What Is CDP? Understanding the Carbon Disclosure Project and Climate Reporting Framework

The Carbon Disclosure Project (CDP) is one of the most widely used environmental disclosure systems in the world. It helps organizations report their climate-related data and align with evolving investor and regulatory expectations.

CDP matters more than ever as climate disclosure shifts from voluntary to mandatory. For sustainability professionals, ESG analysts, and reporting teams, understanding CDP is key to staying ahead.

Why Climate and Environmental Disclosure Matters

Climate risk is financial risk. It affects supply chains, operating costs, asset values, and long-term business viability. That’s why investors, regulators, and customers increasingly expect transparency around environmental impacts—and how companies plan to manage them. Disclosure isn’t just about checking a box. It’s about creating resilience. When companies report on climate, water, and forest-related risks, they gain:

• Better visibility into operations and supply chain vulnerabilities
• Data to drive decisions that reduce waste and cut costs
• Credibility with investors, customers, and regulators

Global regulations are also raising the stakes:

• The EU’s Corporate Sustainability Reporting Directive (CSRD) makes climate disclosures mandatory for thousands of companies
• The SEC is moving toward climate-related rules in the U.S.
• TCFD-aligned reporting is now expected by many asset managers and institutional investors

At the same time, voluntary frameworks like CDP help companies prepare for these shifts. By disclosing through CDP:

• You standardize your data collection process
• You align with widely used metrics
• You get scored—giving your stakeholders a clear benchmark

Disclosure today means fewer surprises tomorrow. It’s a proactive strategy to manage risk, stay compliant, and stand out in a crowded ESG landscape.

Key Takeaways

• CDP is a nonprofit that runs a global disclosure system for environmental impacts.
• It covers climate change, water security, and forests—each with detailed questionnaires and scoring.
• CDP scores companies based on data quality, transparency, and governance.
• It complements other frameworks like TCFD, GRI, and ISSB.
• Tools like Nasdaq Metrio streamline CDP-aligned reporting.

What Is CDP?

The Carbon Disclosure Project (CDP) is a global nonprofit founded in 2000 to drive environmental transparency. CDP operates a system for companies, cities, and governments to disclose environmental data—focusing on climate change, water security, and forests.

Today, more than 18,700 companies—representing over 50% of global market capitalization—report to CDP. The organization partners with investors, governments, and industry leaders to standardize and scale climate disclosures.

Overview of CDP Reporting Categories

CDP organizes its disclosure into three core areas: climate change, water security, and forests. Each has a dedicated questionnaire, updated annually, and aligned with leading frameworks like TCFD and SBTi. These questionnaires help companies provide structured, comparable data that informs investor decisions and supports regulatory alignment.

Climate Change
This category focuses on a company’s greenhouse gas emissions, climate-related risks, and strategies for managing them. You’ll report Scope 1, 2, and 3 emissions, progress toward reduction targets (such as science-based targets), and how climate issues are governed at the leadership level. Many companies also disclose scenario analysis, carbon pricing, and the financial implications of climate risk.

Water Security
Water-related disclosures highlight a company’s use of and dependency on freshwater resources. CDP asks how much water you withdraw, where you face risks like scarcity or flooding, and how you manage those risks across operations and supply chains. The goal is to uncover exposure to physical and regulatory water challenges—and whether you have systems in place to address them.

Forests
This category is for companies that produce, source, or sell commodities linked to deforestation, such as timber, soy, palm oil, or cattle products. CDP examines how you trace these materials, assess risks in the supply chain, and implement policies to prevent deforestation. Companies are also asked to report on certifications and efforts to maintain biodiversity.
 

By structuring disclosures this way, CDP helps companies focus on what’s most material while providing investors and regulators with actionable data on environmental risks and management strategies.

CDP Scoring and Disclosure Process

After submitting your CDP questionnaire, your organization receives a score from A to D-. This score reflects how well you disclose environmental data and manage related risks and opportunities.

