Anthesis’ Emma Armstrong and Manisha Paralikar outline what you need to know about the Carbon Disclosure Project's ‘Reimagining Disclosure Consultation’ and their upcoming 2018 questionnaire.
After a few years of relative stability, big changes are afoot for CDP's Climate Change questionnaire as CDP ‘reimagines disclosure’ in 2018, and beyond, with the goal of delivering improved data and assessments for investors and other stakeholders.
CDP recently completed the second public consultation on its draft 2018 questionnaires and will be utilizing the feedback to finalize the questionnaires by mid-December.
What are CDP’s proposed changes to the 2018 questionnaire?
Recognizing that the questionnaires are currently in draft form, here are some important things to note about the proposed changes:
Transition to a more sector-specific approach:
In 2018, companies from the following sectors will be asked to respond to customized Climate questionnaires – Energy, Transport, Materials, and Agriculture.
Companies in all other sectors will respond to the General Climate questionnaire in 2018.
Similarly, the Water and Forest questionnaires are moving in the same direction with a sector-specific approach from 2018.
Alignment with the Task Force on Climate-related Financial Disclosure (TCFD):
This means a greater emphasis on elements such as board oversight; climate risk assessment and management (including integration into a company’s business planning processes); the use of forward-looking scenario analysis to determine the resilience of a company’s strategy to climate risks and low-carbon transition planning.
An updated questionnaire structure:
The 2018 Climate questionnaire draft features new section headings, a new question numbering convention, and significant re-ordering of content - in part to align more closely with the TCFD structure.
A new, tiered approach:
To encourage participation and ease first time reporters into the program, CDP is introducing two tiers of questionnaires: Full and Minimum.
Companies will be asked to complete the Minimum tier questionnaire(s) if it is their first year of responding to CDP, or they meet certain demographic criteria.
In addition, small and medium sized enterprises (SMEs) responding through the CDP Supply Chain program will be asked to answer a reduced number of questions.
Upgrades to CDP’s IT systems:
This includes a new disclosure platform that CDP states will exhibit better performance, tagging of questions (e.g. sector specific, highlighting of alignment with other frameworks such as GRI and DJSI, indicating which supply chain members are interested in certain disclosures) and more guidance within the platform.
So, how can you prepare following CDP’s Reimagining Disclosure Consultation?
While the questionnaires are not yet finalized, CDP’s intent to align with the TCFD is clear. There are several actions that individuals with responsibility for CDP reporting can take in preparation:
- Manage expectations: communicate internally about the significant proposed changes to the CDP survey in 2018, which may trigger additional effort in order to answer new and modified questions.
- Familiarize yourself with the TCFD recommendations: take the time to review important guidance and documentation on the TCFD. We’ve provided several useful links at the bottom of this blogpost.
- Complete a gap analysis: make use of the draft survey questionnaire to identify key gaps, as well as where your company may be well positioned to respond to any new and expanded questions.
- Engage key internal stakeholders: CDP’s alignment with TCFD means that internal groups such as risk, finance, compliance and governance will likely become more important contributors in regards to your current CDP process. It will be important to engage with these groups, both when completing a gap analysis, and to determine how to best prepare for the TCFD-related changes.
- Prepare for the disclosure timeline: while the questionnaires will be published to investors in November, they are due to be released on the CDP website in December, alongside supporting guidance. The scoring methodology will be released in February/March and the disclosure platform in March/April.
What is Anthesis doing to support its clients for the Carbon Disclosure Project changes?
Anthesis provided feedback to the CDP consultation process, aiming in part to ease the reporting burden on companies, e.g. by avoiding duplicative questions and ensuring a logical flow to the questions.
We will provide updates - including through future blogposts - as CDP communicates additional information about the changes ahead. We will also reach out to each of our CDP clients to help them understand the changes and discuss how we might be of assistance in preparing for next year’s disclosure cycle.
In the meantime, if you have questions, we’d love to hear from you. Please contact CDP-Support@anthesisgroup.com, or alternatively, get in touch using our fill out form below.
Links of interest:
- The Task Force on Climate-related Financial Disclosure
- Technical Supplement: The Use of Scenario Analysis in Disclosure of Climate-related Risks and Opportunities (June 2017)
- Note the Appendix for several resources related to scenario analysis
- CDP’s Reimagining Disclosure Consultation
- CDP Consultation Briefing Document