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CDP (formerly the Carbon Disclosure Project) is an international non-profit organisation based in the United Kingdom, Japan, China, Germany, Brazil and the United States that helps companies, cities, states, regions and public authorities disclose their environmental impact. It aims to make environmental reporting and risk management a business norm, driving disclosure, insight, and action towards a sustainable economy.[3] In 2024, nearly 25,000 organisations disclosed their environmental information through CDP.[4]

Key Information

Background

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CDP piggybacked on the Global Reporting Initiative's concept of environmental disclosure in 2002, focusing on individual companies rather than on nations. At the time CDP had just 35 investors signing its request for climate information and 245 companies responding. According to the organisation, as of 2024, companies worth two thirds of global market capitalisation disclose through CDP.[5][4]

Mechanism

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CDP works with corporations, cities, states, and regions to help develop carbon emissions reductions strategies. The collection of self-reported data from the companies is supported by over 800 institutional investors with about US$100 trillion in assets.[6]

CDP's programs

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Climate change

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CDP's climate change program aims to reduce companies' greenhouse gas emissions and mitigate climate change risk. CDP requests information on climate risks and low carbon opportunities from the world's largest companies[7] on behalf of over 800 institutional investor signatories with a combined US$100 trillion in assets.[8][non-primary source needed]

Water

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The program motivates companies to disclose and reduce their environmental impacts by using the power of investors and companies.

Supply chain

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In 2016, some 90 organizations, representing over US$2.5 trillion of purchasing power, requested that their suppliers disclose information on how they are approaching climate and water risks and opportunities. Data was gathered from over 4,000 suppliers worldwide,[9][non-primary source needed] who reported over US$12 billion worth of savings from emission reduction activities.[10]

Forests

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CDP's forests program has over 290 signatory investors in its network, which collectively represent about US$19 trillion in combined assets. CDP collects information about the four agricultural commodities responsible for most deforestation: timber, palm oil, cattle and soy. CDP's forests program was first set up by the UK Government's Department for International Development via the Global Canopy Programme and the JMG Foundation.[11][non-primary source needed]

Cities

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CDP Cities[12] provides a platform for cities to measure, manage and disclose their environmental data. More than 500 cities are now measuring and disclosing environmental data annually.[13] The potential and need for this program is enormous since over 56% of the world's population now live in cities.[14] CDP Cities provides a global platform based upon a simple questionnaire that allows city governments to disclose their greenhouse gas emission data publicly. 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 Action initiative

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Carbon Action is an investor-led initiative which shows how companies in investment portfolios are managing carbon emissions and energy efficiency.

Over 300 investors with US$25 trillion in assets under management ask the world's highest emitting companies to take three specific actions in response to climate change:

  • Make emissions reductions (year-on-year)
  • Publicly disclose emission reduction targets
  • Make ROI-positive investments in projects

CDP launched a new research series at the beginning of 2015, taking a sector by sector approach.[15]

Leadership indices

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CDP recognizes companies with high-quality disclosure in its annual scoring process, with top companies making it onto CDP's so-called A-list.

Scores are calculated according to a standardized method which measures whether and how well a company responds to each question. A company goes through four main steps, starting with disclosure of their current position, moving to awareness which looks at whether a company is conscious of its environmental impact, to management, and finally leadership.[16]

A high CDP score is supposed to be indicative of a company's environmental awareness, advanced sustainability governance and leadership to address climate change.

Organisational structure and governance

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CDP includes three separate legal entities registered in the United Kingdom, Belgium and the United States of America. In the United Kingdom, CDP Worldwide is a charity registered with the Charity Commission for England and Wales.[17] CDP Europe is a registered charity in Brussels, Belgium and Berlin, Germany.[18] CDP North America, Inc is an independent 501(c)(3) entity based in New York City. The three entities have independent trustee boards.[19]

Funding

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CDP's funding comes from a combination of government and philanthropic grants (44.4%) and a mixture of membership fees, administrative fees, sponsorships and data licensing.[20] In Europe, CDP is around 30% funded by the LIFE programme of the European Commission.[21]

Relevance of CDP

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Proponents claim that disclosures are helpful for investors,[22] corporations, and regulators in making informed decisions on taking action towards a sustainable economy by measuring and understanding their environmental impact and taking steps to address and limit their risk to climate change, deforestation and water security.

