For organizations navigating CDP’s 2025 reporting and disclosure cycle, CDP presents both a challenge and a strategic opportunity to prepare for current and future regulatory compliance obligations.
Sustainability and ESG (environmental, social, and governance) reporting and disclosures have evolved rapidly from a voluntary stakeholder-driven practice to a strategic business priority, with shifting risks and potential liabilities. In today’s environment of rising legal complexity, regulatory fragmentation, and reputational scrutiny, voluntary disclosures, particularly those made through frameworks like CDP, present an area of strategic and legal importance for global companies. Because of this, organizations must take extra care to ensure their CDP disclosures align seamlessly with other disclosures required by existing and emerging regulatory frameworks—especially in climate action, emissions, and environmental risk—to avoid greenwashing or litigation risks
What companies need to know about CDP reporting in 2025
CDP, formerly the Carbon Disclosure Project, remains one of the most widely adopted ESG reporting frameworks, focusing on climate change, water security, and nature-related risks. The 2025 CDP Disclosure Cycle offers companies an opportunity to disclose details of their environmental management systems, carbon reduction projects, and environmental stewardship initiatives, resulting in a performance benchmarking score. Through its detailed questionnaires, CDP collects both qualitative and quantitative data on topics ranging from greenhouse gas (GHG) emissions to biodiversity policies.
The response window for CDP’s 2025 Disclosure Cycle opened on June 18, 2025, and organizations have until September 17, 2025, to submit responses eligible for a CDP score. However, companies can continue to submit unscored responses and amendments until November 17, 2025.
While the 2025 CDP questionnaire and scoring methodology are largely consistent with prior years, the broader legal and risk landscape has shifted. Organizations must now navigate how CDP disclosures intersect with new regulatory frameworks, particularly those taking effect in 2026. Areas such as climate action, emissions reporting, and environmental risk management are under increasing scrutiny, both from regulators and investors. Organizations must also ensure that their disclosures are accurate and supported by robust internal systems to avoid the risk of greenwashing allegations or litigation exposure.
Given the tight timelines, organizations may already be preparing their internal processes, data systems, and governance reviews to meet the September 17th scoring deadline—and use the full window from June to November for any necessary refinements or amendments.
Strategic considerations for CDP reporting in 2025
As organizations prepare to submit their CDP reporting, organizations should ensure they have assessed the current landscape, have a thorough understanding of the evolving risks, and are using CDP as a strategic governance tool to avoid potential greenwashing claims, investor or regulatory scrutiny, regulatory enforcement actions, and stakeholder complications. The following considerations can help organizations avoid significant risks and potential liabilities as they are participating in the 2025 Disclosure Cycle.
ALIGN CDP RESPONSES WITH OPERATIONAL REALITY
As regulators and investors scrutinize the accuracy of ESG claims, including those made in voluntary disclosures to frameworks like CDP, companies should ensure that what they disclose reflects actual operations, policies, and practices. This means:
- Integrating legal, risk, and compliance teams into the reporting process.
- Conducting internal audits of environmental data sources.
- Reviewing climate targets, GHG accounting, and biodiversity claims for consistency.
- Ensuring governance structures and accountability frameworks are in place.
Organizations should also ensure their disclosures are focused on substance over optics as misalignment, whether through outdated data, overreaching claims, or inconsistent language, can increase exposure to greenwashing claims, potential regulatory enforcement and liability risks, as well as reputational damage.
USE CDP TO PREPARE FOR FUTURE REGULATORY REPORTING
CDP can serve as a strategic and preparatory bridge between today’s voluntary disclosures and tomorrow’s regulatory reporting. Many of the topics covered in the CDP questionnaire, including GHG emissions, climate risk governance, biodiversity, and supply chain impacts, overlap with emerging mandatory frameworks in the US, EU, and state jurisdictions. For example:
- California’s climate disclosure laws (SB 253 and 261) take effect in 2026 for large entities doing business in the state.
- The EU’s Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CS3D) are being finalized and phased in.
- US SEC climate disclosure rules, although stayed, may still be revived or replaced after ongoing litigation is resolved.
By considering these evolving requirements now and ensuring CDP reporting processes are aligned to future regulatory compliance obligations, organizations can be better prepared for future compliance obligations, avoid costly rework or duplication, and avoid potential legal and regulatory risks.
STRENGTHEN INTERNAL CONTROLS AND GOVERNANCE
As mandatory reporting and disclosure obligations increase, they are also becoming more legally consequential. To manage the evolving legal risks, organizations should:
- Establish cross-functional ESG governance committees.
- Document data sources, assumptions, and methodologies.
- Create internal audit or assurance processes for ESG metrics.
- Align sustainability goals with enterprise risk management (ERM) practices.
Organizations that treat CDP reporting as a compliance-lite or marketing task risk missing the opportunity to build trust with stakeholders and may expose themselves to potentially significant enforcement or litigation risks.
MITIGATE GREENWASHING AND LEGAL RISK
Recent enforcement trends and litigation show that even voluntary ESG disclosures can lead to significant legal and reputational exposure. Attorney general investigations, consumer class actions, and enforcement actions have all been brought against companies whose climate-related statements—such as “net zero” or “carbon neutral” pledges—were not backed by verifiable data or credible plans.
With at least one report showing a 30% rise in US greenwashing litigation in 2024, organizations should use the CDP disclosure cycle to:
- Review all public-facing climate and ESG statements.
- Coordinate disclosures throughout the annual reporting cycle across CDP, websites, investor materials, and sustainability reports.
- Remove or clarify vague, high-risk language that lacks support.
- Be cautious about relying solely on third-party certifications or unverified data.
PLAN BEYOND 2025: USE CDP FOR LONG-TERM ESG STRATEGY
Organizations can use the 2025 Disclosure Cycle for more than voluntary disclosure and set a solid foundation for 2026 and beyond. Forward-looking companies can use CDP to:
- Benchmark progress and identify performance gaps.
- Prepare for mandatory reporting and due diligence obligations in global supply chains.
- Engage with stakeholders on credible, science-based targets and climate transition planning.
- Guide alignment of various disclosures across an organization’s annual reporting cycle.
Treat CDP as a strategic asset, not a compliance burden
For organizations operating across multiple jurisdictions, CDP’s 2025 Disclosure Cycle offers a critical opportunity to get ahead of regulatory change, demonstrate governance maturity, and mitigate risk. A strategic, legally informed approach to CDP reporting empowers companies to meet emerging stakeholder expectations and compliance obligations while also mitigating greenwashing risks and legal exposure. By taking a proactive stance, organizations can better prepare for evolving global disclosure requirements, reducing future compliance burdens and regulatory uncertainty. Ultimately, this approach strengthens transparency and reinforces trust with investors, stakeholders, and the public.
Now is the right time to assess your organization’s readiness—not just to respond to CDP, but to use it as a catalyst for sustainable leadership and transparent disclosure.
Need guidance on how to strategically approach CDP and ESG reporting? Contact your Nixon Peabody attorney or reach out to the authors of this article.