The CDP is an international, not-for-profit organization providing the only global system for companies, investors, schools and cities to measure, disclose, manage and share environmental information. They now hold the largest global collection of primary climate change, water and forest-risk information. The CDP not only motivates companies to disclose their impacts on the environment and natural resources, but also take action to reduce them.

For over a decade, CDP has worked with companies to catalyze action toward more sustainable economies. Initially, CDP requested member companies to report on greenhouse gas emissions, energy use and associated climate change risks and opportunities. As CDP's reach has broadened to include governments and investors, so too has its scope. CDP is not just for carbon anymore; there is also reporting for water use, supply chains, and forests. With this expansion come four sometimes overlooked advantages.

1. Join a powerful group of reporters with positive results

Over 1,000 companies in the United States and almost 3,000 companies worldwide currently report to Climate Change CDP. This total includes two-thirds of the S&P 500. Report to CDP and join this growing group of leading companies.

If this fine company is not tempting enough, consider this: Global 500 companies that have demonstrated leadership in carbon disclosure or performance yielded twice the average share price return of the Index as a whole between 2005 and 2011. The reporting companies note business opportunities and emissions reductions as a result of reporting. Seventy-eight percent of these reporters see business opportunities related to addressing sustainability issues – up from 59 percent in 2012.

Moving beyond carbon, CDP launched its Water Program in 2010 to help address the growing global water crisis. While all companies are invited to report, CDP currently sends the water questionnaire to the world's largest companies from industry sectors that are water-intensive or that are particularly exposed to water-related risk in their supply chains. Many of these companies are among the largest 500 companies globally (FTSE Global Equity Index Series), largest 100 Australian companies (ASX 100), and the largest 100 South African companies (JSE 100).

A natural expansion from the focus on climate, CDP's Forests Program, formerly known as the Forest Footprint Disclosure Project (FFD), allows CDP to serve as an integrated source of information on the interrelated risks from climate, water and forests. Deforestation currently accounts for about 15 percent of the world's greenhouse gas emissions, equal to the entire transport sector. This new program will help companies understand their exposure to deforestation risks from the key products driving forest loss: timber products, palm oil, soy, cattle products, and biofuels.

2. Make yourself transparent to a large group of investors.

The investment community is now aware of the risk climate change presents to their portfolios, with investors using CDP information to make strategic investment decisions. Companies that have evaluated and protected themselves against their climate risk, and are reporting it transparently, are now recognized as less risky investments.

The latest carbon information request by CDP was made on behalf of 722 institutional investors with $87 trillion in assets. This year's water request included 530 investors representing $57 trillion in assets. As CDP shares climate change and water information for use in business investment and policy decision-making, investors report that they are including critical social and environmental issues in their considerations, to reduce risks and take advantage of opportunities. While CDP's forest program (180 investors with $13 trillion of assets) is smaller, we can expect the number of investors seeking to understand deforestation risk to grow in coming years.

3. Identify risks to reveal opportunities to save money and avoid losses

As the CDP questionnaires ask responders to identify risks from climate change, water and deforestation, companies are prompted to confront and prepare for losses associated with climate change, sea-level rise, water scarcity,and deforestation, to name a few.

In 2013, over three-quarters of S&P 500 respondents disclosed exposure to climate change across physical, regulatory, and other risk drivers, an increase from two-thirds in 2012. Extreme weather topped the list of risks identified followed by: change in precipitation or drought; tropical cyclones; company reputation; carbon taxes; and cap and trade programs.

Water questionnaire respondents reported that they have: measured the criticality of water to their businesses; identified the location of water supply vulnerabilities arising from factors such as drought; and planned for potential disruptions to minimize risk.

4. Benchmark your data and confirm results using CDP verification

By reporting to CDP, reporters can benchmark and compare data to competitors. Whether it is climate, water, supply chain or forests, CDP drives reporters to gather relevant data, and this benchmarking allows companies to set a baseline and work toward goal setting. As part of CDP, reporters can then compare their results to other companies.

All CDP reporters can benefit from having an independent expert review their report. The CDP verification process reviews both the climate data and the associated calculations. These third-party verifiers can help your company identify and address inefficiencies, errors and gaps in the reports. Verification enables reporters to continuously improve the data that is collected and that feeds into cost savings.

Verification is not currently required by CDP but it is encouraged through the scoring methodology. The methodology allocates a significant percentage of the scores to verification: 9% – 13% of total points under the disclosure score and 15% – 17% of total possible points under the performance score. Verification not only improves your CDP score, it also helps your company improve data accuracy data for future projects.

If you don't report to CDP now, consider starting. Your commitment to transparency will help you manage risks, support forward-looking programs, and attract investors. By reporting, you will be joining a very powerful group of business people and investors, and you will also be leveraging the sophisticated climate, water and forest data management systems of this cutting-edge organization.

Be sure to join Pure Strategies for our free webinar, Optimizing the Business Value of the CDP Reporting Process, on [date]. For more information or to register, click here.

Also check out our recent blog on CDP's 2013 Annual Report Launch.

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