Studies on CDP

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Corporate recognition of CDP

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In 2010, CDP was called "The most powerful green NGO you've never heard of" by the Harvard Business Review.[23] In 2012 it won the Zayed Future Energy Prize.[24]

See also

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References

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Revisions and contributorsEdit on WikipediaRead on Wikipedia

Carbon Disclosure Project

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The Carbon Disclosure Project (CDP), now operating simply as CDP, is a global non-profit organization founded in 2000 in that runs an independent, voluntary environmental disclosure system for companies, cities, states, regions, and investors to report data on , , forests, and risks and impacts. Initially established by a group of institutional investors including Paul Dickinson and to compel corporate reporting, CDP has expanded its scope to standardize environmental data collection through annual questionnaires, scoring responses from D to A, with A denoting in transparency and performance. CDP's system processes disclosures from over 23,000 organizations in 2023, covering entities that manage assets worth more than half of global GDP, thereby influencing investor decisions and corporate strategies on environmental management. Achievements include a 30% increase in companies earning top A List scores in the 2024 cycle compared to prior years, signaling growing adoption of rigorous reporting practices, and the provision of data that underpins regulatory frameworks like the EU's Corporate Sustainability Reporting Directive. However, reliance on self-reported information has drawn criticism for potential inconsistencies, with studies finding disparities in up to 20% of cases between CDP emissions data and companies' own sustainability reports, raising questions about verification and the risk of greenwashing where disclosures may exaggerate environmental efforts without corresponding reductions in impacts. Despite these limitations, CDP remains a primary benchmark for environmental transparency, though empirical evidence linking disclosures directly to causal reductions in emissions remains mixed, as participation is voluntary and does not mandate action beyond reporting.

History

Founding (2000)

The Carbon Disclosure Project (CDP) was established on December 4, 2000, in , , as a not-for-profit initiative aimed at compelling corporate disclosure of and risks. It was founded by Paul Dickinson, an ESG advocate and former corporate communications specialist, and , an environmental finance pioneer, along with a small team of collaborators. The founding occurred amid growing investor concerns over climate-related financial risks, with the organization positioning itself as the first to harness market mechanisms—specifically, collective investor pressure—to drive standardized environmental reporting from companies. At inception, CDP's core methodology involved coordinating institutional investors to issue a single annual request for emissions data, sent via letter to thousands of major corporations worldwide. In its debut year, a nascent team secured endorsements from 35 investors managing approximately $4.5 trillion in assets, who jointly queried around 5,000 global companies for details on their carbon footprints, strategies, and associated . This investor-backed approach was designed to create in information gathering, reducing redundancy for companies while providing asset owners with actionable data to inform investment decisions, rather than relying on fragmented or voluntary self-reporting. The founding event reportedly took place at , the residence of the UK Prime Minister, underscoring early governmental interest in climate transparency, though CDP operated independently as a private initiative. Initial responses were modest, with only a fraction of targeted firms replying, but the project laid the groundwork for transforming environmental data into a normative practice by emphasizing verifiable, comparable disclosures over regulatory mandates.

Early Expansion (2000s)

In 2002, the Carbon Disclosure Project issued its inaugural investor-backed request for voluntary disclosure of and strategies, supported by 35 institutional investors representing and targeting major corporations, which elicited responses from 245 companies. This marked the operational launch following the organization's 2000 founding, focusing initially on the largest emitters among indices like the FTSE Global 500 to standardize environmental data collection. Response rates among targeted firms improved steadily through the mid-2000s, rising from 47% in 2003 to 77% by 2008 for key cohorts such as the Global 500, reflecting growing corporate recognition of investor demands for verifiable emissions data amid rising awareness of climate risks. CDP expanded its annual questionnaires to encompass not only direct emissions (Scope 1 and 2) but also impacts (Scope 3), prompting disclosures that revealed varied reduction targets—such as absolute cuts or intensity improvements—and strategies like energy efficiency investments. By the late , participation had scaled dramatically, with CDP coordinating on behalf of institutions managing over $57 in assets to query 3,000 companies worldwide in , up from initial narrow outreach. The cycle achieved an 82% response rate from the Global 500 (409 respondents), the highest to date, alongside extensions to regional indices like and FTSE 350, and initial forays into emerging markets such as , , and , where disclosures highlighted operational vulnerabilities to resource . This growth solidified CDP's role in bridging capital with corporate , though varied due to self-reported metrics lacking third-party verification at the time.

