CDP questionnaires open in June: Is your organization ready?
In this edition of BDO Sustainability Insights, we highlight strategies to get the most out of the important, but often stressful, CDP process. We also take a look at developments in U.S. state-level sustainability policy and identify steps to prepare your emissions data for assurance. Plus, get insights on common business challenges that sustainability can help address and from our 2025 CFO Sustainability Outlook Survey — both show the business case for sustainability remains strong.
FEATURED INSIGHT
Getting The Most Out of Your CDP Questionnaire
Is your organization ready to submit to CDP?
Each year, procurement customers and financial institutions ask organizations to provide information about their environmental impacts and programs through CDP’s questionnaire. Nearly 25,000 companies submitted in 2024.
Responding to CDP can impact your organization’s access to business and financing opportunities. However, it can also be a time-consuming, and even stressful, commitment. Use these strategies to help guide your organization through an efficient, insightful CDP process.
- Streamline CDP into your sustainability reporting program. Sometimes CDP is approached as a standalone exercise, but the questionnaire lends itself to coordination with other sustainability reporting efforts. CDP aligns partially or in full with several global standards and frameworks, so organizations can leverage the same, or similar, disclosures to help meet multiple communication and stakeholder needs. Utilizing double materiality assessments from other reporting can also make responding to parts of the questionnaire much easier.
- Answer all of each multi-part question, and take an inventory of your environmental programs and processes. CDP’s scoring system takes a stair-step approach, meaning that eligibility for some points relies on first meeting certain baseline disclosure and performance criteria. Due to this structure, skipping over parts of questions, inadequate answers, and a lack of environmental programs and processes can all have a negative, cascading effect on overall scores.
- Leverage insights to help enhance environmental performance and business integration. CDP aims to help organizations reduce their environmental impact, and insights gained during the reporting process can be used to identify areas where performance (and sometimes data) is lacking. Coverage of environmental-related financial effects and risks can help integrate sustainability into broader business objectives and Enterprise Risk Management (ERM). Additionally, questions tailored to specific business models and small and medium-sized enterprises (SMEs) can help organizations focus on issues most relevant to their industry and business size.
Why It Matters
Purchasing organizations, asset owners and managers, banks, and insurers ask organizations to reply to the CDP questionnaire, then use the answers to inform decision-making. More than 300 organizations, with a total purchasing power of $6.4 trillion, use questionnaire data to evaluate their suppliers, according to CDP. And more than 700 investors, with total assets worth $140 trillion, utilize the data. Responding to CDP can help build trust with these stakeholders. Answering the questionnaire, which organizations can also choose to do proactively before being formally asked to submit, can help create competitive advantage and enhance brand reputation.
CDP’s 2025 disclosure cycle opens in June. Contact BDO for help preparing your response.
REGULATIONS & STANDARDS
U.S. State-Level Sustainability Policies
Federal rollbacks, combined with concerns over the economic impacts of climate change and pollution, mean that businesses could soon see additional uptick in sustainability-related action from state governments. States, along with local authorities, are also taking a hard look at their own long-term planning and critical infrastructure in order to boost resilience to extreme weather.
Here’s a look at a few areas where state-level policies and programs are already in place and where activity could ramp up further.
- Climate Reporting: Despite legal challenges, businesses subject to California’s emissions and climate risk reporting rules (SB 253 and SB 261) must begin reporting in 2026. Momentum for state-mandated climate reporting could increase, as similar bills have been proposed this year in the Colorado, Illinois, New Jersey, and New York state legislatures. Additionally, as part of efforts to enhance resilience to extreme weather, nearly half of U.S. states require large insurance companies to report their climate risks through the NAIC Climate Risk Disclosure Survey.
- Extended Producer Responsibility (EPR): Several states have established EPR programs that hold producers responsible for products over their entire life cycle — requiring them to join waste prevention and management organizations and pay fees to fund the efforts. EPR rules encourage enhancements to the sustainability of product design, with the types of covered products varying by state. Packaging is one example, covered by EPR requirements in California, Oregon, Colorado, Minnesota, and Maine.
- Sustainable Finance: States are deploying funding solutions to further catalyze clean energy investment, upgrade infrastructure, and pay for other climate change adaptation projects. Green banks and commercial property-assessed clean energy programs (C-PACE) are becoming common mechanisms to help property owners reduce their environmental impact and improve the weather resilience of their buildings. California and New York have both established climate bonds for environmental projects and infrastructure improvement. Climate Superfunds and cap-and-trade (or cap-and-invest) emissions programs are other emerging funding models.
Why It Matters
State and local policies and programs form a mixed terrain for both public and private companies to navigate. They establish compliance requirements, such as emissions reporting, which will be challenging for many organizations to fulfill. They also create opportunities to innovate or upgrade infrastructure. With or without government action, proactively addressing areas like stakeholder demands for transparency, sustainable product design, and climate risk planning can help build more resilient business models.
HOW TO SERIES
How To Prepare Emissions Data for Sustainability Assurance
Read on to learn what sustainability assurance is and how to prepare your emissions data for independent, third-party attestation.
What is Sustainability Assurance?
Sustainability assurance — also called ESG assurance or attestation — is similar to a financial audit or review conducted by a certified public accounting firm. However, it covers an organization’s sustainability-related disclosures rather than financial statements and related footnotes.
Sustainability assurance is conducted by a qualified independent firm, which issues a report upon completion of the engagement, and can be conducted at two levels:
- Limited (also called review): A foundational level of assurance which states that the auditor is not aware of any material modifications that should be made to reporting.
- Reasonable (also called examination): A higher — though not absolute — level of assurance which states that the reporting is fair, balanced, and materially correct.
How Can Organizations Prepare Their Emissions Data for Assurance?
Preparing emissions data for assurance is a demanding, multi-faceted process that organizations should start well before they plan to report. If time permits, organizations can begin by undergoing a sustainability assurance readiness assessment.
Steps to prepare include:
- Assemble a working team. Employees responsible for calculating their organization’s emissions will need to be available throughout the engagement to answer questions and provide information. They may be new to the assurance process and could benefit from speaking with coworkers who have been part of financial audits.
- Flag third-party data and estimates. Emissions data relies heavily on estimates, often based on spend data, as well as third-party vendor and supplier data. Organizations will need to bring these to the auditor’s attention before the engagement begins.
- Collect source documentation. Organizations will need to provide an audit trail of source documentation that supports the emissions data. These may include utility bills, statements from fuel purchase cards, and reports from business travel providers.
- Be ready to discuss processes and controls. Teams will need to show auditors their processes for emissions data collection and calculation, as well as controls that are in place. This will include methodologies used, such as the Greenhouse Gas Protocol, and use of any carbon accounting software.
Why Does Obtaining Assurance Over Emissions Data Matter?
Some regulations require organizations to obtain assurance over their emissions data, as do some sustainability-linked bonds or loans that offer lower interest rates for meeting performance targets. Organizations may also be asked for emissions data by their business partners and investors, or as part of M&A due diligence, and data that has undergone assurance is viewed as more reliable. In addition to enhancing credibility, assurance can help organizations strengthen the internal controls, processes, and overall quality of their carbon accounting.
Contact Us
Whether you are starting your sustainability journey, seeking assurance on your reporting, need help with tax transparency and credits, or other services, BDO Sustainability & ESG services and solutions can help.