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Reliable, relevant GHG emissions data is a prerequisite for an effective decarbonization strategy. It¡¯s also a core consideration in the CDP¡¯s assessment of an organization¡¯s climate impact. As you progress on your climate disclosure journey, you¡¯ll need increasingly granular and comprehensive data.?

In this article, we discuss how you can improve data quality in your CDP report and lay the groundwork for future disclosure demands and high-impact emissions reductions.?

Why Is Data Quality Important in CDP Reporting??

Stakeholders need to understand how reliable a company¡¯s data is

A growing number of stakeholders rely on the CDP for reliable information about the sustainability impacts of organizations around the globe. In 2024, ¡ª including some of the largest in the world ¡ª submitted reports to the CDP.?

When a customer or investor requests disclosure through CDP, the reporting company fills out a questionnaire about its impacts on climate, deforestation, water security, and/or biodiversity. CDP then assigns a score, based largely on the thoroughness and transparency of the company¡¯s answers.

GHG emissions data is a cornerstone of CDP reporting, but not all data is created equal. Stakeholders who request disclosure through CDP need to understand how reliable and complete a company¡¯s data is. This is especially true in today¡¯s environment, where greenwashing is rampant and sustainability claims face growing scrutiny.?

What Emissions Data Do You Need to Report to CDP??

CDP asks for disclosure of scope 1, 2, and 3 emissions

In addition to scope 1 and 2 emissions, CDP asks companies to share their global scope 3 emissions, broken down by each of the fifteen categories, with explanations for any exclusions. Calculating scope 1 and 2 emissions is typically straightforward ¡ª for example, you¡¯ll use company utility bills to get measurements of electricity consumption from your operations.? Scope 3 is much more complex. CDP will ask for your calculation methodology and whether or not your has undergone assurance. You should be aware that CDP will score based on the completeness of your answers, so it¡¯s wise to disclose even if you haven¡¯t yet taken action in a particular area.?

CDP aligns with the Greenhouse Gas Protocol for emissions accounting, which accepts spend-based estimates for scope 3 emissions. While granular, activity-based data from suppliers is more useful for decarbonization, companies reporting to CDP will not be docked for using spend-based estimates ¡ª they just need to be transparent about the methodology they¡¯re employing. However, to respond to growing climate risks and a rapidly evolving climate disclosure landscape, you should begin with your long-term reporting needs in mind.?

Best Practices for Improving Data Quality

Maturing your data for greater actionability and transparency

If you¡¯re just getting started with CDP disclosure, your priority should be to answer all of the questions as transparently and thoroughly as possible (remember not to leave questions blank). To lay the groundwork for steady improvements in data quality, you can follow these steps:?

1. Implement Centralized Data Collection Methods

Robust reporting demands that you manage different types of data from a wide range of sources, so it¡¯s essential to establish a centralized data collection method early on. Automated carbon accounting software is the best way to ensure consistency, prepare for auditing, and create a single source of truth within your company. It can also greatly streamline management of scope 3 supplier data, which can be particularly unwieldy. It¡¯s helpful to choose a carbon accounting platform that offers a one-click export that will populate your emissions metrics directly into the CDP questionnaire.?

2. Determine Which Data is Material

Calculating emissions can seem overwhelming, especially when it comes to scope 3. You¡¯ll first need to identify which of the 15 scope 3 categories are most material for your company. With the right support, this can be relatively painless. For example, if you¡¯re using Â鶹ԭ´´ Sustainability Reporting, you¡¯ll receive recommendations about which categories are most material for different sectors, so you can narrow the list down to 2-4. This allows you to begin CDP reporting with confidence while you develop muscle for more robust scope 3 disclosure.?

3. Identify Data Locations and Calculation Methods

Once you know which data you want to report, you need to understand where to find it. Collecting data can be time-consuming, especially in a large, heavily matrixed organization. You¡¯ll likely need to reach out to your accounting, logistics, and operations teams, to name just a few. This is another area where technology can help. For example, if you use Â鶹ԭ´´ Pro, you¡¯ll get instructions on where to find specific types of data in your company, as well as different methodologies for calculating each scope 3 category. It will also help when you¡¯re ready to engage your supply chain to collect more comprehensive scope 3 data ¡ª you can share the free platform directly with your suppliers to facilitate data exchange.?

4. Plan to Transition to Granular, Activity-Based Data

When you¡¯re first starting out with climate disclosure, you can use spend-based estimates to meet baseline reporting requirements ¡ª as mentioned above, CDP has approved spend estimates for all 15 scope 3 categories. But if you¡¯ve made public decarbonization commitments, you¡¯ll eventually want to evolve your data. The problem with spend-based estimates is that they create a scenario in which you can only drive down your emissions numbers by cutting your spending, which typically makes little business sense. Activity-based, granular data will better equip you to make effective reductions. To obtain more granular data, you¡¯ll need to coordinate closely with different functions within your company, and it helps if you can clearly articulate the business value of your effort.?

Begin With the End in Mind

CDP disclosure is a journey. If you¡¯re new to the process, you should focus on answering CDP¡¯s questionnaire as thoroughly as possible using data that¡¯s readily available, then plan to transition to more granular and complete data. One of the best ways to set yourself up for success is to find a CDP reporting platform that will scale with you. Â鶹ԭ´´ Pro offers a unique solution on this front. Because it doesn¡¯t cost anything, there¡¯s a very low barrier to entry. But unlike other free calculators, it¡¯s sophisticated enough to meet increasingly complex reporting requirements and prepare data for auditing under policies like the Corporate Sustainability Reporting Directive (CSRD).

The bottom line is that the climate disclosure landscape is rapidly evolving, and you don¡¯t want to have to reinvent the wheel with each new reporting mandate or stakeholder request. By aligning your CDP reporting with your long-term sustainability goals from the start, you¡¯ll be ready to steadily improve your data quality ¡ª and ultimately, build a climate program that will protect business value and help future-proof your organization.?

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Report to CDP with confidence. Sign up for Â鶹ԭ´´ Pro for free.?

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