Rebranding to CDP and Global Growth (2010s–Present)

In 2013, the Carbon Disclosure Project rebranded to CDP to encompass a wider array of environmental disclosures beyond carbon emissions, including and forests. This shift reflected the organization's evolving scope, as initial focus on expanded to address interconnected environmental risks. The 2010s marked significant program expansions, with the launch of the CDP Water Disclosure initiative in 2010 to assess corporate water risks and management practices. Subsequently, the Forests Program was introduced around 2011, enabling disclosures on and forest risk commodities, while reporting gained traction to engage suppliers on environmental impacts. These developments drove global adoption, with participant numbers growing steadily; by 2022, over 18,700 companies—representing half of global —disclosed data through CDP. Into the 2020s, CDP's reach extended beyond corporations to include cities, states, and regions, with over 1,100 such entities disclosing by 2021, covering substantial portions of global population and GDP. Disclosure volumes surged, rising 24% in 2023 to exceed 23,000 companies from 18,700 in 2022, and reaching a record 24,800 in 2024, supported by over 680 investor signatories managing $130 trillion in assets. In January 2025, CDP announced a further brand evolution emphasizing actionable insights for an "Earth-positive future," building on its disclosure foundation to prioritize environmental outcomes.

Mission and Objectives

Core Goals and Methodology

CDP's core goals center on fostering environmental transparency to enable data-driven decisions that balance economic, social, and planetary interests, with a focus on mitigating risks from , , and . As a global non-profit, it aims to build the world's most comprehensive environmental disclosure database, integrating standards like ISSB and TNFD, to surface actionable insights for companies, investors, cities, states, and regions. This transparency is intended to protect future generations by encouraging organizations to identify environmental dependencies, risks, impacts, and opportunities, ultimately driving reductions in emissions and resource overuse. The methodology relies on an annual, voluntary disclosure process where CDP, on behalf of over 640 capital markets signatories managing $127 trillion in assets, requests detailed responses from targeted entities via standardized questionnaires. These integrated questionnaires cover three primary themes—, , and forests—assessing emissions, resource management, impacts, and strategic responses such as scenario analysis and transition plans. In 2024, over 24,800 companies, representing two-thirds of global , disclosed data through this system, alongside disclosures from nearly 1,000 cities, states, and regions. Responses undergo a sector-specific scoring evaluating four progressive levels: Disclosure (completeness of reporting), (understanding of impacts), (policies and goals), and (implementation and outcomes). Scores range from A (leadership, requiring all levels plus essential criteria) to D- (minimal disclosure), with only about 2% of disclosers achieving A status in recent cycles; this incentivizes improvement by against peers and influencing and decisions. The anonymized, public database enables empirical tracking, such as average 7-10% reductions in direct emissions by disclosing companies within two years of requests.

Disclosure Process and Scoring

Companies participating in CDP disclosure typically receive formal requests from investors, customers, banks, or other stakeholders who submit them through CDP's platform, prompting the organization to invite the company to report. Self-selected companies or those without requests, such as public authorities, can register to disclose via CDP's online form, though an active request is generally required for full participation and scoring eligibility. Once invited, companies access the CDP online portal, where returning users log in and new users are onboarded by a team member or through self-registration starting in mid-June of the disclosure cycle year. The core of the process involves completing a standardized online tailored to the organization's type and scope, covering environmental themes such as , , and forests. Key onboarding steps include reviewing and accepting disclosure requests, designating a submission lead, paying any applicable administrative fee prior to submission, and configuring the questionnaire settings. Responses must be submitted by the scoring deadline—September 17 in the 2025 cycle—to receive a score, with limited edits permitted until November 19; questionnaires and guidance are available in the portal and as PDF downloads. Support is provided via account managers or CDP's help resources, emphasizing data accuracy and alignment with global standards like the on Climate-related Financial Disclosures (TCFD). CDP evaluates questionnaire responses using a structured scoring that assesses environmental transparency and performance across four progressive levels: disclosure, , , and . All questions contribute to the disclosure score, which measures the transparency and completeness of reported environmental ; select questions additionally evaluate of risks and opportunities, actions to address them, and through proactive strategies like emissions targets or supply chain engagement. Scores are assigned as letter grades from A (highest, indicating ) to D- (lowest, reflecting minimal effort), with the overall score derived from a weighted combination of these levels, adjusted for sector-specific benchmarks to compare companies within similar industries— for instance, responses in 2024 weighted at 39%, at 42%, and forests at 25%. The sector-relative approach ensures fair assessment by tailoring expectations to industry materiality, incentivizing incremental improvement while highlighting leaders. Top performers achieving an A grade are eligible for CDP's , which recognizes exemplary disclosure and action; in , only about 2% of disclosing companies reached A status across themes, with rare "Triple A" achievers excelling in , , and forests simultaneously. Public scores are published at the parent company level, focusing on self-reported data without independent verification, though CDP encourages substantiation through linked evidence. Methodologies for each theme, such as the 2025 climate change scoring detailed in official guidance, remain stable year-over-year with minor clarifications for consistency.

