As expectations around sustainability disclosure continue to rise, more small and medium-sized enterprises (SMEs) are being asked to share information about their environmental impact. Requests are coming from customers, investors, and supply chain partners, many of whom are under pressure to improve their own transparency.
One of the most recognised frameworks in this space is the Carbon Disclosure Project (CDP). For many SMEs, however, the key question remains whether CDP reporting is genuinely worth the investment. This article explains what CDP reporting involves, when it makes sense for SMEs to engage with it, and how to prepare without placing unnecessary strain on internal resources.
What is CDP reporting?
CDP, formerly known as the Carbon Disclosure Project, is a global non-profit organisation that operates one of the world’s largest environmental disclosure systems. Through CDP, businesses report data on climate change, water security, and deforestation. This information allows investors, customers, and procurement teams to assess environmental performance and risk.
While CDP reporting has traditionally been associated with large organisations, SMEs are increasingly being drawn into the process through supply chain requirements and rising stakeholder expectations.
Why are SMEs being asked to report through CDP?
Many large organisations now expect their suppliers to provide emissions and sustainability data as part of procurement processes. This trend is being driven by net zero commitments across global supply chains, increased investor scrutiny of ESG performance, regulatory developments in climate disclosure, and growing customer demand for sustainable sourcing.
As a result, SMEs may receive requests to complete CDP questionnaires or to provide emissions data aligned with CDP standards. For businesses that are still early in their sustainability journey, these requests can feel complex and resource-intensive.
When CDP reporting is worth the investment
CDP reporting is not essential for every SME at the same stage, but there are clear situations where it can deliver meaningful value.
For companies operating within large supply chains, CDP reporting can strengthen relationships with key customers. Organisations that can demonstrate credible carbon data and progress on sustainability are increasingly favoured in procurement decisions. In this context, disclosure is not just about compliance but about maintaining competitiveness.
For SMEs preparing for growth or investment, sustainability reporting plays a different but equally important role. Investors and financial institutions are placing greater emphasis on ESG performance, and CDP reporting can help demonstrate transparency, governance, and long-term resilience. For businesses exploring funding, acquisition, or expansion into new markets, this level of disclosure can provide a clear advantage.
CDP can also support the development of a more structured ESG strategy. The reporting process encourages businesses to assess emissions, identify climate-related risks and opportunities, review governance structures, set reduction targets, and formalise environmental policies. This often helps SMEs move from ad hoc sustainability efforts to a more strategic and measurable approach.
In some cases, the trigger is more immediate. If customers are already requesting carbon data, even informally, this is a strong signal that expectations are increasing. Taking a proactive approach at this point can reduce future pressure and help establish reliable reporting processes early.
When CDP may not be the right fit yet
There are also situations where jumping straight into full CDP disclosure may not deliver immediate value. For SMEs at an earlier stage, it is often more effective to focus first on foundational work.
This may include calculating a carbon footprint, establishing baseline emissions data, developing a net zero roadmap, improving internal ESG governance, and building confidence with simpler reporting frameworks. A phased approach allows businesses to build capability over time while ensuring that any reporting undertaken is meaningful and accurate.
Common challenges for SMEs
SMEs often face similar barriers when considering CDP reporting. These can include limited in-house sustainability expertise, difficulty gathering accurate emissions data, uncertainty around reporting requirements, and concerns about time and resource commitment. Many organisations also lack dedicated ESG personnel, which can make the process feel more complex than it needs to be.
Recognising these challenges is an important first step, as it highlights where external support can add real value.
How Positive Planet supports SMEs with CDP reporting
At Positive Planet, we work with SMEs to simplify sustainability reporting and develop practical ESG strategies that support business growth.
We help organisations assess whether CDP reporting is appropriate, calculate and verify emissions data, build structured reporting frameworks, respond to customer disclosure requests, and develop long-term sustainability strategies. Our approach is designed to be practical, proportionate, and commercially relevant, ensuring that sustainability becomes a driver of value rather than a compliance exercise.
Join our webinar:
Demystifying CDP Reporting: A Practical Guide for SMEs
We are hosting a webinar on the 3rd June that will explore what CDP reporting involves, which SMEs should prioritise it, the most common challenges, and how to prepare for customer disclosure requests. The session will also cover practical steps for getting started.
“Positive Planet took what felt like a daunting task and made it clear, manageable, and genuinely impactful. Thanks to their expert guidance, we’ve not only measured our carbon footprint accurately with expert verification but have a concrete and workable plan to reduce it. Achieving a CDP ‘B’ score (the highest score for SMEs) is a big milestone for us, and we’re excited to keep moving towards Net Zero with their valuable support.”
Nick Loe, Director, Rocking Horse Pictures
Final thoughts
CDP reporting is becoming increasingly relevant for SMEs, particularly those operating within larger supply chains or preparing for future growth. However, it is not a one-size-fits-all requirement, and timing matters.
The most effective approach is to understand your current position, consider stakeholder expectations, and align sustainability reporting with wider commercial goals. With the right support and a clear roadmap, SMEs can turn ESG disclosure into a competitive advantage rather than a burden.