Laily UPN
Asro
Iffa Jayyana
Ammar Sabilarrohman
Nila Kartika Wati
Neng Nana
This April, beneath the gilded, neoclassical ceilings of Manhattan’s Gotham Hall, a tuxedoed crowd gathered to mark a milestone: the 25th anniversary of the Carbon Disclosure Project (CDP). For a quarter-century, the organization has stood as the gold standard of environmental transparency, acting as the bridge between corporate emissions data and the investors, policymakers, and supply-chain partners hungry for accountability.
At its peak, the platform commanded the attention of more than 22,000 respondents, representing nearly two-thirds of global market capitalization. Yet, the celebratory atmosphere in New York belied a brewing existential crisis. As the organization enters its second quarter-century, the corporate sector—long the primary engine of CDP’s growth—is showing signs of fatigue. Following years of bureaucratic friction, technical glitches, and rising costs, the unthinkable is happening: for the first time in its history, the number of companies reporting to CDP has declined.
As mandatory climate disclosure laws proliferate across the globe, a fundamental question has emerged: Has the organization become a victim of its own success, or is it facing an irrelevance trap in the age of government-mandated regulation?
A Chronology of Influence: From Obscurity to Global Hegemony
The trajectory of CDP is a testament to how voluntary initiatives can reshape global capitalism. When it launched in 2001, the concept of corporate environmental disclosure was in its infancy. In its inaugural year, CDP received only 235 responses. The landscape was defined by ignorance; as co-founder Paul Dickinson recounted in a 2022 podcast, one major logistics firm famously claimed it had no emissions to report—only to be reminded that its fleet of airplanes and trucks might suggest otherwise.
By the 2010s, CDP had moved from an outlier to an essential component of the ESG (Environmental, Social, and Governance) movement. It expanded its scope far beyond basic greenhouse gas accounting, incorporating water security, deforestation, plastics, oceans, and biodiversity into its questionnaire.
The organization’s "Supply Chain" program further cemented its status. By allowing large corporations to demand disclosure from their thousands of suppliers through a centralized portal, CDP created a standardized language for environmental impact that trickled down through every layer of the global economy. By 2025, more than 45,000 businesses were being nudged to disclose through this mechanism.
However, the "voluntary" era is drawing to a close. Today, climate disclosure is becoming a matter of law, with more than 40 jurisdictions—from the European Union and California to Qatar—implementing mandatory reporting frameworks. As Owen Hewlett, Chief Technical Officer at Gold Standard, notes, "It’s much easier to legislate for something if people are already doing it voluntarily. So, you’d have to say that CDP has been wildly successful."
Friction and Failure: The Cracks in the Facade
While success is evident, the relationship between CDP and its reporting base has grown increasingly strained. Sustainability professionals, once vocal advocates for the platform, are now trading horror stories of "opaque bureaucracy" and technical volatility.
The 2024 disclosure cycle served as a flashpoint. Technical glitches plagued the reporting season, leading to widespread confusion. In one instance, a prominent U.S. company was shocked to receive a "D" grade—a mark that threatened its reputation and its standing with investors. Upon internal review, it was discovered that a system error had misclassified valid data as "unanswered." While CDP eventually corrected the score to an A-, the damage to the organization’s credibility was palpable.
Shannon Joly, CDP’s Chief Marketing and Communications Officer, characterized these as "isolated problems" that were identified and resolved post-release. Yet, for the companies involved, these "isolated" incidents represent a significant administrative burden. Compounding this frustration was the 2025 news that CDP had slashed its workforce by 20%, a move intended to pivot funding toward technological infrastructure. For many, the timing of these layoffs, coinciding with a drop in reporting quality, felt like a breach of trust.
"Who wants to go through this process to get a score that might be lower than a major oil and gas company, only to find out the grading algorithm was broken?" remarked one transport-industry sustainability officer who now refuses to be scored.
Data and Disillusionment: The Impact of Mandatory Rules
The most significant threat to CDP is the rise of the International Sustainability Standards Board (ISSB) and the IFRS Foundation. As international standards coalesce around official, government-backed rulebooks, the "voluntary" incentive is fading.
A 2024 study from the University of Zurich, analyzing 3,400 companies across 36 countries, found a direct correlation between the introduction of local mandatory disclosure laws and a 5.5% decline in CDP participation. As Pamela Gill-Alabaster, a former sustainability leader at Mattel and Kenvue, observes, "CDP played a really essential role in building the market, but regulation has redefined the architecture for reporting. Companies are increasingly asking: ‘Why am I doing this twice?’"
When a company is legally required to file a sustainability report with a regulator, the cost and labor associated with a separate, voluntary CDP disclosure become difficult to justify to a CFO. For tech firms and smaller enterprises, the return on investment for the time-intensive CDP questionnaire is increasingly hard to quantify, especially if institutional investors are shifting their focus to official, audited regulatory filings.
Official Responses and the "Value-Add" Defense
CDP remains adamant that it is not merely a redundant middleman. According to Joly, the organization’s value proposition has shifted from "data collection" to "data utility."
"CDP is ensuring the data is not simply reported, but being used by a multitude of actors spanning businesses, financial markets, investors, and policy makers," Joly explained. While regulatory filings are often buried in dense, disparate corporate websites, CDP provides a centralized, comparative database.
Financial accounting experts, such as Maximilian Müller of the University of Cologne, argue that while startups are using AI to scrape regulatory reports, the quality is often poor. "CDP’s data, which comes directly from its questionnaires, remains superior for now," Müller notes. Because the data is structured, it allows for sector-wide benchmarking that currently cannot be replicated by the fragmented, document-based disclosure systems of individual governments.
Furthermore, as a nonprofit with a mission to enable "Earth-positive decisions," CDP can look beyond the narrow scope of financial materiality that limits most government regulations. While the EU’s Corporate Sustainability Reporting Directive (CSRD) is comprehensive, many other national mandates focus purely on climate risk, ignoring broader impacts on biodiversity and natural resources. CDP remains a sanctuary for companies that wish to report on the "triple bottom line" in a way that goes beyond the letter of the law.
Implications: A Necessary Evolution
The decline in reporting numbers for 2025 is a signal that the status quo is unsustainable. For CDP to remain relevant, it must navigate a difficult transition. It can no longer be the only game in town for carbon accounting, but it can evolve into the premier validator of impact.
The implications for the corporate world are significant. If companies stop reporting to CDP, we risk losing a unified, global dataset that has been decades in the making. If, however, CDP can successfully integrate with mandatory reporting regimes—perhaps by acting as a secondary verification layer or a specialized hub for nature-related data—it may find a new lease on life.
As Owen Hewlett suggests, "There is room for an organization to bring together a more holistic reporting across climate and nature and in a more efficient way."
The "breakup" may not be an ending, but rather an evolution. The relationship between the private sector and the organizations that monitor them is inherently tense. It is a dynamic of facilitator, motivator, and occasional castigator. As long as there is a shared, urgent desire to mitigate the climate crisis, the common ground—however cracked—remains. But for CDP, the era of being the default choice is over; the era of proving its value in a regulated world has just begun. Whether it can satisfy both the companies burdened by its fees and the investors demanding its insights will determine if this 25-year-old institution survives to see its 50th.
Rifan Muazin
Siti Muinah