Programs and Initiatives

Climate Change Disclosure

The CDP climate change disclosure program, launched in 2000, enables investors, companies, and other stakeholders to request environmental data from corporations on greenhouse gas emissions, climate-related risks, and mitigation strategies. Companies responding to these requests complete an annual questionnaire assessing governance structures for climate oversight, current and future climate risks and opportunities, emissions inventories across Scopes 1, 2, and 3, and low-carbon transition plans. By 2023, over 23,000 companies participated, representing a 24% increase from 2022 and a 300% rise since earlier benchmarks, driven by investor mandates covering assets under management exceeding $136 trillion. Responses are scored on a scale from to D- (disclosure), with separate ratings for disclosure quality and awareness/management levels; scoring evaluates completeness, accuracy, and evidence of strategic action, such as science-based or verified emissions . For 2025, methodologies emphasize third-party verification of 100% of Scope 1 and 2 emissions, up from prior thresholds, alongside integration with frameworks like the on Climate-related Financial Disclosures (TCFD). High scorers, such as those on the CDP , demonstrate quantifiable progress, including emissions reductions aligned with goals, though scoring relies on self-reported subject to verification protocols. Empirical analyses link CDP participation to improved emissions management, with studies finding disclosing firms exhibit 7-10% average reductions in direct emissions within two years of initial requests, potentially due to heightened internal scrutiny and . However, causal remains inconclusive; while disclosure correlates with lower emissions intensity and financial performance in some sectors, it does not consistently demonstrate net reductions independent of concurrent regulatory pressures or firm-specific incentives, raising questions about whether reporting alone drives material change or primarily serves signaling functions. Critics note potential for incomplete Scope 3 coverage or optimistic projections, underscoring the need for external audits to validate claims beyond disclosure volume.

Water Security Program

The CDP Water Security Program facilitates voluntary corporate disclosure of water-related risks, dependencies, impacts, and strategies, enabling investors, policymakers, and companies to assess exposure to , quality issues, and stewardship opportunities. Established as an extension of CDP's environmental reporting framework around 2010, the program addresses the growing global water crisis by aggregating data from thousands of respondents annually, representing a significant portion of global . Central to the program is a standardized comprising 12 modules that probe , operational use, dependencies, , target-setting, and initiatives, including a dedicated plastics module for integrated tracking. Companies must identify risks across direct operations, upstream s, and downstream product use phases, quantifying withdrawals, discharges, and efficiency metrics where applicable. The methodology emphasizes verifiable data, such as basin-level risk mapping aligned with tools like the World Resources Institute's Aqueduct, to differentiate between physical (e.g., ) and regulatory risks. Scoring under the program awards letter grades (A to D-) based on disclosure completeness and performance depth, with criteria updated annually to reflect evolving standards; for instance, the 2025 prioritizes integrated alignment with business objectives and measurable toward like absolute reduction in high-risk basin usage. A key tool, CDP Water Watch, ranks over 200 industrial sectors by their aggregate water impact—factoring in operations, supply chains, and end-use—highlighting high-risk activities such as or data centers to guide investor scrutiny and corporate benchmarking. Adoption has grown steadily, with over 2,000 companies participating by —a 41% rise from 2016—and expanding to 18,700+ responses across CDP's environmental questionnaires by 2022, including , amid investor demands for transparency on assets vulnerable to hydrological variability. Participants report benefits like enhanced capital access, with disclosing organizations reportedly 2.3 times more likely to secure favorable financing terms tied to metrics, though empirical causation remains debated due to confounding factors like overall ESG integration. The program underscores causal links between corporate water practices and financial resilience, prioritizing empirical risk quantification over unsubstantiated narratives.

