What Is a Carbon Disclosure Rating?

A carbon disclosure grade is a measure of a company’s environmental sustainability based on the company’s own voluntary disclosures. The practice aims to assist investors who want to consider environmental, social, and governmental (ESG) concerns while making investment decisions. CDP, originally known as the Carbon Disclosure Project, is a non-profit organization located in the United Kingdom that administers the most commonly used carbon disclosure ratings.
CDP’s carbon disclosure ratings are equivalent to the Amsterdam-based Global Reporting Initiative’s carbon disclosure ratings (GRI). GRI works with both enterprises and organizations, whereas CDP focuses on individual firms.