C3 Business strategy

Module Overview

CDP data users are interested in organizations’ forward-looking strategies and financial decisions that are driven by climate-related future market opportunities, public policy objectives, and corporate responsibilities. This module allows organizations to disclose whether they have acted upon integrating climate-related issues into their business strategy. The module includes questions on scenario analysis and transition planning which are important evolutions in strategic environmental planning.

Given the importance of forward-looking assessments of climate-related risks and opportunities, scenario analysis is an important and useful tool for an organization to use, both for understanding strategic implications of climate-related risks and opportunities, and for informing stakeholders of how the organization is positioning itself in recognition of these issues. It also can aid investors, lenders, and insurance underwriters in informing their own financial decision making.

Transition planning is also an important evolution of strategic environmental planning, and includes all the relevant changes that need to be made to the company’s business model before the company can adjust to a net-zero future. This is especially relevant for companies operating in high impact sectors.

Climate-related scenario analysis and transition planning disclosure was piloted by CDP in the Assessing Low-Carbon Transition (ACT) initiative in 2016. Further information on conducting and disclosing scenario analysis can be found in the CDP Technical Note on Scenario Analysis. Further information on transition planning can be found in the CDP Climate Transition Plan technical note.

Responses given in this module should be relevant to the reporting period, even if revisions have been made to your strategy between the reporting period and the time of submission of your CDP response. Where this is the case, you can include more up to date information in C-FI field at the end of the questionnaire. This will not be scored but will be available to the investors and customers (in the case of those responding on behalf of Supply Chain Members) that view your response.

Note for financial services sector companies:

• Financial services sector companies are asked to consider how climate-related risks and opportunities will affect business strategy in relation to their lending, financial intermediary, investment and/or insurance underwriting activities, in addition to operational activities.

Key changes

• Removed questions:
  
  • C3.4a (2021) on the influence of climate-related risks and opportunities on strategy and financial planning.
  • [Financial services only] C-FS3.7b (2021) on climate-related issues not being factored into external asset manager selection process.
• Five new questions:
  
  • C3.2b requests details of the results of scenario analyses with respect to the focal questions and/or decisions addressed.
  • C3.5 and C3.5a request details of spending/revenue that is aligned with a 1.5 degree world.
  • [Financial services only] C-FS3.8 and C-FS3.8a request information on your organization's use of covenants in financing agreements.
• Modified questions:
  
  • C3.1a, C3.1b, and C3.5 (2021) have been merged into question C3.1 on transition plans.
  • C3.2 requests details of why your organization does not use scenario analysis (if applicable).
  • C3.2a requests more granular details on each scenario used in scenario analysis.
  • [Financial services only] C-FS3.6 requests whether your policy framework includes climate-related requirements.
  • [Financial services only] C-FS3.6a requests more granular detail on the policies which integrate climate-related issues.
  • [Financial services only] C-FS3.6b requests more granular detail on your organizations exclusion policies.
  • [Financial services only] C-FS3.7 requests further details on why your organization does not include climate-related requirements in your selection process and engagement with external asset managers if it does not.
  • [Financial services only] C-FS3.7a requests more granular detail on the climate-related requirements included in your selection process and engagement with external asset managers.

Click here for a list of all changes made this year.

Sector-specific content

Additional questions for FS sector companies.

Pathway diagram - questions

This diagram shows the general questions contained in module C3. To access question-level guidance, use the menu on the left to navigate to the question.