Forests Program

The Forests Program of CDP facilitates the disclosure of forest-related environmental data by companies, financial institutions, states, and regions, enabling them to assess dependencies, impacts, risks, and opportunities associated with natural ecosystems. It emphasizes tracking progress toward eliminating , conversion, and degradation in supply chains, aligning disclosures with international standards such as the Accountability Framework initiative. The program supports broader goals like reducing the 10% of global carbon emissions driven by and mitigating potential economic losses, with 328 companies reporting $97.5 billion in forest-related risks as of 2020 valuations. Disclosures under the program target seven high-risk forest-risk commodities, including , soy, , and and pulp products, with companies required to report on production, sourcing, and usage practices. The standardized evaluates , strategies, and implementation measures against 15 key performance indicators for management, culminating in CDP scores that benchmark performance relative to peers. In 2023, a record 1,152 companies submitted responses, covering 1,498 supply chains across these commodities, marking the first year of fully standardized reporting on - and conversion-free commitments. The Forest Champions initiative, a targeted component of the program, provides bespoke technical support to financial institutions for leveraging CDP forests data in engagements, risk assessments, and policy advocacy. Participants, including and Green Century Funds, have used the data to issue sustainability-linked loans—such as a US$600 million facility tied to CDP performance metrics—and secure no-deforestation commitments by 2025 from targeted companies in beef and soy sectors. The program's annual Global Forests Report, with the 2024 edition analyzing 2023 data, revealed that 445 companies reported progress on deforestation-free supply chains, though only 186 provided comprehensive details, and 64 achieved 100% compliance for at least one . These disclosures inform decisions representing substantial assets, driving actions like portfolio risk evaluations under frameworks such as TNFD's LEAP approach.

Supply Chain and Other Sectors

CDP's program operates as a membership-based initiative enabling corporate buyers to request environmental disclosures from their suppliers, facilitating management of Scope 3 emissions and other risks across value chains. Launched to address upstream impacts, the program standardizes on , , and forests, with over 270 member organizations representing purchasing power that engages approximately 45,000 suppliers annually as of 2025. Suppliers submit data through CDP's platform, allowing buyers to access dashboards, raw datasets, and insights for risk assessment and opportunity identification, including quarterly support from CDP experts. Empirical outcomes from supplier disclosures indicate tangible reductions, with engaged suppliers attributing 43 million metric tons of cuts to buyer interactions in recent years—equivalent to Sweden's annual emissions—while yielding estimated savings of $54.4 billion from efficiency measures. However, challenges persist, as Scope 3 emissions often exceed operational emissions by a factor of 26, and only one in four disclosing companies integrates risks into broader management processes. CDP evaluates buyer performance via annual Supplier Engagement Assessments, scoring based on , emissions management, target-setting, and collaboration, which incentivize deeper engagement; financial incentives from buyers boost supplier reductions by 52% over training alone. Beyond core themes, the program has expanded to incorporate disclosures on and plastics, aligning with 2025's integrated questionnaire that unifies reporting across environmental impacts. For , supply chain members leverage data to map dependencies and risks in , supporting nature-positive targets amid regulatory pressures like the EU's rules. Plastics disclosures enable tracking of usage, , and circularity efforts, with companies reporting value chain activities to mitigate emerging liabilities. These extensions broaden the program's scope, though adoption remains nascent, with disclosures revealing gaps in risk management for non-climate factors.

Organizational Structure

Governance and Leadership

CDP operates as an international non-profit organization structured across multiple entities, including CDP Worldwide ( and registered charity in , charity number 1122330), CDP , Inc., and CDP AISBL, each directed by respective boards of trustees or directors to oversee strategic, financial, and operational decisions. This decentralized model supports global operations while maintaining independence in environmental disclosure activities, with governance emphasizing fiduciary responsibility, , and alignment with disclosure objectives. Leadership is headed by Sherry Madera, appointed on July 20, 2023, and commencing her role on October 3, 2023, succeeding Paul Simpson, who served as CEO from CDP's early years until June 2022 and acted as co-founder alongside founder Paul Dickinson. Madera, with prior experience in and finance, leads executive functions including policy, communications, and program delivery, supported by key team members such as Shannon Joly (Chief Marketing & Communications Officer), Pietro Bertazzi (Chief Policy & Project Officer), and Angelo Fusaro in senior roles. Paul Dickinson, who founded CDP in 2000 to initiate investor-driven carbon disclosure, continues as a strategic advisor and board member in regional capacities. The Worldwide Board of Trustees provides overarching governance, with appointments in July 2025 of Marc Berryman (experienced in financial services) and Hideo Tomita to enhance global strategy and investor engagement. Regional boards, such as CDP Europe's, are chaired by Armin Sandhoevel, Ph.D., with members including Richard Benjamins and Paul Dickinson, focusing on European operations and compliance. UK charity trustees include David Lubin (appointed March 2023), Michael John Hugman (December 2020), and Amy Fiona Metcalfe (September 2020), ensuring accountability under regulatory standards. This structure prioritizes non-profit integrity, with audited financials and committee oversight, such as the Finance, Audit and Risk Committee chaired by Jeremy Burke (reappointed March 2023).

