CDP Disclosure Guide: Climate, Water, and Forests

Overview

CDP (formerly the Carbon Disclosure Project) operates the world's largest environmental disclosure platform, collecting climate change, water security, and deforestation data from thousands of companies on behalf of over 740 investors managing more than $136 trillion in assets. What began in 2000 as a simple request for carbon emissions data has evolved into a comprehensive disclosure system that shapes corporate environmental strategy worldwide.

CDP's annual questionnaire cycle collects detailed data on governance, risks and opportunities, strategy, targets, and performance across climate change, water security, and forests. Responses are scored on a scale from D- to A, with A-list designation conferring significant reputational benefits. The CDP score has become a widely referenced benchmark used by investors, procurement teams, and ESG rating agencies as a proxy for environmental management quality.

CDP has progressively aligned its questionnaires with other reporting frameworks, incorporating TCFD recommendations, ISSB standards, and TNFD-aligned nature questions. CDP also serves as the primary reporting platform for companies committed to science-based targets through the SBTi, and it has integrated EU Taxonomy-related questions for European reporters. This convergence means that CDP disclosure increasingly functions as a central hub connecting multiple regulatory and voluntary reporting requirements.

Who Does It Apply To?

CDP disclosure is technically voluntary, but strong market forces drive participation:

• Companies requested by investors: CDP's investor signatories request disclosure from companies in their portfolios. Receiving an investor request creates significant pressure to respond.
• Companies requested through supply chains: Over 400 major purchasing organizations use CDP Supply Chain to request environmental data from their suppliers. Non-response can affect supplier evaluation and procurement decisions.
• Companies committed to SBTi targets: CDP serves as the primary channel for annual progress reporting against science-based targets.
• Companies subject to mandatory disclosure: CDP has partnered with regulatory bodies in several jurisdictions and is exploring pathways for mandatory disclosure data to flow through its platform.
• Any company seeking ESG credibility: CDP scores influence ESG ratings from MSCI, Sustainalytics, and other providers. Non-disclosure typically results in lower ESG ratings.

In 2024, over 24,000 companies disclosed through CDP. The platform covers approximately 60% of global market capitalization.

Key Requirements

1. Climate Change Questionnaire The climate questionnaire covers governance, risks and opportunities, business strategy, targets and performance, emissions methodology, emissions data (Scope 1, 2, 3), energy, additional metrics, verification, carbon pricing, and engagement. It incorporates TCFD-aligned questions and ISSB-relevant data points.

2. Water Security Questionnaire The water questionnaire addresses water accounting, risks and impacts, procedures, targets, governance, strategy, and business impacts. It is particularly relevant for companies in water-intensive sectors including agriculture, textiles, mining, food and beverage, and energy.

3. Forests Questionnaire The forests questionnaire covers commodities associated with deforestation (timber, palm oil, cattle, soy, rubber, cocoa, coffee). It addresses traceability, certification, risk assessment, and targets for eliminating deforestation from supply chains.

4. Scoring Methodology CDP scores responses across four levels: Disclosure (D/D-), Awareness (C/C-), Management (B/B-), and Leadership (A/A-). Scoring assesses the completeness and quality of disclosure, awareness of environmental issues, management actions taken, and leadership through best practices like verified targets and value chain engagement.

5. Verification Requirements CDP awards higher scores to companies that obtain third-party verification of their emissions data. While not mandatory, verification of Scope 1 and 2 emissions is expected for Leadership scores. CDP accepts verification against ISO 14064-3, ISAE 3410, AA1000AS, and other recognized standards.

6. TNFD-Aligned Nature Questions Starting in 2024, CDP integrated TNFD-aligned questions on biodiversity, covering nature dependencies, impacts, and risk management. This signals CDP's evolution from a purely climate-focused platform toward comprehensive environmental disclosure.

Timeline & Milestones

Step-by-Step Compliance Roadmap

Step 1: Registration and Questionnaire Review

Register on the CDP platform and identify which questionnaires apply (climate, water, forests). Review the current year's questionnaire and scoring methodology—both are updated annually. Identify who is requesting your disclosure (investors, customers) and their expectations. Establish a cross-functional team to coordinate data collection and response drafting.

