Understanding CDP in the banking and insurance context
The CDP (Carbon Disclosure Project) is an international initiative that collects and assesses annual environmental data from organisations across three themes: Climate, Water and Forests. For financial services players, responding to CDP means publishing a structured diagnosis of their climate risk exposure and impact reduction strategies.
The logic is different from that of an industrial company. A bank or insurer generates few direct emissions, but finances or covers high-emission sectors. That is precisely what CDP seeks to measure: the climate risks carried by the business portfolio, not just the emissions from offices and data centres.
Why banks and insurers respond to CDP
Financial services players respond to CDP under several types of pressure. Institutional investors — pension funds, asset managers — are increasingly asking their holdings to disclose climate data via CDP to assess portfolio risks. European financial regulators are pushing in the same direction, through the EU taxonomy, SFDR and the ECB's climate stress tests. Finally, some organisations choose a proactive approach, as illustrated by the Adenes case below: responding to CDP without any formal obligation, to differentiate themselves and get ahead of future requirements.
Other triggers complete the picture:
- Growing expectations from large corporate clients who are integrating climate criteria into their financial partner selection processes.
- Pressure from ESG rating agencies and responsible investment indices.
- Alignment with the CSRD for organisations subject to its reporting obligations.
CDP requirements: what is assessed for financial services
1. Direct and indirect emissions
Scopes 1 and 2 cover operational emissions: buildings, travel, energy consumption. For financial services, these are relatively limited compared to industry.
The real challenge lies in Scope 3, and more specifically financed emissions: the emissions induced by loans granted, investments made or insurance policies underwritten in carbon-intensive sectors. CDP integrates reporting of these emissions according to the PCAF (Partnership for Carbon Accounting Financials) standard.
2. Climate risks and opportunities
CDP assesses the robustness of climate risk analysis: physical risks (floods, drought, extreme weather events affecting insured or financed assets) and transition risks (regulatory changes, depreciation of carbon-intensive assets). Insurers are particularly exposed to the former.
3. Climate governance and strategy
The questionnaire evaluates whether governance is up to the task: board-level involvement, existence of reduction targets aligned with Science Based Targets, and integration of climate risk into credit or underwriting decisions.
Case study: Adenes achieves a B score on its first CDP assessment in one month
The Adenes Group, a major European risk management player in financial services (3,800 employees), is a perfect illustration of the proactive approach that sector companies can adopt.
With no CDP history and only one month to prepare, Adenes structured and submitted the full questionnaire with Ditto's support. The result: a B score on the very first attempt, when most companies start at C or D.
The three keys to this outcome:
- Strategic prioritisation: identifying the questions with the greatest impact on the score, without getting lost in the 200+ question questionnaire.
- Making the most of what already exists: structuring and documenting climate actions already in place, in the format expected by CDP assessors.
- Data centralisation: using the Ditto platform to bring together documents, evidence and responses in one place.
"It was our first CDP response and we got a B score. Ditto's support helped us structure the questionnaire and complete it quickly (1 month). I couldn't have done it without their help."
— Pablo Dion, CSR Project Manager, Adenes Group
Best practices for a successful CDP disclosure
1. Start with financed emissions
For a bank or insurer, this is the most structuring piece of work. Adopting the PCAF standard to calculate the emissions of the loan or asset under management portfolio is an essential step towards achieving a solid score.
2. Involve risk and investment teams
CDP preparation in financial services cannot stay within the CSR department alone. Risk, investment and compliance teams must be involved, as they hold the data on sector exposures.
3. Plan ahead: 2 to 6 months
A first CDP response with no prior history typically takes between 3 and 6 months. With structured expert support, this can be brought down to one month, as the Adenes experience demonstrates.
4. Create synergies with other frameworks
Data collected for CDP can feed into other obligations: EU taxonomy, SFDR, CSRD reporting. A centralised ESG platform avoids collecting the same information multiple times for different frameworks.
CDP for Banks and Insurance Companies — Key Takeaways
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