The CDP Scores tool, developed by CDP (formerly the Carbon Disclosure Project), is designed to assess and score organisations’ environmental transparency and performance. CDP is an international non-profit that facilitates environmental data disclosure from companies, cities, and governments, aiming to drive action towards a sustainable economy.
The CDP Scores system evaluates organisations based on their environmental disclosures, focusing on issues like climate change, water security, and deforestation. Scores range from A to D- and reflect the extent to which an organisation has measured and managed its environmental impacts, with A representing leadership in transparency and action. These scores are based on responses to CDP’s questionnaires, which assess strategies, governance, risk management, and performance metrics.
The target audience for CDP Scores includes investors, companies, policy makers, and finance professionals. Investors and asset managers use CDP Scores to assess the environmental performance of companies, providing insight into their sustainability practices and risks. Companies themselves can benefit from the tool by understanding how they compare to peers in terms of environmental governance and performance, helping them improve their sustainability efforts.
For finance professionals, the CDP Scores tool offers a clear and reliable benchmark for evaluating a company’s environmental performance. By integrating CDP Scores into investment decisions, finance professionals can better understand a company’s exposure to environmental risks, which may influence financial performance. Furthermore, these scores can assist in assessing the alignment of companies with sustainable finance frameworks and ESG (environmental, social, and governance) criteria.
In addition to supporting investment decisions, the tool can help finance professionals monitor how organisations are progressing in their environmental efforts, enabling more informed dialogue on climate risk and sustainable finance. For organisations seeking to attract sustainable investment, higher CDP Scores can indicate robust environmental practices, potentially enhancing their appeal to investors prioritising ESG criteria.
Overall, CDP Scores is a valuable resource for finance professionals, providing insights into an organisation’s environmental practices and helping to evaluate risk and opportunity within the context of sustainable finance.
