Carbon Disclosure Rating

DEFINITION of 'Carbon Disclosure Rating'

A numerical score that indicates the level of reporting of a company's climate change initiatives. The carbon disclosure rating for a company is based on its response to the Climate Disclosure Project's (CDP) climate change questionnaire. A high carbon disclosure rating would indicate a comprehensive response to the questionnaire, as well as sound understanding and management of climate change-related issues - including greenhouse gas emissions - relevant to the company.

BREAKING DOWN 'Carbon Disclosure Rating'

The carbon disclosure ratings are based on a methodology developed by the U.K.-based CDP, in consultation with its global advisor, PricewaterhouseCoopers. Note that the carbon disclosure score is not a reflection of the actions taken by the company to mitigate its impact on climate change and offset its carbon footprint, but is simply indicative of its level of disclosure with regard to these issues. Most of the world's largest companies have a carbon disclosure rating.

RELATED TERMS
  1. Carbon Dioxide Tax

    A tax on businesses and industries that produce carbon dioxide ...
  2. Carbon Trade

    An exchange of credits between nations designed to reduce emissions ...
  3. Carbon Credit

    A permit that allows the holder to emit one ton of carbon dioxide. ...
  4. Climate Finance

    Climate finance is a finance channel by which developed economies ...
  5. Emissions Reduction Purchase Agreement ...

    A transaction that transfers carbon credits between two parties ...
  6. Kyoto Protocol

    An international agreement that aims to reduce carbon dioxide ...
Related Articles
  1. Markets

    The Largest Oil Companies Make a Pledge to Climate Change

    Here is how ten of the world's largest oil companies prepared for the UN climate change summit happening in Paris this month.
  2. Trading

    What Would Full Disclosure Mean For The Market?

    In the wake accounting scandals, more people are calling for full disclosure. But what would that even help?
  3. Markets

    How Investors are Thinking about Climate Risk

    Learn about the four macroeconomic trends focusing on climate risk and sustainability discussed in the most recent Paris summit.
  4. Investing

    Want To Know What Disclosures Mean ... In Plain English?

    Disclosures are the fine print in financial reports. We strip away the legal speak to tell you what they really mean.
  5. Markets

    The Basics of FuelCell's Cost Share Carbon Reduction Project (FCEL)

    Discover how FuelCell Energy's carbon capture project with the Department of Energy works and how it could lead to cleaner air and huge profits.
  6. Insights

    U.S. and India Intend to Ratify Climate Accord

    A meeting between US President Barack Obama and Indian Prime Minister Narendra Modi concludes with both leaders committed to ratifying Paris climate deal.
  7. Managing Wealth

    Asset Manager Ethics: Disclosures

    Effective communication and disclosures go a long way towards easing minds and creating a lasting and trusting symbiotic relationship. Here are the four steps to making good disclosures.
  8. Insights

    NB SRI Team In Support of Limiting Methane Emissions

    On March 10, 2016, the US and Canada announced that the two countries would aim to cut methane (CH4) emissions in the oil and gas sector by 40-45% over the next decade.
  9. Markets

    Exxon May Have to Report Climate Change Costs (XOM)

    In a Tuesday letter first reported by Reuters, the SEC has ordered Exxon Mobil Corp. to include a climate change resolution in its annual proxy statement.
  10. Insights

    Exxon, Chevron Butt Heads with Investors over Climate Change

    The shareholder meetings for Exxon Mobil and Chevron were marked by dissent from activist investors calling for greater accountability from the oil companies for their actions on climate change. ...
RELATED FAQS
  1. What is the carbon trade?

    The carbon trade came about in response to the Kyoto Protocol. Signed in Kyoto, Japan, by some 180 countries in December ... Read Answer >>
  2. What are the disclosure requirements for a private placement?

    Learn about the SEC rules for disclosure requirements in private placement offerings, and understand what type of information ... Read Answer >>
  3. What is the difference between a summary prospectus and an offering memorandum?

    Understand what investments require a summary prospectus or a offering memorandum, and learn the differences between the ... Read Answer >>
  4. What’s the difference between a consumer disclosure and a credit report?

    Find out why consumer disclosures and credit reports are considered different documents, even though they contain similar ... Read Answer >>
  5. What are the differences between APR in Europe and the U.S.?

    Learn how the regulatory authorities in the U.S., the European Union and the U.K. treat the calculation and disclosure of ... Read Answer >>
  6. What is meant by "full disclosure"?

    Most likely, the "full disclosure" you're talking about refers to rules put in place by the Securities and Exchange Commission ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center