When you think about non-governmental organizations focused on environmental issues, you might think of Greenpeace, Sierra Club, World Wildlife Fund, Environmental Defense, The Nature Conservancy, Conservation International, or the Natural Resources Defense Council. For decades, these powerful organizations have launched global pressure campaigns, attracted many millions of members, and in recent years they have even worked closely with former enemies (large corporations) to change business as usual.
But by wielding a tool more powerful than legal action, protests, or even partnership, a relative upstart -- the Carbon Disclosure Project (CDP) -- has rapidly become the NGO to watch.
CDP and its backers are basically demanding transparency -- that's the powerful idea that makes the NGO so strong.
The UK nonprofit began in 2000 with a simple idea: ask the world's largest companies to publicly share information about their carbon emissions and the actions they're taking to manage them. I spoke recently with CDP executives and then attended the recent launch of their 2010 annual report to find out just how far they have come. It's pretty far: of the 500 largest companies in the world, an astonishing 82% now answer the CDP's questions.
But since some corporate executives might find it unwise to share so much data, why do they answer CDP when it comes calling? Well, it's not just CDP that's asking. CDP 's "members" include 534 of the world's largest banks and institutional investors, representing $64 trillion under management. This smart NGO was always intended to give voice to concerns about climate risk stirring within the investment community.
Stepping away from the old-style NGO approach to companies, the CDP and its leaders are both optimistic and relentlessly pro-business. At the core of the organization's mission is a commitment to the power of data to improve business performance (which I wholeheartedly agree with), and a strong belief that for companies that tackle climate change, the opportunities far outweigh the risks.
The latest report bears this last point out: large companies are moving from an emphasis on risk management to "one that now also embraces opportunity." Over one quarter of respondents are developing products and services to help their customers cut emissions. "Corporations are critical to the delivery of solutions to climate change," CDP founder Paul Dickinson summed up.
CDP also plays a critical role in driving transparency on carbon emissions globally. Christiana Figueres, the UN's Climate Secretary said at the launch, "CDP is to the future of business what the X-ray was to the then-future of medicine -- without it, we would never have seen the insides of the patient's health."
The insight into corporate carbon practice that CDP provides would be enough of a reason to watch the organization closely. But recently CDP has made some interesting bids to expand its influence further, including:
- Highlighting performance, not just disclosure: CDP created a new Carbon Performance Leadership Index and praised 48 companies that demonstrate a commitment to strategy, governance, communications, and actual emissions reductions.
- Driving transparency up the supply chain: The CDP Supply Chain group organized respondents such as HP, Pepsi, P&G, and Tesco to prod their suppliers to answer the questions.
- Advocating specific solutions for combating climate change: CDP issued a report earlier this year, "The Telepresence Revolution," on the substantial carbon and cost savings from connecting virtually (they then walked the talk, using Cisco's Telepresence to seamlessly connect 5 continents during the meeting).
- Providing advisory support: The new CDP Reporter Services, in conjunction with Accenture, Microsoft, and SAP, helps companies to report emissions.
- Extending the issue list: Earlier this year, CDP launched its Water Disclosure Project, modeled closely after the original.
Although things could get muddy when the organization asking for data and transparency also advises companies and promotes particular solutions, CDP seems to be staying true to its overall mission with these brand extensions.
So keep an eye on this group that has managed to take a proactive, pro-business approach to a tough issue. Both CDP's report and website are quickly becoming core hubs of information on carbon performance and best practice. And investors and key customers are increasingly using this data to rate and judge companies -- and to determine how they invest and with whom they even want to do business.
This post first appeared at Harvard Business Online.