Funding Sources

CDP derives its funding from a combination of philanthropic and government grants, which form the largest portion of its income, supplemented by activities aligned with its mission, such as administrative fees from disclosing organizations and licensing of data and services. These sources enable CDP to maintain its global disclosure platform without relying on corporate memberships as a primary . In the ended 31 2024, CDP Worldwide reported total group income of £61.446 million, with philanthropic and grants accounting for £30.466 million, or roughly 50% of the total. Additional income included £8.375 million from charitable trade activities like investor memberships and data sales, £10.382 million from other trading such as partnerships, and £11.693 million from licensing and service fees primarily from its North American and European entities. Minor contributions came from donated services (£394,000) and investment income (£136,000). Philanthropic grants are provided by major foundations including (£1.114 million in 2024), the Bezos Earth Fund (via subgrants), (£109,000 restricted grant), Minderoo Foundation (£1.316 million restricted), Esmee Fairbairn Foundation, and Laudes Brenninkmeijer Foundation. The AKO Foundation also supports CDP's disclosure initiatives. These grants often fund specific programs, such as monitoring, evaluation, and learning efforts. Government funding includes multi-year grants from the through the programme and , as well as support from the Government (£62,000 via UK PACT in 2024) and the Norwegian Agency for Development Cooperation (£567,000 restricted). In Europe, such grants historically represent around 30% of CDP's regional funding. Fee-for-service revenues stem from enhanced administrative fees paid by disclosing entities during cycles, exemplified by contributions from companies like Inc. and in 2024, alongside data licensing to financial institutions and support services. CDP maintains transparency through annual trustees' reports and U.S. filings for its affiliates, detailing restricted and unrestricted funds, with £19.512 million in unrestricted reserves as of 31 March 2024.

Impact and Empirical Effectiveness

In 2022, more than 18,700 companies disclosed environmental data through CDP questionnaires, representing approximately half of global . This marked a 38% increase from 2021 levels. Disclosure numbers rose by 24% in 2023, reaching over 23,000 respondents, which reflected a more than 140% cumulative increase since 2020. By 2024, participation exceeded 24,000 companies, with over 22,700 receiving scores based on their transparency and leadership in , water, and forests programs.
YearApproximate Number of Disclosing CompaniesYear-over-Year Growth
2020~9,600-
2021~13,500~41%
2022>18,70038%
2023>23,00024%
2024>24,000~4%
Adoption trends show sustained expansion driven primarily by requests from CDP's investor signatories, who manage over $136 trillion in assets and use disclosures to inform decisions. Growth has accelerated post-2020 amid regulatory pressures, such as the EU's Reporting Directive, and mandates from major corporations. However, while overall numbers have grown, high-performance outcomes remain rare: only 2% of 2024's scored companies (515 out of 22,700) achieved an "A" rating for leadership. Small and medium-sized enterprises (SMEs) represent an emerging trend, with over 12,500 disclosing via CDP's dedicated questionnaire, enabling initial steps toward data-driven environmental management. Sectoral adoption varies, with and leading in response rates, while and materials sectors lag despite their high emissions profiles. Geographically, accounts for the largest share of disclosures, followed by , reflecting differences in regulatory environments. Into 2025, participation is projected to continue rising with the integration of transition plan disclosures, where 5,906 companies reported such plans in recent cycles—a 44% increase since 2022—though many remain at planning stages.

