FAQ
CDP Frequently Asked Questions
With over a decade of corporate sustainability and CDP reporting experience, we've received many questions about the CDP questionnaire. Here, Dr. Sangwon Suh, our chief data scientist, gives the answers to the most frequently asked questions we've received over the years.
If this is the first time reporting, where would you recommend companies start? And what data is needed in-house?
If it's your first time reporting, I would start with the basics. The measurement of Scope 1, 2, and 3 greenhouse gas (GHG) emissions is not only a good starting point but also a key enabler for other sections of the CDP questionnaire. Measuring Scope 1 and 2 emissions requires primarily on-site fuel consumption and electricity consumption data.
Once they are done, I would move on to Scope 3 emissions. For most companies, Purchased Goods and Services is the most challenging and the most important Scope 3 category in terms of its contribution to overall GHG emissions. There are many approaches to developing a Scope 3 account. For example, you can use your spend ledger data or online CDP reporting platforms, such as Carbon360.
Once the emissions measurement is out of the way, I would recommend working on understanding the climate-related risks and opportunities, which also feeds into other sections. Once that is done, setting your emissions reduction target following, for example, the Science-Based Targets Initiative, would be an excellent next step forward, which would help boost your performance to the next level.
Is there a difference between carbon-neutral and net zero emissions?
Yes, there's quite a bit of confusion on this topic, and often companies are using these terms interchangeably. While these terms are still evolving, here is how I see the difference in a nutshell.
First, according to IPCC, net-zero refers to the situation where the anthropogenic GHG emissions by a company are equal to the anthropogenic removal of GHGs over a specific time. In simple terms, net-zero means that the amount of GHG emissions that a company is generating is equal to the amount of GHGs that the company is removing from the atmosphere through, for example, biological carbon sequestration or direct air capture (DAC), within the given timeframe. At a global scale, this is the only way that we can meet the 1.5 degree Celsius climate target. Carbon neutrality, as defined by the Publicly Available Specification (PAS) 2060 by the British Standard Institute (BSI), on the other hand, allows compensating residual GHG emissions using GHG emissions reduction credit or carbon offset.
Carbon offsets are not necessarily about removing GHGs from the atmosphere; they are about additional reduction of GHG emissions outside of one's value chain. An important difference is that a carbon-neutral system may add GHGs to the atmosphere, whereas a net-zero system can't. We recommend reading a recent report by the Science-Based Target Initiative on net-zero target setting for further details.
Are there specific sections that are weighted more heavily than others when scored?
The scoring is quite complex, and the interlinks between sections are essential to realize. There are different bands for disclosure, awareness management, and leadership levels. And the weights among different sections vary amongst different bands. There is an increasing emphasis on target setting in recent years. Still, target setting cannot be done without fulfilling some of the other sections, such as quantification of GHG emissions.
Have you found that nonprofit organizations also do CDP reporting?
CDP is targeting large corporations, especially Fortune 500 companies. However, nonprofits can report much like cities and municipalities. The same questions and processes apply to any organization - figuring out your Scope 1,2, and 3 emissions, understanding the risks and opportunities of climate change and setting targets.
Where would Zoom-related emissions (or other online meeting platforms) fall in Scope 1, 2, and 3 categories?
It really depends. Let's say we are working from home and participating in Zoom. From the corporate accounting point of view, the question to ask is who pays the bill for your Zoom and internet service? If your employer pays for the bill for your internet, Zoom account, and electricity, then it should be part of the company's Scope 2 and 3 emissions. If you're paying for Zoom, internet, and electricity, and if your employer has absolutely no control over your choice, it is currently not accounted for as part of the company's emissions.
How can I improve my CDP score?
One common misconception about CDP reporting is that your CDP score is based on how much GHG emissions you emit. However, CDP score is not about your organization's current level of emissions. It is about whether your organization is measuring GHG emissions, whether there is a process in place to measure and mitigate climate-related risks and opportunities, whether your organization has the management oversight on climate change, whether your organization has set meaningful target and is on track to meet it, etc. We go into more detail on this point and six others in our recently released report on insider tips to improve your CDP score.
What are scope 3 emissions, and why do they matter?
Scope 3 emissions are the GHG emissions from your upstream and downstream supply chains, employee commuting, and investment activities. They also include business travel and end-of-life treatment of products. These emissions often make up the majority of an organization's total GHG emissions. Learn more about scope 3 emissions in our video, Scope 3 categories explained.