates corporate emission reduction targets against climate science to ensure they are ambitious enough. SBTi targets cover Scope 1, 2, and increasingly Scope 3 emissions, with a net-zero standard for long-term decarbonisation.
TCFD (Task Force on Climate-related Financial Disclosures)
The Task Force on Climate-related Financial Disclosures (TCFD) developed recommendations for companies to disclose climate-related financial information across four pillars: governance, strategy, risk management, and metrics/targets. Although the TCFD itself was disbanded in 2023 after its work was taken over by the ISSB, its framework remains influential. TCFD-aligned disclosure is now mandatory or recommended in many jurisdictions.
Scope 1 Emissions
Scope 1 emissions are direct greenhouse gas emissions from sources owned or controlled by an organisation. These include emissions from on-site fuel combustion, company vehicles, and industrial processes. They are the most straightforward emissions for a company to measure and reduce.
ESG Rating
An ESG rating is an assessment of a company's exposure to and management of environmental, social, and governance risks and opportunities. Provided by agencies such as MSCI, Sustainalytics, and S&P Global, ESG ratings aggregate data from corporate disclosures, news sources, and stakeholder reports. Ratings are used by investors to screen, compare, and evaluate companies on sustainability performance.