Studies on Disclosure Outcomes

A study of voluntary greenhouse gas disclosures submitted to the CDP by 14,400 companies across 77 countries from 2005 to 2018 found that disclosing firms reduced their emissions by 15-18% in the first year following disclosure, attributed to a disciplining effect on operations through increased and . This quantitative disclosure effect was stronger for publicly traded firms compared to private ones, suggesting market pressures amplify behavioral changes post-reporting. However, such voluntary programs like CDP may suffer from self-selection bias, where participating firms are already predisposed to better environmental , complicating causal attribution beyond . Research on financial outcomes linked to CDP participation shows mixed results. One of enhanced carbon disclosure practices, including CDP reporting, indicated significant improvements in corporate financial , mediated through better and stakeholder trust, based on a sample of Chinese firms from 2010-2020. Conversely, other empirical work on carbon-disclosing firms reported declines in financial metrics, such as a 4.13% drop in and 4.22% in ratio post-disclosure, potentially due to compliance costs outweighing benefits in certain sectors. Higher CDP scores have been positively correlated with overall firm metrics like profitability and in some datasets, but these associations often reflect reverse , where stronger performers are more likely to disclose transparently rather than disclosure driving gains. Broader reviews of carbon disclosure literature highlight that while CDP participation correlates with legitimacy-seeking behaviors—such as higher emitters using disclosure to mitigate reputational risks— for sustained, causal emissions reductions remains limited by endogeneity and short-term measurement horizons. Studies employing difference-in-differences designs on related mandatory regimes provide quasi-causal benchmarks, showing emissions drops of around 8-10% post-requirement, but voluntary CDP outcomes appear less pronounced without regulatory enforcement. Academic sources in this field, often from sustainability-focused journals, may underemphasize null or adverse effects due to prevailing institutional incentives favoring positive narratives.

Measured Environmental Impacts

Empirical assessments of the environmental impacts attributable to CDP disclosures reveal limited evidence of substantial, causal reductions in or other metrics. While CDP's self-reported data from participating companies suggest modest declines, such as a 7-10% reduction in direct (Scope 1 and 2) emissions within two years of responding to disclosure requests, these figures derive from aggregated respondent submissions without independent verification of . Independent academic studies, including analyses of CDP participants among firms, frequently find no significant correlation between disclosure participation and subsequent emission intensity reductions, attributing observed trends more to pre-existing firm characteristics like size or sector than to the disclosure process itself. CDP's 2024 reports highlight collaborations facilitated through disclosures, claiming avoidance of 43 million tonnes of CO2 equivalent emissions via buyer-supplier engagements, alongside $13.6 billion in cost savings from Scope 3 emission cuts among disclosing firms. These outcomes are framed as driven by disclosure-induced transparency, yet they rely on participant self-assessments, which may incentivize optimistic reporting to demonstrate progress. Peer-reviewed examinations, such as those reviewing voluntary GHG disclosures, indicate that while disclosure can enhance and internal practices, it seldom translates to verifiable absolute emission declines without complementary regulatory or market pressures like carbon pricing. For instance, a study of international firms found Scope 3 disclosures had no material effect on Scope 1 and 2 emissions performance. Broader meta-analyses of carbon disclosure regimes, including CDP, underscore challenges in isolating amid potential greenwashing, where high-disclosure firms often exhibit higher baseline emissions and use reporting to signal virtue without proportional action. One empirical investigation linked ESG-related disclosures (overlapping with CDP metrics) to a 1.2% uplift in corporate carbon performance scores, but this metric reflects self-evaluated rather than measured physical reductions. Critics note that voluntary frameworks like CDP may divert resources toward over substantive , with limited aggregate impact on global emissions trajectories, as evidenced by stagnant or rising emissions among many long-term disclosers despite improved reporting. Overall, while disclosures correlate with incremental gains in select cases—such as optimizations yielding marginal CO2e savings—their net remains empirically modest and contested, particularly absent mandatory .

Criticisms and Controversies

Economic Costs and Burdens

Compliance with CDP reporting imposes direct financial fees on participating companies. Since , CDP has levied an annual administrative fee of $975 on North American and Western European companies, applicable across its , , and forests programs. As of , North American companies face tiered fees of $7,300 for enhanced reporting levels and $3,100 for foundation-level participation. Beyond these fees, substantial internal and external expenses arise from data gathering, analysis, verification, and submission processes. A survey of corporate issuers by ERM, conducted on behalf of the SEC's disclosure , reported average annual costs of $677,000 for -related disclosure activities, with $237,000 allocated to GHG emissions analysis and disclosures—a core component of CDP reporting—and $154,000 to scenario analysis, which includes TCFD- and CDP-aligned and opportunity disclosures. These expenditures encompass staff time for non-financial , external consulting, assurance audits (averaging $82,000), and software tools, often straining resources in departments smaller than financial reporting teams. The following table summarizes key cost categories from the ERM survey:
CategoryAverage Annual Spend (USD)
GHG and/or disclosures237,000
scenario /disclosures154,000
Internal management148,000
Assurance/audits related to 82,000
Additional -related 130,000
Scope 3 emissions reporting, emphasized by CDP, amplifies burdens due to its complexity in tracing indirect impacts, requiring coordination with suppliers and often leading to higher consulting fees. Although CDP participation is voluntary, requests create pressure, particularly on publicly traded firms, diverting managerial focus and capital from productive investments. representatives have argued these requirements impose unfair economic strain, potentially harming competitiveness without proportional environmental gains, especially amid overlapping disclosure mandates like SEC rules. Smaller companies in supply chains face disproportionate relative costs, as fixed efforts for data accuracy and reporting yield limited strategic benefits compared to larger peers. Despite such criticisms, many firms absorb the costs to maintain access to capital and stakeholder relations.

