Used to reporting financials as business as usual, companies are now being called upon to disclose their impact and approach on environmental, social, and governance (ESG) factors that materially affect their business. CDP—also known as the Carbon Disclosure Project—is one of the leading frameworks.
The Carbon Disclosure Project (CDP) is widely regarded as the ‘gold standard’ for corporate environmental reporting. With climate change high on the list of inquiries and conversations from all stakeholders, it wasn’t hard for Clarios to choose this reporting framework to live up to our commitment of transparency, one of the five points of our sustainability blueprint.
As a global leader in in energy-storage solutions, Clarios takes sustainability seriously. Our battery systems power mobility all over the world, and we pioneered a circular economy to ensure the safe recycling of automotive batteries with up to 99% of the materials having the ability to be recovered, recycled and reused. Reporting our environmental impact through CDP is one more step to hold ourselves accountable and meet the needs of our customers and investors. Our stakeholders can now access Clarios’ environmental standards and that of other key network suppliers in order to gauge their own climate-related risks and efforts to share them with the public.
Initially focused on climate, CDP has expanded reporting to include deforestation and water security, awarding ‘grades’ in response to information provided by companies who disclose through them. Companies are either requested to respond to or opt into one, some, or all of the reporting frameworks. These frameworks share the same general approach—requesting general company information, supporting data, associated risks and opportunities and supply chain information.
Reporting our environmental data through CDP is an important milestone in our company’s journey. This reporting allows our customers to receive an accurate picture of our impact and commitment as we track and benchmark our progress on making a lasting impact on safeguarding our planet.
When Clarios became a new company in 2019, we made CDP reporting a priority with a 2020 submission. Our August 1, 2022 submission is awaiting scoring. This was the second CDP submission in which I played a key role. My involvement and key learnings during the process has spurred me to provide advice for others just undertaking or considering CDP reporting. Here are four pieces of advice for anyone leading the effort in their company:
1. Do not procrastinate!
Responding to CDP is time consuming. It takes time, effort and cross-functional teamwork to put together a quality report that will satisfy the requirements of CDP.
2. Form a cross-functional team.
There are 15 climate-specific sections in addition to the section for supply chain. It’s highly unlikely that a single person can track down or hold all that knowledge. Instead, is much more reliable when you incorporate the subject matter experts. Involving individuals from Environment, Health, and Safety (EHS); Enterprise Risk Management (ERM); Legal; Industry and Government Relations; and Procurement was especially helpful. Involving the subject matter experts in these areas was crucial for two reasons. First, it ensures you have the most reliable information. Secondly, their active participation helps to inform the functions in our business on what future trends may be and what customers are or may start requesting from us specifically. This keeps our ESG program robust and responsive to the ever-changing climate change arena.
3. Read the scoring guidance!
Companies receive a ‘grade’ between A and D-, based on how they respond to questions. The tricky part is it’s not just based on whether or not you respond. There is a multi-level scoring process that reviews the content for each individual question. The more detail the better, but it is crucial to read the guidance CDP provides for each individual question in order to respond in the most effective way and gain the most points possible. Responding to the narrative questions is not just reading the questions and providing comments—you need to hit on the hidden nuances in the question—and you won’t know those until you hit that “Show Guidance” button. (This is the best way to gain more points as you go through the process).
4. Don’t be discouraged by your final scores.
A ‘C’ grade might not feel good to people who are used to getting all As’, but a ‘C’ (or ‘Awareness’ rating) is impressive in the first years of reporting. Yes, there are situations in which businesses rely on receiving a certain score on the CDP report to continue business, but it’s important to remember that this is an evolving space. Each year there are new questions added, questions modified, and new sections created to respond to new requirements. This reporting framework can be just as important as informing your business as it is about reporting requested information. Going through this process sets up the reporting business for future success as CDP is aligning itself with potential requirements—and provides the data that enables you to improve practices that will ultimately change your score. In other words, if you report to CDP and use the framework to help guide your climate strategy you are already well on your way to adhering to other frameworks (TCFD) and potential regulations (SEC proposed rules).
Clarios’ commitment to integrated sustainability requires us to continue to push forward on multiple fronts, including responding to requests for transparent data, like CDP. We acknowledge climate change and are dedicated to creating products that support the innovative actions needed to respond.
This post, originally published in WholeWorks Connects, is reprinted here with permission.
Photos courtesy of Clarios and by Asia Chang on Unsplash, respectively.
About the Author:
Samantha Young is an Environmental, Health, and Safety (EHS) Analyst at Clarios. She is a graduate of the University of Wisconsin – Oshkosh with a Masters of Science in Sustainable management with a focus in this program was corporate leadership in local communities. She currently leads CDP disclosure, supports the completion of the United Nations Global Compact Communication on Progress, and is a key member in corporate ESG reporting for Clarios. She earned her ‘Leading the Sustainability Transformation’ Professional Certificate powered by WholeWorks in 2022.