Best practices to consider in CDP reporting
Preparation
Proper preparation requires companies to identify their primary goals with CDP reporting, assess key data needs, and determine whether the right processes are in place to enable the desired level of disclosures. For example, an organization will not be able to report on emissions data if an emissions estimation process does not exist, so companies might need to establish some critical processes before moving forward. In this stage, organizations should involve the right resources, including members from sustainability, financial reporting, environmental health and safety, legal and compliance, IT, and executive teams. Companies should aim to conduct planning and obtain buy-in from key resources far in advance of the CDP reporting deadline.
Data collection
Next, teams should review each of the reporting modules within the CDP questionnaire to identify data requirements. Companies can download editable questionnaires from CDP’s online response system (ORS), which should enable planning for data collection. This process can take time as teams work to identify reliable data sources to meet CDP reporting goals.
Data verification
Once all relevant data is obtained, teams should internally verify that data (consider an outside consultant to assist with this process), draft initial responses, and ensure draft responses are reviewed through the appropriate internal channels – a process akin to financial reporting. An additional consideration for CDP reporting entails third-party verification, which can be obtained for the entirety of the CDP report or specific topics such as emissions data, in which third-party verification is key to achieving a higher CDP score.
Data input
Finally, a designated team member should input responses using CDP’s ORS, which typically opens in May, with an end-of-July deadline. An appropriate member of management should then review and certify final inputs. Provided the right processes are in place, data collection, disclosure development, and review could take months – so setting aside ample time and establishing internal milestones can be critical. If the goal is to obtain a CDP score, submitting CDP responses at least a few days prior to the deadline can help avoid any last-minute setbacks, such as unexpected system outages.
Monitoring and improvement
At the conclusion of the CDP reporting cycle, establishing an ongoing monitoring process to evaluate current period results can help set the stage for the future. What progress does a company wish to demonstrate in the following months or years? What key processes and initiatives must be implemented or improved to enable such progress?
While CDP reporting won’t cover every ESG reporting need that organizations might encounter, the questionnaire process can be a great way to get started – and set the stage to meet future regulatory reporting needs.