Greenwashing and Data Integrity Issues

The Carbon Disclosure Project (CDP) relies primarily on self-reported from participating companies, which has raised concerns about potential inaccuracies and manipulation that could facilitate greenwashing—where firms exaggerate environmental efforts to enhance their reputation without corresponding reductions in emissions. A 2023 analysis by Clarity AI found discrepancies in approximately 20% of cases between GHG emissions figures reported to CDP and those in companies' reports, suggesting inconsistencies in presentation or calculation methodologies that undermine reliability. Self-reporting introduces risks such as underreporting of Scope 3 emissions or overestimation of mitigation efficiencies, as suppliers may prioritize appearing sustainable over precision, with 83% of companies reportedly struggling to access accurate per GHG Protocol standards. Data integrity challenges are compounded by the voluntary nature of verification; while CDP recommends independent assurance, it is not mandatory for scoring, leading to instances where summary-level data lacks granular breakdowns, signaling potential credibility gaps. Research indicates average error rates in emissions calculations can reach 30-40%, often due to inconsistent methodologies or incomplete supply chain data, which can mislead investors relying on CDP scores for decision-making. CDP's own analysis acknowledges pitfalls in climate disclosures, including variability in reporting boundaries and estimation techniques that affect comparability and trustworthiness. Critics contend that high CDP scores may incentivize selective disclosure of favorable metrics, enabling greenwashing by allowing companies with elevated emissions to offset perceptions through participation rather than verified action; for instance, firms with higher carbon outputs have been observed to increase disclosure volumes, potentially as an tactic. These issues highlight systemic limitations in unverified, self-assessed frameworks, where the absence of standardized enforcement can prioritize narrative over empirical rigor, though proponents argue that growing investor scrutiny and third-party audits mitigate some risks.

Policy Influence and Market Distortions

The Carbon Disclosure Project (CDP) has actively advocated for mandatory environmental disclosures, collaborating with regulators to shape policies such as the European Union's Corporate Sustainability Reporting Directive (CSRD) and providing input aligned with the U.S. Securities and Exchange Commission's (SEC) 2024 climate disclosure rules. CDP's framework, used by investors managing trillions in assets, has informed these regulations by standardizing data requests that pressure companies toward compliance, with over 23,000 firms disclosing via CDP in 2023 alone. Critics contend this influence promotes regulations that prioritize reporting over verifiable emission reductions, as CDP scores often emphasize disclosure volume rather than mitigation outcomes. Mandatory disclosure mandates, bolstered by CDP's data and advocacy, impose significant compliance costs estimated at billions annually for U.S. firms under SEC rules, disproportionately burdening smaller companies unable to afford specialized reporting systems. These costs include data collection, verification, and Scope 3 emissions tracking across supply chains, which can reveal proprietary information without commensurate benefits in . shows announcements of such mandates trigger negative stock returns for carbon-intensive firms with high institutional ownership, diverting capital toward lower-disclosure entities irrespective of or potential. Market distortions arise from investor reliance on CDP-derived ESG ratings, which exhibit high divergence across providers due to subjective methodologies and self-reported data, leading to mispriced assets and herding into "sustainable" investments that may underperform on risk-adjusted returns. This dynamic encourages greenwashing, where firms optimize disclosures for higher scores—potentially inflating valuations—while underinvesting in genuine decarbonization, as stronger ESG pressures paradoxically reduce real green capital expenditures. In distorted factor markets, such as those with subsidized energy, disclosure amplifies ownership biases, prompting private firms to mimic state-owned enterprises in reporting to access capital, further skewing resource allocation away from cost-effective abatement. Overall, while CDP positions its influence as enhancing transparency, detractors argue it fosters regulatory capture by environmental advocates, embedding biases that prioritize ideological metrics over market-driven efficiency.

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