When it comes to collaboration between non-profits and the industry, CDP’s role is to bring best practices to companies at scale, and then help the industries align on their asks from suppliers and publicly traded companies through our standardized questionnaires, and then deliver that data back to the marketplace.
This is also the value of having targets validated by the Science-Based Targets Initiative. They create frameworks based on climate science to show how companies are setting targets in line with what’s required to keep global temperatures down to that 1.5-degree Celsius threshold.
There’s a healthy tension between having the ability to communicate credible outcomes and impact. You want to invest in the impact much more than you want to invest in the measurement and verification, and sometimes those can get upside down. In agriculture, we’ve done some it can become quite costly when you need to take soil samples in a grid, and all of a sudden half of the investment is going to all of the sampling.
This is where innovation and technology can come in to help us. We need better models, we need better science, and we need to be able to leverage and trust remote sensing. Those tools and systems need to be developed so that we can spend most of our money on actually driving the impact we need to drive.
What reporting requirements do is elevate sustainability reporting to the same level of importance as financial reporting, which over the long run, will be critical to ensuring that ESG is at the core of company strategies. One thing that I like to point out is that the regulations build on current existing standards. Frameworks and standards like TCFD, ISSB, GRI, and lately, net-zero standards and science-based targets. All of these voluntary disclosure frameworks that CDP among others has been championing for years are essentially the basis of what the regulations are inspired by and based on.