Step 2: Data Gathering and Gap Assessment

Map the questionnaire sections to your existing data sources. Identify where you have robust data and where gaps exist. Prioritize filling gaps that affect high-scoring questions. Key data requirements include verified GHG emissions, energy consumption, water withdrawal and discharge data, climate risk assessments, targets and progress metrics, and governance documentation.

Step 3: Response Drafting

Draft responses systematically, working through each questionnaire section. Be specific and quantitative wherever possible—CDP's scoring rewards specificity over generality. Use consistent data across sections (e.g., emissions figures should match between methodology and data sections). Reference external frameworks and standards (GHG Protocol, SBTi, TCFD) to demonstrate rigor.

Step 4: Quality Review and Submission

Conduct internal reviews to check for consistency, accuracy, and completeness. Compare responses against the scoring methodology to identify opportunities for score improvement. Ensure that all supporting documentation (verification statements, board minutes, policy documents) is available. Submit by the deadline—late submissions may not be scored.

Step 5: Score Analysis and Improvement Planning

When scores are released, analyze the scoring feedback to understand where points were gained or lost. Develop an improvement plan targeting specific scoring areas for the next cycle. Common improvement areas include obtaining third-party verification, setting science-based targets, implementing internal carbon pricing, and enhancing value chain engagement.

Common Pitfalls

Treating CDP as a tick-box exercise. Companies that rush through the questionnaire with minimal detail consistently score poorly. CDP's scoring increasingly rewards depth, specificity, and evidence of management action. A thoughtful, detailed response—even with some data gaps—scores better than a superficial complete response.

Inconsistent data across sections. The CDP questionnaire cross-references data between sections. Emissions figures, energy data, and targets must be internally consistent. Inconsistencies trigger scoring penalties and undermine credibility.

Ignoring the supply chain dimension. CDP Supply Chain is a growing program. Companies that ignore it miss both the supply chain score and the opportunity to demonstrate value chain engagement, which is rewarded in the main climate score. If your customers use CDP Supply Chain, non-response directly affects your commercial relationships.

Failing to respond to specific investor or customer requests. Non-response to CDP requests is visible to the requesting organizations. Investors interpret non-response as a governance red flag. If you receive a request, respond—even if your disclosure is partial, it demonstrates engagement.

How Council Fire Can Help

Council Fire helps organizations optimize their CDP disclosure to achieve scores that reflect genuine environmental management performance. We bring a strategic approach that connects CDP responses to broader sustainability strategy rather than treating disclosure as a standalone exercise.

Our team guides clients through the questionnaire structure, identifying high-impact sections where improved data quality or management action can meaningfully raise scores. We ensure consistency between CDP responses and other disclosures (CSRD, ISSB, SBTi progress reports), reducing duplication while maintaining coherence across platforms.

For organizations disclosing on water security and forests, Council Fire's ocean and biodiversity expertise informs responses on water stewardship, marine dependencies, and supply chain deforestation with a depth that generic ESG consultancies cannot match.

Council Fire's stakeholder engagement practice supports the supply chain and value chain engagement dimensions of CDP, helping clients develop programs that demonstrate leadership-level commitment to environmental management throughout their value chains.

Frequently Asked Questions

How do we improve our CDP score?

Score improvement starts with understanding CDP's scoring methodology, which is publicly available. The most impactful actions include: obtaining third-party verification of Scope 1 and 2 emissions; setting and validating science-based targets; demonstrating board-level governance of climate issues; reporting on climate-related financial risks using TCFD-aligned methodology; and engaging suppliers on emissions reduction. Incremental improvements across these areas move companies from Awareness to Management to Leadership tiers.

Should we disclose if our data is incomplete?

Yes. CDP scores non-response lower than partial disclosure. If your GHG inventory is incomplete or you lack data for certain questions, disclose what you can and explain the gaps. Demonstrating awareness of data limitations and a plan to address them scores better than silence. CDP's scoring methodology explicitly rewards disclosure effort and management intent.

How does CDP relate to mandatory reporting frameworks?

CDP is increasingly aligned with mandatory frameworks. Its questionnaires incorporate TCFD, ISSB, and TNFD elements. CDP has formal partnerships with the EU to serve as a potential reporting channel for CSRD data. For many companies, a well-prepared CDP response serves as a foundation or data source for mandatory disclosures. However, CDP-specific scoring requirements and mandatory reporting requirements are not identical—companies subject to regulatory mandates should not rely solely on CDP to satisfy compliance obligations.