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CDP disclosure: 3 benefits and 3 tips

In 2021, a record 64% of companies (by global market capitalization) reported their environmental data through CDP (the global environmental disclosure platform). The message to remaining companies is clear: join the trend or get left behind. 

There’s enormous stakeholder demand. In 2022, investors with a combined US$130 trillion in assets, and purchasers with US$5.5 trillion in procurement spend, are asking companies to disclose through CDP.

Measuring your greenhouse gas (GHG) emissions is a fundamental step towards ESG leadership and carbon risk management. This is especially vital for companies and financiers in the commodities trading sector, where carbon-intensive supply chains house hidden carbon hotspots and risks.



Three benefits


Why make 2023 the year you disclose through CDP?

Benefit 1: Meet stakeholder demand for transparency and accountability

Trade finance providers and downstream customers are increasingly aware of the risks of high-polluting business. As they set their own climate goals and assess their risks, the spotlight is on commodity traders to reveal, pinpoint and address the true carbon impact of their operations and supply chains.

Trade finance providers face growing regulation with climate stress tests and proposed rules around mandatory reporting. To comply and show leadership, they need to encourage commodity traders to disclose and take action on their emissions, for example through green finance incentives

The most polluting sectors — and those who finance them — are facing growing scrutiny on the credibility of their carbon accounting and net-zero claims. CDP is the globally accepted mechanism for sharing this information in a standardized way; by disclosing, you’re making your efforts transparent, while showing your readiness to improve and learn from (or help define) best practice.

Benefit 2: Assess and understand your risks — especially in your supply chains

The commodities sector is at the heart of the climate challenge, and faces major disruption in the transition to a net-zero economy. Risks across the supply chain will have knock-on effects upstream and downstream, including stranded assets, reputational damage, mandatory reporting, and the legislative and financial impacts of carbon pricing.

But, there’s a wealth of potential opportunities for those who plan ahead. Managing your emissions and accelerating your journey to net zero can lead to benefits such as green finance opportunities, ESG leadership recognition, and innovation and competitiveness through meeting demand for low-carbon products. 

Benefit 3: Benchmark against peers and help inform the broader ecosystem

By making your climate-related data public through CDP, you’re providing key actors in the global economy with the information they need to take action (for example, to set stronger policies that help companies meet their climate goals), and you’re enabling benchmarking between peers. As well as emissions data, the CDP questionnaire asks for information about climate action plans, governance, targets, and supplier engagement, which helps stakeholders assess your readiness for the net-zero transition, beyond this year’s carbon footprint.

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Three tips


If this is your first time disclosing, ensure you get it right:

Tip 1: Start early

The disclosure platform usually opens in Spring and closes in September of each year. Gathering emissions data can be a time-consuming, multi-stakeholder process, so start as early as possible following the GHG Protocol guidance. Explore carbon accounting solutions to help speed things up, and let CarbonChain quickly and accurately produce your supply chain (scope 3) emissions inventory.

To be included in CDP’s annual scoring of companies, you need to disclose long before the deadline, usually around July. Volunteering to be scored on your disclosure helps demonstrate your accountability and commitment to a journey from ‘first-time discloser’ to ‘climate leader’. Find CDP’s full guidance here

Tip 2: Include supply chain emissions, with accuracy

Poor carbon accounting is under heavy scrutiny. This includes inaccurate calculations as well as excluding key sources of emissions, like scope 3. The challenges of collecting and calculating supply chain emissions are no longer an excuse, especially since alternatives to broad-based estimates now exist (from third party inventories and software, and supplier engagement programs). 

Become a CDP Supply Chain member to engage your suppliers in transparency and action for 2023, and, meanwhile, build up your scope 3 emissions inventory with our help

Tip 3: Disclose beyond your emissions

As far as possible, answer the CDP questionnaires for forests and water, as well as climate, or start making plans to gather the information for the 2023 cycle. In your climate disclosure, report on your wider climate action plan and strategy, including any science-based targets, climate-related lobbying, and commitments to changes in your business models, supplier engagement or governance. This will help spur action internally, and a more complete questionnaire will result in a better score from CDP. 


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Need help measuring your scope 3 emissions for CDP disclosure? Get in touch today. CarbonChain fills a critical data gap for emissions in extractive and agricultural commodity supply chains.

 

Picture of Adam Hearne
CEO and Co-Founder, CarbonChain