CDP to Align with ISSB Climate Disclosure Standard in 2024
Climate research provider and environmental disclosure platform CDP announced today that it will align its sustainability reporting questionnaire with the IFRS Foundation’s International Sustainability Standard Board’s new climate disclosure standard beginning this coming year, and to consider other emerging sustainability disclosure systems going forward, in order to ease the reporting burden on companies, and encourage broader reporting on key environmental issues.
CDP runs a global environmental disclosure system, enabling investors and other stakeholders to measure and track organization’s performance in key environmental sustainability areas including climate change, deforestation, and water security. The platform provides annual scores for companies – typically released each year in December – on each of the key categories, and the data is also used by information services providers such as Bloomberg, STOXX, Trucost, FTSE/Russell, MSCI and ISS ESG to power investment research, products, indices and ratings.
The ISSB was launched in November 2021 at the COP26 climate conference, with the goal to develop IFRS Sustainability Disclosure Standards, driven by demand from investors, companies, governments and regulators to provide a global baseline of disclosure requirements enabling a consistent understanding of the effect of sustainability risks and opportunities on companies’ prospects. The board launched its inaugural general sustainability (IFRS 1) and climate (IFRS 2) reporting standards in June 2023, and the new standards are expected to inform emerging disclosure requirement systems from many regulators globally.
ISSB Chair Emmanuel Faber said:
“CDP’s work towards alignment with the IFRS S2 is incredibly welcome and timely, as it will further ease the reporting burden for thousands of companies, moving us one step closer to a common language for disclosures, while improving the consistency of climate-related information for investors and accelerating their access to this data. As companies prepare to implement the ISSB standards, it is positive to see yet another year of growth in voluntary disclosure through CDP.”
CDP also announced plans to consider additional sustainability reporting standards, including reflecting the new Taskforce on Nature-related Financial Disclosures (TNFD) framework in its questionnaire from next year, and to reflect the SEC’s upcoming climate disclosure rule, as well as the European Sustainability Reporting Standards in its disclosure system.
The CDP’s announcement was made alongside of a report indicating a continuing surge in companies disclosing on key environmental issues through its platform. According to the CDP, a record of more than 23,000 companies disclosed through CDP in 2023, up 24% over the prior year. With this year’s record results, companies worth $67 trillion – more than 66% of global market cap – are now disclosing data on climate change, deforestation and water security through CDP.
Sherry Madera, Chief Executive Officer at CDP said:
“With over 23,000 businesses disclosing through CDP this year, it is clear that sustainability – and the data that underpins it – is not a ‘nice to have’, but an essential part of long-term success in the business community that is showing no sign of slowing down – nor should it.”