8 Jul 15

Climate Change Reporting: Why do we bother?

OECDGreenstone’s Head of Client Services, David Wynn, attended the OECD Global Forum on Responsible Business Conduct in Paris. Here he reflects on the key global trends and discussions on climate change reporting from the event.

Hot off the tail of the warmest May since records began, the OECD Global Forum in Paris brought with it more sweltering heat and an opportunity to share thoughts and insights with global leaders working in responsible business conduct. Covering everything from human rights in international sport to China’s approach to human rights, the forum was an opportunity for global professionals to share information and set the stage for a long-term vision for sustainable business.

A panel session on corporate climate change reporting opened Day Two of the event and served as an opportunity to explore the impacts of current reporting schemes in triggering company action to reduce their emissions and address climate change through their supply chains. In a context where governments, investors and increasingly external stakeholder groups are requiring or desiring companies to report on their climate change impacts, what are the key trends seen across the globe in this space?

A tone from the top

A key theme from the panel discussions was tone and the importance of having a ‘tone from the top’. An overarching organisational strategy on climate change is crucial and should feed into how corporate messages around sustainability are communicated. Tone isn’t just about branding and memorable taglines though; it’s about how an organisation is able to communicate their climate change impacts in a balance and audience-focused way. Organisations in the room echoed the concern that companies are comfortable saying how they are doing ‘less bad’ but that the tone of climate change reporting should ensure balance to capture how positive actions have been taken to ultimately create value and contribute to an organisation having a net-positive impact.

“Our emissions have decreased 20%”

Without context “our emissions have decreased 20%” means nothing. What type of emissions? What’s the boundary for measurement? A 20% decrease since when? The questions could go on and on. Panellists at the OECD Forum agreed that clarity on the context, scope and boundary of carbon reporting is fundamental to ensure that figures are understood. Organisational pressure to report reductions and savings means that for many companies, ‘graphs going the right way’ in annual reports is viewed as a success. However, transparency on where things haven’t improved, the reason for that and the plan for the future is just as important. As with frameworks such as GRI G4, reporting who you’ve engaged with and what the truly material impacts are reinforce this theme of providing context to figures that are communicated.

Bye bye carrots. Hello sticks!

Keeping up to speed with movements in global climate change reporting frameworks is easily a full-time job. A plethora of global approaches, such as GRI, CDP and Integrated Reporting, have developed over the past few years alongside both voluntary and mandatory schemes at country and stock exchange level. Under the Grenelle system, the French government have set a framework for reporting that aligns with a national commitment to the environment. Post-COP 15 in Copenhagen, the system has moved from a voluntary approach to a mandated obligation under Grenelle II where organisations are required to report on areas including environment and carbon. The WRI found that over 40 countries already have mandatory emissions reporting programmes in place[1].

WRI_Map

 

So why do we bother with climate change reporting? Well because it's important. Fundamentally corporate climate change reporting should add value to an organisation by clearly communicating to their stakeholders how they are impacting on the environment (both positively and negatively) and how they plan to have a greater positive impact going forward. With a clear corporate tone, context to the environmental information being reported and a commitment to figures with rigour, the exercise of climate change reporting can fulfil these goals.

 

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[1] http://www.wri.org/blog/2015/05/global-look-mandatory-greenhouse-gas-reporting-programs

Non-Financial Reporting , Reporting Guidance

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