The scoring framework evaluates four key areas:

1. Disclosure: Have you provided complete, consistent data that answers the questionnaire thoroughly?
2. Awareness: Do you demonstrate a clear understanding of how environmental risks affect your business?
3. Management: Are you taking concrete steps to manage these risks—such as implementing reduction targets or engaging suppliers?
4. Leadership: Are you going beyond compliance with best practices, innovation, or verified performance (e.g., science-based targets or renewable energy use)?

Organizations that don’t respond or submit insufficient data receive an F, which signals to stakeholders a lack of transparency or engagement on environmental issues.

CDP scores are published annually and widely used by institutional investors, ESG rating agencies, and other stakeholders to compare companies within and across sectors. A high CDP score can enhance your company’s credibility, improve access to capital, and support inclusion in ESG indices.

To improve your performance year over year, many companies use internal ESG benchmarking tools to track gaps in reporting, identify areas for improvement, and align internal processes with CDP’s expectations. Even incremental improvements—such as expanding the scope of emissions data or formalizing governance—can lead to meaningful score increases in future cycles.

In short, CDP scoring isn't just about compliance—it's a signal of your organization's environmental readiness, accountability, and transparency.

CDP vs. Other ESG Frameworks

CDP isn’t the only ESG reporting framework—but it plays a distinct and valuable role in the disclosure ecosystem. Each framework is designed with a specific focus and use case in mind, and many companies use multiple frameworks together to meet stakeholder expectations and regulatory requirements.

CDP stands out for its data-driven, investor-focused approach. While other frameworks like GRI or TCFD offer principles or narratives, CDP asks companies to provide detailed, structured answers that can be scored and benchmarked.

Here’s how CDP compares to other major frameworks:

These frameworks aren’t mutually exclusive. In fact, they often build on or reference each other. For example, CDP’s climate questionnaire is already aligned with TCFD’s four pillars. ISSB has incorporated elements of both TCFD and SASB to create a global baseline for sustainability disclosures. And CSRD, which mandates ESG reporting for thousands of companies operating in the EU, may require structured data that overlaps with CDP’s format.

Bottom line:
Use CDP when you need to provide investors with clear, comparable environmental data.
Use GRI, TCFD, or CSRD when you need to share broader ESG context or meet jurisdictional requirements.
 

Who Reports to CDP and Why?

Every year, thousands of organizations across the globe report to CDP. These include large public companies, private enterprises in high-impact industries, and suppliers responding to customer requirements. Participation spans sectors like energy, manufacturing, finance, consumer goods, and logistics—demonstrating that environmental disclosure is now a cross-industry expectation.

Public Companies
For public companies, reporting to CDP is often a response to investor pressure. Many institutional investors use CDP scores to evaluate ESG risk, guide engagement, and inform portfolio decisions. A company’s transparency—and performance—can directly influence access to capital.

Private Companies
Private companies and mid-sized firms are also joining the process, especially those operating in jurisdictions with tightening environmental regulations. CDP offers a structured path to prepare for compliance with frameworks like the EU’s CSRD or upcoming SEC climate disclosure rules in the U.S.

Suppliers
Suppliers, too, are increasingly pulled into the CDP ecosystem. Large corporations are asking vendors to disclose their environmental data through CDP as part of broader efforts to track and reduce Scope 3 emissions. For many suppliers, participation is no longer optional—it’s a requirement for maintaining strategic business relationships.

Companies report to CDP not only to satisfy external expectations, but to gain internal value. Submitting to CDP helps teams:

• Understand where they stand
• Benchmark performance over time
• Uncover gaps in data collection or strategy
• Demonstrate accountability and leadership in sustainability

Ultimately, CDP participation signals that a company is taking climate risk seriously—and doing something about it. That commitment strengthens credibility with investors, regulators, customers, and employees alike.

