The Carbon Disclosure Project (CDP) is a UK-based non-profit that gathers and discloses greenhouse gas emissions records for the world’s corporations. In operation since 2000, the organization has reportedly built the most comprehensive corporate greenhouse gas emissions database. The group recently announced that at least 30 U.S. urban centers will participate in their surveys as well under the new CDP Cities program. This program is designed to profile the emissions output from urban municipal functions, including police and fire agencies, municipal buildings, waste management and other city services. The compiled data can then be used for competitive efforts in the market for business, investment, employment talent, and quality of living ratings.

Participating cities will gain a better understanding of their produced pollution and, as the CDP hopes, will be able to better manage it. The first 21 cities to participate in the program are: Albany, New York; Albuquerque, New Mexico; Anchorage, Alaska; Arlington, Virginia; Burlington, Vermont; Denver, Colorado; Dubuque, Iowa; Edina, Minnesota; Fairfield, Iowa; Haverford, Pennsylvania; Las Vegas, Nevada; New Orleans, Louisiana; New York, New York; North Little Rock, Arkansas; Pacific Grove, California; Park City, Utah; Portland, Oregon; Rohnert Park, California; Saint Paul, Minnesota; Washougal, Washington; and West Palm Beach, Florida.

CDP’s History with Corporations

CDP’s goal is to build relationships between shareholders and corporations by informing shareholders of the business risks and opportunities presented by corporate behavior. The organization is funded by multiple agencies and charities, including: DEFRA (UK), Environmental Protection Agency (U.S.), VROM (Netherlands), NUTEK (Sweden), DOEN Foundation (Netherlands), Esmée Fairbairn Foundation (UK), Nathan Cummings Foundation (USA), Oak Foundation (Switzerland), WWF (Germany, India and UK), Renewable Energy and Energy Efficiency Partnership (REEEP), Merrill Lynch, Pictet Asset Management and AXA.

During its eight year existence, the CDP has worked with shareholders and corporations in an effort to disclose their greenhouse gas emissions. In 2007, the firm published a report that presented data on 2,400 firms. CDP leverages its gathered data by making available its information requests and responses to policy makers, consultants, marketing and accounting firms, and a host of other firms positioned to utilize the results for progressive purposes. CDP also assists multinational organizations to collect climate change data from their suppliers.

Methodology of Measuring Corporations

The CDP approach is quite novel. They first submit a request for participation and questionnaire to major corporations.

The one-page letter states that they may be a current or future investor in the company, and that they seek to examine the potential risks and opportunities related to climate change, and to improve their understanding of possible impacts on the value of the investments the firm holds. (CDP provides a coordinating secretariat for institutional investors with combined assets of over 57 trillion dollars.) Their inquiry addresses: taxation and regulation, changes in the climate system, technological innovations, and shifts in consumer attitude and demand.

The letter is authored by Paul Dickinson, co-founder and CEO of CDP. Accompanying the letter is a list of CDP’s 2008 Signatory Investors. The CDP has inquired into 2,800 firms and received 1,300 responses.

A detailed look into the Carbon Disclosure Project Questionnaire reveals the inclusiveness of the CDP’s interest. The questionnaire is divided into four categories.

Risks and Opportunities makes inquiries into how a company may be exposed to regulatory risks, physical risks, and general risks from climate change, as well as what action the company has taken to address them, and what financial and business implications may exists. Also addressed is what, if any, opportunities exist as a result of climate change, and how they could be maximized. When examining the opening aspect of the questionnaire, it is clear that CDP’s efforts are not only designed to obtain data, but to spur ideas from the corporations for possible creation of new business approaches.

Greenhouse Gas Emissions Accounting provides a method for corporations to review accounting standards and parameters associated with greenhouse emissions as well as to report on the chosen methodology used to calculate their emissions; CDP breaks down such emissions into direct and indirect types. Under the section Other Emissions, the questionnaire inquires into such categories as: Employee business travel, External distribution/logistics, Use/disposal of products and services, and Company supply chain. It also seeks external verification and audit information and requests documentation accordingly. Emissions history and trading programs that the corporation may be utilizing is also covered, as well as information identifying total energy costs-consumption and percentage of total energy consumption with regards to total operating costs.

Performance addresses what type of reduction plans are in place, baseline measurement goals, activities to reduce emissions, and what investments and planning specifics are being undertaken to achieve target emission rates.

Governance addresses Responsibility, Individual Performance, Communications, and Public Policy efforts undertaken by the corporation.