This article was also published on GreenBiz.
So, you’ve gotten a request from your customer to fill out a CDP Supply Chain questionnaire. If you are like many companies, you have no idea who the CDP is or why your customer wants you to fill out their questionnaire. The survey looks long and there are a lot of things on it that don’t make sense. If this sounds familiar, read on, my friend! We’ve got the answers that will help to put it all into perspective.
- Who is CDP? CDP (formerly known as the Carbon Disclosure Project) is an NGO comprised of institutional investor, corporate, and municipal members. CDP is focused on furthering the availability of information on company efforts to manage the risks and opportunities associated with climate change, water, and deforestation. The CDP is working to make this information more readily available (and comparable) so that their members and the public can make informed decisions about environmental risks and opportunities in their supply chain or investments. In 2014, over 3,500 organizations reported to CDP.
- What is the purpose of the Supply Chain questionnaire? The Supply Chain Questionnaire is designed to help companies assess climate change risks and opportunities embedded in their supply chain. The Supply Chain questionnaire is the same as the Climate Change questionnaire that companies respond to on their own account, but it has an additional module at the end that helps your customer understand more about your sustainability initiatives, what portion of your carbon emissions are a result of the products or services you provide to them, and how open you are to collaborating with them on reduction projects.
- Why is my customer asking me to respond to this? Your customer is using the CDP supply chain questionnaire as a tool to evaluate climate change or carbon emissions risks (and opportunities) in its supply chain. Often large companies will segment their suppliers by industry or sector and for certain sectors, they will evaluate suppliers’ performance based on their CDP score. Your customer is likely interested in your company’s carbon footprint information as a means to calculating its own indirect (Scope 3) emissions. The customer could also be seeking opportunities reduce its emissions through collaboration with suppliers like you.
- How is my response scored? CDP Climate Change and Supply Chain responses are scored in two ways. You receive a “disclosure score” (0-100) that is based solely on how much information you provide and how complete your answers are. The disclosure score does not take into consideration the impact of the action(s), or lack thereof, that you report. If you get a disclosure score over 50, you will also receive a “performance score” which is in the form of a band (A-E). Your performance band is an indicator of how much your company is doing to actively and intentionally manage climate change risks and opportunities and to reduce carbon emissions.
- Who will see my response? You can designate your response as public or private. If you make your response public, it can be viewed by anyone who registers on the CDP system. If you designate your response as private, it will only go to the customers who have requested the response.
- How long will it take to develop a response? Depending on much information is available, how complex your organization is, and what help and resources you have, submitting a CDP response can take you anywhere from 10-20 man-hours to upwards of 100 man-hours or more. A complete response may also require the engagement of external resources to help with greenhouse gas inventories and verification (basically, auditing your information). Generally the first few years are the most challenging as you get your systems in place. Once you have a process, the reporting becomes more routine. CDP has tried to ensure that the questionnaires don’t change much from year to year. So, after year 2 it becomes more of an updating exercise.
- Do I have to respond? No. Responding is completely voluntary. Technically, anyway. Deciding whether or not to report should be a committee or senior level management decision that is based on the importance of the customer, availability of time and resources, and the competitive position your company is in. If you are on the fence, it may be helpful to look at who else in your industry is reporting.
- How can I get help? There are many ways to get help with your response. Sustrana offers services that range from completely outsourcing the response to providing education, guidance, and strategy support. The CDP also offers services through select partners. There is a wealth of free information on the CDP website, including every detail of their scoring methodology and sheets to help you estimate your own score. Prior to engaging any external help, it is a good idea to read through the guidance document provided by the CDP to get a better sense of what you might need. You should also determine how many hours can be dedicated to CDP reporting on the part of your team and the budget, if any, you have to bring in outside help.