Carbon Disclosure Project

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The Carbon Disclosure Project (CDP) is an organisation based in the United Kingdom which works with shareholders and corporations to disclose the greenhouse gas emissions of major corporations. As disclosure of emission related data as CDP's primary activity, the quality of the data reported to CDP is key. In 2008, it published the emissions data for 1550 of the world's largest corporations, accounting for 26% of global anthropogenic emissions.[citation needed] The actual value of CDP's reports for investors and NGOs is contested.[1] Furthermore, the quality of the data on which CDP's reports are premised is questionable.[2]


Background

International agreements such as the Kyoto Protocol have proved problematic, and individual governments have been reluctant to develop stringent national limits on emissions for fear of big companies relocating their factories and jobs to nations with laxer regulatory regimes. The Carbon Disclosure Project (CDP) attempts to side step these national interests by focusing on individual companies rather than on nations. CDP brings together institutional investors to focus attention on carbon emissions, energy usage and reduction – wherever companies and assets may be located.

Some corporations have higher greenhouse gas emissions than individual nation states. Some leading companies have moved to become carbon neutral, but for others there is scope to reduce energy usage and greenhouse gas emissions by adoption of energy efficiency methods and business planning.

Mechanism

CDP works with 3,000 of the largest corporations in the world to help them ensure that an effective carbon emissions / reductions strategy is made integral to their business. This effort is imagined as taken seriously because of the size of the shareholdings backing CDP - 655 institutional investors with $78 trillion under management. CDP operates from Berlin, New York and London and has partners in 18 of the world's major economies which help deliver the programme globally. It has:

  • Established the world's largest repository[citation needed] of GHG emissions and energy use data accounting for some 26% of global anthropogenic CO2
  • Started to establish a globally used standard for emissions and energy reporting
  • Examined the 250 major electric utilities globally (high GHG emitters)
  • Active staff or partner organisations in the United States, China, Japan, Germany, United Kingdom, France, Canada, India, Brazil, Nordic region, South Africa, Netherlands, Australia and New Zealand among others
  • Works with corporations including WalMart, Tesco, Cadbury Schweppes, Procter and Gamble, and many others to measure emissions through the supply chain.

Much of the data elicited has never been collected before. This information is imagined as helpful to investors, corporations and to regulators in making informed decisions which take into account corporate risk from future government legislation, possible future lawsuits and shifts in consumers' perceptions towards heavy emitters. An estimated $27 trillion will be spent over the next 30 years on new energy related capital developments (power stations, fuel distillation plants, etc.). In line with ecological modernisation school of thought, CDP considers it vital that the right technologies are adopted. In particular:

  • Giving higher priority to energy efficient design in new capital projects
  • Declaring firm targets for capping and reducing corporate emissions
  • Identifying new low carbon business opportunities
  • Pricing in how, under different scenarios, the price of carbon emissions will shift the economics of alternative energy sources.

The process of companies having to respond to CDP delivers real changes in business practice resulting in lower energy use.[citation needed] In many cases this leads to a higher proportion of energy from renewable sources.

CDP has 501(c)3 charitable status through Rockefeller Philanthropy Advisors in New York and is a registered charity in the United Kingdom.

CDP Europe is a registered charity at the local court of Charlottenburg, Germany.

The Five CDP Programs

The CDP operates in most major economies worldwide and channels information and progress through five separate programs. The five programs include Investor CDP, CDP Public Procurement, CDP Water Disclosure, CDP Supply Chain and CDP Cities which all allow access to, and demonstrate theories of, environmental governance.

Investor CDP

The Investor CDP program includes the largest collaboration of investors in the world and serves to place relevant climate change information at the heart of its 551 institutional investors[3] to help drive financial decision makers migrate to low carbon economies. This is a form of market-based environmental policy which relies on economic incentives as the primary means to reduce carbon emissions. The CDP Investor program is an instrument which can harness market forces which links economic rationality to environmental outcomes, thus making it a very efficient and effective way of meeting environmental goals.[4]

CDP Public Procurement Program

The CDP Public Procurement Program is designed to enable local and national governments to ascertain the impact of climate change in their supply chain. Government spending equates to trillions of dollars a year which has the potential to make a dramatic impact on the market. This program is an effective way for local and national governments to ask their suppliers about energy use, greenhouse gas emissions and any subsequent global warming implications. This allows governments to better understand the climate change risks which in turn can help work towards building a low carbon government supply chain. Local and national governments are a significant phenomenon in environmental politics and have sufficient similarity to other transnational networks which highlight the dynamics and characteristics of network governance.[5] Governance networks are effective in bringing together civil society and private organisations in order to address and achieve common goals,[6] in this case lowering emissions, and the CDP helps to connect these different levels of national and local government.

