How to ace CDP supply-chain reporting
This is the second of a two-part series.
Responding to the CDP is not a small task — especially if you are interested in getting a decent score. As with many things in life, though, a little preparation and planning can be the key to success. If you are just starting out on your first CDP Supply Chain Response, read the previous article first; it will help get you grounded with a few things you should know about the CDP and the request you have received.
Once you understand the context of the CDP Supply Chain request, the first and absolutely critical step is to get consensus from the leadership team that the company will respond.
Responding is not mandatory, and it involves a decent amount of time and resources. It also requires revealing a substantial amount of internal information to the requesting customer (or to the public, depending on the level of transparency you select when publishing). There is not much benefit to drafting, or even planning, a response if your management team does not see it as a priority.
Getting management buy-in is also critical because whoever is crafting the CDP response will need to gather information from many people across the organization. If there is approval at the senior level, this will pave the way for the response writer to get what he/she needs quickly.
After getting internal, senior-level buy in, you will need the following to craft a response that will result in a favorable disclosure score. Remember that there are two types of scores, disclosure and performance. The disclosure score is still the most widely referenced and the easier of the two to do well on.
The CDP guidance documents
The CDP has a very comprehensive set of guidance documents available on its website for each of the various questionnaires. Especially for first time-responders, this information is extremely useful in understanding the questions you are being asked. We highly recommend reading through the guidance and/or viewing CDP webinars on reporting (also online) prior to starting. The time you invest will save you three times that in terms of response drafting.
The scoring methodology
The CDP also offers a very detailed overview of their scoring methodology. It provides this information in a format that allows you to plan your response and also to estimate your score. This is extremely useful in helping you determine where your efforts are best spent for gathering information. For example, questions 3.3 on initiatives, 5.1 on risks and 6.1 on opportunities offer a greater number of potential points for the disclosure score.
Your carbon footprint
Most of the second half of the CDP questionnaire is focused on your greenhouse gas inventory (aka your carbon footprint). Not providing greenhouse gas inventory information will limit your ability to get a higher score. If you have not compiled an inventory previously, you will want to carefully consider the effort required to do so.
If other questionnaires you are responding to also ask for this information, that can be helpful in tipping the scales in favor of compiling an inventory. For more information on how to calculate your carbon footprint, download Sustrana’s free white paper A Business Primer on Climate Change (PDF).
Understanding risks and opportunities related to climate change
In order to provide a substantive response to questions 5.1 and 6.1, you need to undergo some internal assessment of the risks and opportunities that your organization faces as a result of climate change. The further into the future you evaluate these risks, the better your performance score will be.
Convening a cross functional committee to discuss the potential risks and opportunities climate change poses to your business can be a helpful way to start. By reading through the CDP guidance and research papers, you will get a much better sense of the specific impacts to evaluate, such as physical, regulatory and reputational risks and opportunities.
Other CDP reports in your industry
Because many companies that report to the CDP opt to make their reports available publicly, you can use their reports to your benefit. By going to the CDP website and searching on reports within your industry, you can view the reports submitted by others — and their scores. This will give you a sense of the range of responses and the content of reports within your industry.
This exercise is also helpful for providing a comfort level to senior managers who may be concerned about the information being reported. You can show them the types and ranges of responses from others. They then can decide what they are most comfortable with. Time spent reviewing the responses of others is also an exercise that will pay off in spades.
Your elevator pitch
Bet you didn’t expect this one. Sustainability reporting, to whatever organization or entity, is new for many people from whom you will need to get information or approvals. Often you will hit upon one or both of two challenges: People don’t have time to get you what you need or they don’t see why it is important. Therefore, having your “business case” for reporting straight in your mind will be extremely helpful.
Try writing a two- to three-line elevator pitch for it that you can use when you talk with people, or when you e-mail them. Make sure you have some supporting bullet points that go deeper in case they ask questions.
A sign-off person
Someone must “sign off” on the report for it to be officially submitted to the CDP. Recent changes in the performance scoring methodology have made it so that it is advantageous for that person to be as senior as possible. This can be an opportunity to gain visibility for issues, but also can be a pitfall if you don’t have your business case lined up.
Make sure you line your sign-off person up early on in the process so you can acclimate him/her to the process. Document whom you have reviewed your responses with across the company so you can demonstrate that you have done your due diligence when the time comes to submit.
This article first appeared at Sustrana.com.