As the environmental reporting landscape has evolved, so has CDP. In the 2018 disclosure cycle we moved to a new disclosure platform and revamped and redesigned our questionnaires, which has naturally had a major impact on the scoring methodology.

The biggest change has been a move to sector-based questionnaires and scoring. We now have 12 sector-specific questionnaires for climate change, one for forests and five for water security, as well as a general questionnaire for each theme for companies that do not fall into a sector-specific classification. Companies can answer the sector-specific questions for multiple sectors they operate in, but they are only scored on their primary sector. This has also impacted our scoring categories, as categories are now weighted differently depending on sector. For example, for the oil and gas sector, questions in the Targets and Scenario Analysis categories are higher weighted than for other sectors. 

Another major change has been the integration of the TCFD recommendations into our climate change questionnaires, which has resulted in the addition of questions and adaptation of existing questions to ensure the automatic compliance of all CDP disclosing companies with the TCFD recommendations.

We have also started to request more forward-looking metrics, have moved to greater alignment across climate change, forests and water security, and continued alignment with other industry reporting frameworks.

Due to all these changes, we have also adjusted the thresholds for Leadership level and Management level to be lower this year, giving companies a period of leniency to adjust to the new more challenging questionnaires.

There are also many existing individual questions that have had their scoring criteria adjusted.

How do CDP’s new sector-based questionnaires affect scoring?

In 2018, CDP has initiated the process of moving to sector-based disclosure and scoring, to ensure we are requesting the most relevant information that is most useful to the market. This year we introduced 12 sector-based questionnaires, focusing on the most high-emitting sectors, with companies that don’t fit into any of these completing the shorter ‘general’ questionnaire. Companies that operate between sectors or in more than one sector are encouraged to answer the questions for all applicable sectors so that their investors and customers can access this important information. However, they are only scored on their primary sector.

Why have the thresholds been lowered this year?

CDP is committed to raise the bar continuously for corporate environmental stewardship through our scoring, whether through evolving the questionnaires or tightening the thresholds. Given the significant changes to our methodology and questionnaires this year, including more tailored sector-based questions, we have taken the decision to adjust our thresholds for Management level and Leadership level scoring this year to allow flexibility for companies to adjust to the new approach. This means compared to last year companies will need fewer points to achieve an ‘A’ score. We will be regularly reviewing thresholds in future to ensure these reflect our high ambition to meet the environmental challenge.