Tools for CDP-Aligned Reporting

Reporting to CDP requires gathering large amounts of environmental data, coordinating input across departments, and aligning responses to evolving frameworks. For many organizations, trying to manage this process manually—using spreadsheets, emails, and siloed systems—leads to missed deadlines, incomplete data, and inconsistent disclosures.

Modern ESG software and AI-powered tools are changing that.

• Nasdaq Metrio: Offers a centralized platform for ESG data management and reporting. It enables companies to collect data across teams, map it to relevant standards (including CDP), and generate disclosures with greater consistency and transparency. By automating parts of the process, Metrio reduces the time spent chasing inputs and validating numbers—so sustainability teams can focus on strategy, not spreadsheets.
• Nasdaq ESG AI Assistant: Helps bridge the gap between data and disclosure. It assists with drafting responses to CDP questionnaires, flags missing or weak areas, and ensures alignment with best practices across multiple frameworks. It’s especially useful for companies managing tight timelines or limited ESG staff.

Together, these tools don’t just streamline reporting—they help improve accuracy, reduce risk, and support collaboration across finance, sustainability, compliance, and operations. For organizations aiming to improve their CDP scores, reduce reporting fatigue, and scale ESG efforts, automation and AI are no longer nice to have—they’re essential.

Get a Free ESG Gap Assessment

Unsure how your current ESG disclosures stack up? The ESG Gap Assessment is a fast, effective way to find out.

This free tool benchmarks your existing reporting against top frameworks like CDP, CSRD, and TCFD. It highlights what you’re doing well—and where you have room to improve. You’ll receive tailored recommendations to help you close gaps, strengthen your disclosures, and align with evolving investor and regulatory expectations.

Whether you’re aiming for a better CDP score or preparing for new mandates, this assessment gives you a clear starting point.

Get your free ESG Gap Assessment and take the next step toward stronger, smarter reporting.
 

CDP offers more than a reporting framework—it provides a structured, credible path to environmental transparency. In a landscape where ESG expectations are rising fast, CDP helps companies move from reactive compliance to proactive leadership.

Whether you’re just beginning your disclosure journey or working toward a higher score, aligning with CDP allows you to meet investor demands, respond to regulatory shifts, and improve your environmental performance over time.

It’s not just about filling out a questionnaire. It’s about building trust, identifying risk, and showing stakeholders that your company is serious about sustainability.

Use the right tools. Close the gaps. Tell your ESG story with confidence.

CPD FAQs

What is CDP reporting?
CDP reporting is the process by which organizations disclose environmental data through the Carbon Disclosure Project’s standardized questionnaires. These disclosures cover three key areas—climate change, water security, and forests—and help companies communicate their environmental risks, impacts, and management strategies to investors, customers, and other stakeholders. CDP reporting is designed to produce consistent, comparable, and investor-relevant information.

What are the CDP disclosure categories?
CDP collects data in three main categories. The climate change section covers greenhouse gas emissions, climate governance, and emissions reduction targets. Water security addresses how a company uses water, the risks it faces from water scarcity or pollution, and the measures it’s taking to mitigate those risks. The forests category focuses on land use, deforestation risk, and the sourcing of commodities like timber, soy, palm oil, and cattle products.

Is CDP reporting mandatory?
CDP reporting is not legally required in most jurisdictions, but it’s increasingly expected by institutional investors, large customers, and sustainability rating agencies. In some regions, data disclosed through CDP supports compliance with mandatory frameworks like the European Union’s CSRD. For many companies, participating in CDP is a strategic move to stay ahead of evolving ESG requirements.

How does CDP compare to TCFD or GRI?
While CDP, TCFD, and GRI all support ESG transparency, they serve different functions. TCFD offers a principles-based approach focused on climate-related financial risk and governance. GRI takes a broader view, helping companies report on a wide range of ESG topics in narrative form. CDP is more data-driven, structured around detailed questionnaires, and provides scored assessments that enable benchmarking and comparison.