CDP Water Disclosure

CDP Water Disclosure gathers critical water related information on behalf of 354 investors to drive investments towards sustainable water use.

CDP Supply Chain

CDP Supply Chain harnesses the collective purchasing power within 57 global corporations to encourage suppliers to measure and disclose climate change information. Carbon management is extended across the supply chain. This becomes hugely significant since over 50% of an average corporation’s carbon emissions are typically from the supply chain rather than within its four walls.[7]

CDP Cities

CDP Cities provides standardized reporting of emissions data, analysis of climate risks and opportunities and adaptation plans for cities around the world. The potential and need for this program is enormous since soon over half of the world’s population will live in cities.[8] CDP Cities provides an easy to use global platform based upon a simple questionnaire that allows city governments to publicly disclose their greenhouse gas emission data. One of the greatest values of the annual report, first released in June 2011, is to city leaders who can identify peers who are addressing similar risks and issues with new and innovative strategies for reducing carbon emissions and for mitigating risk from climate change.

Carbon Disclosure Leadership Index (CDLI)

CDP recognizes companies with high-quality disclosure as top scoring companies in the Carbon Disclosure Leadership Index (CDLI).

CDLI scores are calculated according to a standardized methodology which measures whether and how well, a company responds to each question. A company is awarded points if it reports its greenhouse gas emissions, but the actual amount of emissions does not affect its score. CDLI scores provide a valuable perspective on the range and quality of responses to CDP’s questionnaire.

Relevance of the CDP

Studies on the Carbon Disclosure Project

  • A. Harmes. The limits of carbon disclosure: Theorizing the business case for investor environmentalism. Global Environmental Politics, 11(2):98–119, 2011.
  • A. Kolk, D. Levy, and J. Pinkse. Corporate Responses in an Emerging Climate Regime: The Institutionalization and Commensuration of Carbon Disclosure. European Accounting Review, 17(4):719–745, Dec. 2008.
  • C.F. Jira and M.W. Toffel. Engaging Supply Chains in Climate Change. Manufacturing & Service Operations Management, 2013.
  • E.M. Reid and M.W. Toffel. Responding to Public and Private Politics: Corporate Disclosure of Climate Change Strategies. Strategic Management Journal, 30(11): 1157–1178, Nov. 2009.

Corporate Recognition of the CDP

The CDP represents 655 institutional investors, with a combined $78 trillion under management. In 2010 it was called "The most powerful green NGO you've never heard of" by the Harvard Business Review.[9] In 2012 it won the Zayed Future Energy Prize.[10]

Corporate Participants

See also

References

  1. ↑ A. Kolk, D. Levy, and J. Pinkse. Corporate Responses in an Emerging Climate Regime: The Institutionalization and Commensuration of Carbon Disclosure. European Accounting Review, 17(4):719–745, Dec. 2008.
  2. ↑ Analysis of corporate submission of data to voluntary carbon disclosure ranking projects questions the quality of data: relevant for understanding the CDP is then that while some corporate data may be disclosed, whether that data is any good is a completely different issue. Lippert, I. (2013). Enacting Environments: An Ethnography of the Digitalisation and Naturalisation of Emissions. PhD thesis, Augsburg University, Philosophisch-Sozialwissenschaftliche Fakultät, Augsburg. see Pages 256-279
  3. ↑ Carbon Disclosure Project. "Investor CDP". CDP. Retrieved 21 March 2011. 
  4. ↑ Mansfield, Becky (2006). "Assessing market-based environmental policy using a case study of North Pacific fisheries". Global Environmental Change 16: 29–39. 
  5. ↑ Betsill, Michelle; Bulkely, M (2004). "Transnational Networks and Global Environmental Governance: The Cities for Climate Protection Program". International Studies Quarterly 48: 473–493. 
  6. ↑ Backstrand, Karin (2008). "Accountability of Networked Climate Governance: The Rise of Transnational Climate Partnerships". Global Environmental Politics 8: 79–102. 
  7. ↑ The Carbon Disclosure Project, CDP. "Supply Chain Report 2011". Retrieved 4 March 2011. 
  8. ↑ Cohen, Joel, E (2003). "The Human Population: the next half century". Science 302 (5648): 1172–1175. doi:10.1126/science.1088665. PMID 14615528. 
  9. ↑ Andrew Winston (October 5, 2010). "The Most Powerful Green NGO You've Never Heard Of". Retrieved Oct 26, 2012. 
  10. ↑ ZaYed Future Energy Prize, 2012 Winners https://www.zayedfutureenergyprize.com/en/winners-and-runners_up

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