Carbon Disclosure Project
Encyclopedia
The Carbon Disclosure Project (CDP) is an organisation based in the United Kingdom which works with shareholder
s and corporation
s to disclose the greenhouse gas
emissions of major corporations.
In 2008, it published the emissions data for 1550 of the world's largest corporations, accounting for 26% of global anthropogenic emissions.
The CDP represents 551 institutional investors, with a combined $71 trillion under management.
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 investor
s 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.
Much of the data elicited has never been collected before. This information is helpful to investors, corporations and to regulators in making informed decisions which take into account corporate risk from future government legislation, possible future lawsuit
s 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 station
s, fuel distillation plants, etc). It is vital that the right technologies are adopted. In particular:
The process of companies having to respond to CDP delivers real changes in business practice resulting in lower energy use. 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.
.
information at the heart of its 551 institutional investors 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.
. 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. Governance networks
are effective in bringing together civil society and private organisations in order to address and achieve common goals, in this case lowering emissions, and the CDP helps to connect these different levels of national and local government.
. 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.
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.
Shareholder
A shareholder or stockholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself ....
s and corporation
Corporation
A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...
s to disclose the greenhouse gas
Greenhouse gas
A greenhouse gas is a gas in an atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth's atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone...
emissions of major corporations.
In 2008, it published the emissions data for 1550 of the world's largest corporations, accounting for 26% of global anthropogenic emissions.
The CDP represents 551 institutional investors, with a combined $71 trillion under management.
Background
International agreements such as the Kyoto ProtocolKyoto Protocol
The Kyoto Protocol is a protocol to the United Nations Framework Convention on Climate Change , aimed at fighting global warming...
have proved problematic, and individual governments have been reluctant to develop stringent national limits on emissions
Exhaust gas
Exhaust gas or flue gas is emitted as a result of the combustion of fuels such as natural gas, gasoline/petrol, diesel fuel, fuel oil or coal. According to the type of engine, it is discharged into the atmosphere through an exhaust pipe, flue gas stack or propelling nozzle.It often disperses...
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 investor
Institutional investor
Institutional investors are organizations which pool large sums of money and invest those sums in securities, real property and other investment assets...
s to focus attention on carbon emissions, energy usage and reduction – wherever companies and assets may be located.
Some corporations have higher greenhouse gas
Greenhouse gas
A greenhouse gas is a gas in an atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth's atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone...
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 taken seriously because of the size of the shareholdings backing CDP - 475 institutional investors with $55 trillion under management. CDP operates from 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 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)
- Obtained backing from blue chip investors including HSBCHSBCHSBC Holdings plc is a global banking and financial services company headquartered in Canary Wharf, London, United Kingdom. it is the world's second-largest banking and financial services group and second-largest public company according to a composite measure by Forbes magazine...
, JPMorgan Chase, Bank of AmericaBank of AmericaBank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...
, Merrill LynchMerrill LynchMerrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...
, Goldman SachsGoldman SachsThe Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
, American International GroupAmerican International GroupAmerican International Group, Inc. or AIG is an American multinational insurance corporation. Its corporate headquarters is located in the American International Building in New York City. The British headquarters office is on Fenchurch Street in London, continental Europe operations are based in...
, and State Street Corp.
- 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 helpful to investors, corporations and to regulators in making informed decisions which take into account corporate risk from future government legislation, possible future lawsuit
Lawsuit
A lawsuit or "suit in law" is a civil action brought in a court of law in which a plaintiff, a party who claims to have incurred loss as a result of a defendant's actions, demands a legal or equitable remedy. The defendant is required to respond to the plaintiff's complaint...
s 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 station
Power station
A power station is an industrial facility for the generation of electric energy....
s, fuel distillation plants, etc). It is vital that the right technologies are adopted. In particular:
- Giving higher priority to energy efficientEfficient energy useEfficient energy use, sometimes simply called energy efficiency, is the goal of efforts to reduce the amount of energy required to provide products and services. For example, insulating a home allows a building to use less heating and cooling energy to achieve and maintain a comfortable temperature...
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. In many cases this leads to a higher proportion of energy from renewable
Renewable energy
Renewable energy is energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable . About 16% of global final energy consumption comes from renewables, with 10% coming from traditional biomass, which is mainly used for heating, and 3.4% from...
sources.
