CDP climate disclosure reporting: Understanding the Essential Criteria

The CDP framework has become a global benchmark for environmental reporting and action. Last year, the CDP introduced the concept of ‘Essential Criteria’, which has been placed at the heart of the scoring methodology. Cesar Carreño, Director at Nexio Projects, outlines what the Essential Criteria are, the role they play in the scoring methodology and how companies can effectively perform against these criteria.

CDP’s Essential Criteria are a set of specific, non-negotiable requirements that organisations must meet at each scoring level – Disclosure (D), Awareness (C), Management (B), and Leadership (A). They apply to each theme (Climate Change, Water Security, Forests) and, crucially, to every scoring level – not just the top tier anymore.

That means that mastering the Essential Criteria is not optional – it’s the key to unlocking the full scoring potential. Additionally, if you fail to meet all Essential Criteria for a given level, your score is automatically capped at the previous level, regardless of your total points or achievements elsewhere.

So, what are the Essential Criteria? An overview:

How essential criteria affect scoring

Essential Criteria act as a series of gates. You must pass each one to progress to the next scoring level. Here’s how it works:

• Disclosure (D): Entry-level reporting; must answer all required questions.
• Awareness (C): Must meet all Awareness Essential Criteria (e.g., process for identifying and managing risks, board-level accountability).
• Management (B): Must meet all Management Essential Criteria (for example: detailed risk assessment across the value chain, board oversight frequency).
• Leadership (A): Must meet all Leadership Essential Criteria (for example: 1.5 degrees Celsius aligned transition plan, third-party verification of emissions).

If you miss even one essential criteria at any given level, you remain at the previous level – with no exceptions.

In a nutshell: At the Awareness stage, companies must both have a process in place for identifying, assessing, and managing environmental risks and opportunities (EC-CC1) and provide detailed evidence of that process. If either requirement is missing, the score is capped at Disclosure (D/D-).

Progressing to the Management level, the criteria become more specific: organisations must demonstrate that their risk management process covers direct operations, the upstream value chain, or the downstream value chain, and must also disclose how frequently environmental issues are addressed at the board or equivalent governing body (EC-CC1, EC-CC3).

If these are not met, the score cannot advance beyond Awareness (C/C-). For Leadership, the bar is set at having a 1.5 degrees Celsius aligned transition plan, a plan with a different temperature alignment, or a credible plan to develop one within two years (EC-CC7). Without this, the score is capped at Management (B/B-).

This stepwise approach underscores how CDP’s methodology ensures only organisations with robust, transparent, and board-supported climate strategies reach the highest scores.

Key topics in essential criteria

While the specifics vary by theme and sector, several topics consistently appear as Essential Criteria across CDP’s questionnaires:

• Public disclosure of environmental response
• Board-level governance and competency
• Risk and opportunity identification and management
• Science-based target setting
• Supplier engagement and value chain coverage
• No significant exclusions in reporting

Climate Change remains the most demanding theme, with Essential Criteria at both Awareness and Management levels, while Water and Forests apply most criteria at higher levels.

Practical steps to master Essential Criteria

An overview of steps to master the Essential Criteria and how to avoid common pitfalls:

1. Start early and map your gaps
   Conduct a gap analysis against the Essential Criteria for your theme and sector. Identify missing processes, documentation, or data early in the year.
2. Tailor responses to your sector
   Use CDP’s sector-specific guidance to ensure you’re meeting the right criteria for your industry.
3. Prioritise quality over quantity
   Detailed, evidence-backed responses to Essential Criteria questions matter more than exhaustive answers elsewhere.
4. Prepare for third-party verification
   For Leadership-level scores, ensure you have third-party verification of Scope 1 & 2 emissions (≥ 95%) using accepted standards such as ISO 14065.
5. Document board involvement and competency
   Clearly describe the roles, expertise, and frequency of board-level oversight on environmental issues.
6. Provide complete answers in the questionnaire
   A single vague or incomplete answer (for example: stating ‘Unknown’ for risk likelihood) can block progression to higher levels. Provide both qualitative and quantitative details wherever possible.
7. Don’t waste time on non-scored questions
   Focus your resources on questions linked to Essential Criteria and scoring. Some questions are “nice to have” but do not affect your score.
8. Ensure documentation or evidence
   You may be doing the right things, but if it’s not documented or clearly described, it won’t count. Ensure all processes, board roles, and targets are well evidenced.