Carbon Disclosure Project (CDP) is an independent not-for-profit organisation that relies on funding, donations and sponsorship to continue and expand its global initiative. It aims to inform investors of the risks and opportunities presented by climate change in the corporate world.
CDP’s goal is to make a channel of communication, supported by quality information, from which a rational response to climate change can emerge.
How CDP works
On behalf of its institutional investors, CDP seeks information on the business risks and opportunities presented by climate change and greenhouse gas emissions data from the world’s largest companies: 2,400 in 2007.
These companies include the largest listed companies in Asia, Australia, Brazil, Canada, France, Germany, India, Italy, Japan, New Zealand, Scandinavia, South Africa, Switzerland, UK, USA, and the Electric Utilities and Transport sectors.
CDP has become the gold standard for carbon disclosure methodology and process. CDP’s website is the largest database of corporate greenhouse gas emissions in the world.
The influence of CDP on the food and grocery sector
In February 2007, CDP issued its fifth information request on behalf of its 315 institutional investors with assets of $41 trillion under management.
The fifth report published in September 2007 survey received answers from 76% of FT500 companies listed globally and a total of 1,300 corporations. CDP has seen a large increase in responses to its questionnaires with the first request in 2002 receiving responses from only 45% of FT500 companies and 235 corporations. With the increasing number of investors and funding, CDP is becoming a globally recognised organisation.
This significant increase in participation of CDP’s information request shows the growing support for what they are doing within the corporate world. With many food and grocery companies featuring in the FT500, and with 42% of the food retail sector and around 30% of the manufacturers reporting that they have a CO2 reduction programme, it is likely more companies will follow suit.
In September 2007, Wal-Mart announced that it would be asking more than 60,000 suppliers to measure and report their greenhouse gas emissions.
Wal-Mart will first run a pilot involving around 30 companies in 7 product categories. Jim Stanway, head of Wal-Mart’s global supply chain initiatives has said ‘our objective here is to find efficiencies in the supply chain. If we remove carbon, which equates to energy, which equates to costs, we fulfil our objective of getting low prices to the customer and having a positive environmental impact’.
The announcement by Wal-Mart is likely to encourage other companies to do the same as well as motivate them to measure and reduce their own emissions as it could give them a competitive edge.
What is CDP hoping to achieve?
As CDP is making its requests and responses from corporations publicly available it is helping drive the activities of policymakers, consultants, accountants and marketers and therefore making businesses more transparent and accountable.
CDP believes that both investors and corporations have a huge role to play in militating against the effects of climate change and in driving emissions reductions globally. By encouraging corporations to measure so that they can manage and reduce emissions CDP plays a vital role in highlighting the risks and opportunities presented by climate change.