CDP has 501(c)3 charitable status through Rockefeller Philanthropy Advisors
Rockefeller Philanthropy Advisors
Rockefeller Philanthropy Advisors is a 501 nonprofit organization that currently advises on and manages more than $200 million in annual giving. Headquartered in New York City, with offices in Chicago, Los Angeles and San Francisco, it traces its antecedents to John D...
in New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
and is a registered charity in the United Kingdom.
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 governanceEnvironmental governance
Environmental governance is a concept in political ecology or environmental policy related to defining the elements needed to achieve sustainability. All human activities -- political, social and economic — should be understood and managed as subsets of the environment and ecosystems...
.
Investor CDP
The Investor CDP program includes the largest collaboration of investors in the world and serves to place relevant climate changeClimate change
Climate change is a significant and lasting change in the statistical distribution of weather patterns over periods ranging from decades to millions of years. It may be a change in average weather conditions or the distribution of events around that average...
information at the heart of its 551 institutional investors 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.
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 chainSupply chain
A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to...
. 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
Global warming
Global warming refers to the rising average temperature of Earth's atmosphere and oceans and its projected continuation. In the last 100 years, Earth's average surface temperature increased by about with about two thirds of the increase occurring over just the last three decades...
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. Governance networks
Network governance
Network governance is "interfirm coordination that is characterized by organic or informal social system, in contrast to bureaucratic structures within firms and formal contractual relationships...
are effective in bringing together civil society and private organisations in order to address and achieve common goals, 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 chainSupply chain
A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to...
. 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.
CDP Cities
CDP Cities will provide 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. CDP Cities provides an easy to use global platform that allows city governments to publicly disclose their greenhouse gas emission data. This can demonstrate which are safe cities and cities that are future proofing against climate change impacts which will attract investment.Participants
- SiemensSiemensSiemens may refer toSiemens, a German family name carried by generations of telecommunications industrialists, including:* Werner von Siemens , inventor, founder of Siemens AG...
- DellDellDell, Inc. is an American multinational information technology corporation based in 1 Dell Way, Round Rock, Texas, United States, that develops, sells and supports computers and related products and services. Bearing the name of its founder, Michael Dell, the company is one of the largest...
- Hewlett Packard
- L'OréalL'OréalThe L'Oréal Group is the world's largest cosmetics and beauty company. With its registered office in Paris and head office in the Paris suburb of Clichy, Hauts-de-Seine, France, it has developed activities in the field of cosmetics...
- PepsiCoPepsiCoPepsiCo Inc. is an American multinational corporation headquartered in Purchase, New York, United States, with interests in the manufacturing, marketing and distribution of grain-based snack foods, beverages, and other products. PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company...
- Cadbury SchweppesCadbury SchweppesCadbury is a confectionery company owned by Kraft Foods and is the industry's second-largest globally after Mars, Incorporated. Headquartered in Uxbridge, London, United Kingdom, the company operates in more than 50 countries worldwide....
- NestléNestléNestlé S.A. is the world's largest food and nutrition company. Founded and headquartered in Vevey, Switzerland, Nestlé originated in a 1905 merger of the Anglo-Swiss Milk Company, established in 1867 by brothers George Page and Charles Page, and Farine Lactée Henri Nestlé, founded in 1866 by Henri...
- Procter & GambleProcter & GambleProcter & Gamble is a Fortune 500 American multinational corporation headquartered in downtown Cincinnati, Ohio and manufactures a wide range of consumer goods....
- TescoTescoTesco plc is a global grocery and general merchandise retailer headquartered in Cheshunt, United Kingdom. It is the third-largest retailer in the world measured by revenues and the second-largest measured by profits...
- UnileverUnileverUnilever is a British-Dutch multinational corporation that owns many of the world's consumer product brands in foods, beverages, cleaning agents and personal care products....
- Lloyds TSBLloyds TSBLloyds TSB Bank Plc is a retail bank in the United Kingdom. It was established in 1995 by the merger of Lloyds Bank, established in Birmingham, England in 1765 and traditionally considered one of the Big Four clearing banks, with the TSB Group which traces its origins to 1810...
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.