Our previous newsletter CDP: Preparing for 2024, gave an overview of the CDP’s 2024 update, focusing on its alignment with reporting standards and frameworks.
Since then, CDP has released further information outlining how for 2024, the three separate questionnaires (Climate Change, Water Security and Forests) are now integrated into one general questionnaire, as well as updating on the changes to its disclosure portal platform.
What are the key changes to CDP in 2024?
CDP Activity Classification System (ACS) methodology is to be used on all companies to determine whether questions on Water and Forests will be presented
A new Integrated Questionnaire layout & structure
The disclosure of climate-related risks and opportunities has expanded to include Impacts and Dependencies in line with TNFD, as well as a broader scope of environmental aspects
Scoring Changes: Essential Criteria, previously just for the A-list, have been added to lower scoring levels
A new SME Questionnaire
Supply Chain questions have been incorporated throughout the questionnaire and will not continue to be a single standalone module as before
Plastics and Biodiversity sections will be presented to all disclosing companies, but will not be scored in 2024
How will a disclosers' theme or multi-environmental issues be determined in 2024?
In 2024, all disclosers responding to the full corporate questionnaire will continue to be presented with Climate Change data points and will also be presented with questions on Plastics and Biodiversity.
The CDP uses its Activity Classification System (ACS) methodology to determine whether questions on Water and Forests will be presented to a discloser based on how relevant these issues are to their business and activities. Unlike in previous years where this process was only used to determine requests to large public companies, it will now be applied to all companies, including those requested only by their customer(s). CDP Supply Chain members, banks, and private market investors will still be able to additionally request their stakeholders to disclose on any theme(s) they consider relevant.
Disclosers that have been requested to respond to Water and Forests questions in previous years will likely be presented with the themes again as part of the integrated questionnaire.
CDP's new Integrated Questionnaire layout & structure
To adapt to the new integrated questionnaire, CDP has introduced a new module structure (see image below). It starts with six ‘Integrated modules’ which will encompass ‘cross-thematic content’. The aim of this is to limit duplication on core questions such as Governance and Business Strategy, whilst streamlining reporting by allowing disclosers to address multiple themes (Climate, Water, and Forests) within a question.
After the ‘Integrated modules’, disclosers will be presented with ‘Environmental Performance Modules’ reflecting the themes deemed relevant by the CDP ACS, or specifically requested by supply Chain members, banks, or private market investors. ‘Theme-specific content’ such as environmental accounting data, targets, and actions by environmental topic will be reported in these modules.
Alignment to the TNFD and incorporation of Impacts and Dependencies
The topic Risk Management Processes (C2.1 - C2.2g) from CDP’s 2023 Climate Change Questionnaire has been incorporated into Module 2 – Identification, Assessment & Management of Dependencies, Impacts, Risks & Opportunities. Increased alignment with the Taskforce on Nature-related Financial Disclosures (TNFD) has driven several changes, with the focus on Risks and Opportunities shifted to include the assessment of Environmental Impacts and Dependencies.
Disclosers can report a single holistic process that includes all environmental dependencies, impacts, risks, and/or opportunities or disclose separate processes for each. For example, if the process to assess nature-related dependencies and impacts is different from the assessment of climate-related risks and opportunities, these can be reported in separate rows.
This update has also been extended to organisations value chains, with a new question added for all disclosers to determine whether they have assessed their suppliers according to their dependencies and/or impacts on the environment and to identify suppliers with substantive dependencies and/or impacts.
Disclosers will also be questioned on their assessment of the interconnections between environmental dependencies, impacts, risks, and/ or opportunities. This includes assessing the trade-offs, synergies, and linkages between environmental issues.
Changes have also been made in Module 3 – Disclosure of Risks & Opportunities, which relates to the remaining part of the Risk Management Processes (C2.3 – C2.4b) from CDP’s 2023 Climate Change Questionnaire. Again, these have been made to facilitate reporting in alignment with TNFD as well as IFRS S2 and ESRS. New questions have been added where disclosers will be able to report their vulnerability to physical and transition environmental risks as well as their alignment with environmental opportunities.
For more on the TNFD please refer to our Making CEN-SE of Nature (TNFD) article.
Scoring Changes and Essential Criteria
CDP will continue to score companies individually for Climate Change, Forests, and Water in 2024, with Plastics and Biodiversity remaining unscored.
The key update in scoring relates to the expansion of Essential Criteria for Climate Change. Previously this only applied to the A-list and was a checklist that had to be met to receive an A rating. However, in 2024 CDP is introducing an extra layer of essential criteria across scoring levels (Disclosure, Awareness, Management, and Leadership). The essential criteria clarify the critical data points an organisation must disclose to demonstrate progress towards environmental stewardship and will set a consistent baseline of reporting at each level of CDP scores. It also ensures that high-scoring companies are disclosing in the most consistent and comprehensive way.
SME Questionnaire
In 2024 the CDP is introducing a new SME questionnaire, aimed at making it easier to understand where SMEs should focus their attention, build capacity, and act. This new questionnaire will replace both the existing minimum version questionnaire as well as the pilot Private Markets SME questionnaire. It is designed for organisations with a headcount of below 500 and less than $50 million in revenue.
For the most part, it will align with the full questionnaire, but with fewer data points and simplified question formats. It will only be scored on Climate Change and will not include sector-specific content or variation, non-critical water and forests content, plastics and biodiversity content, and Mandatory alignment with frameworks and standards.
Further Information
If you would like to know more about CDP’s alignment to reporting standards and frameworks or how CEN-ESG’s end-to-end solution for CDP can help your business repport effectively, please reach out to the contact details below.
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