UN World Investment Report 2010 - Office of Trade Negotiations

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emissions of the value chain are included,
and how the emissions are calculated. Often
missing, this information is crucial to
providing investors, other stakeholders and
particularly policy makers with a complete
understanding of the nature of a company’s
emissions, and the potential impact of GHG
reduction mechanisms on a company’s
operations.
Another weakness in current reporting
practices is the lack of country specific information
on GHG emissions, for example a
breakdown of a TNC’s global emissions by
country of origin. Of the 87 TNCs reporting
GHG emissions noted above, only 21 were
found to report country specific information.
Given the increasing number of national
initiatives to curb GHG emissions, country
specific data is necessary to provide policy
makers and investors with information to
gauge the impact of current or proposed
policy on industry in specific jurisdictions.
Such data will also, over time, provide
crucial information to policy makers on the
effectiveness of specific policies, and thus
inform future policy decisions. The data are
equally useful for management in evaluating
investments in GHG reducing technology,
and other stakeholders in monitoring trends
in the GHG emissions throughout a TNCs
global network.
Figure IV.6. Use of GHG Protocol
“scopes” in emissions reporting
(Number of TNCs)
Scope 1and 2only
(34)
Scope 1only or
indistinct data
(41)
Source: UNCTAD, 2009e.
World Investment Report 2010: Investing in a Low-Carbon Economy
Scope 1, 2and 3
(12)
No GHG
information
(13)
Hence, while the world’s largest TNCs have
already begun to adopt a range of voluntary
practices to address issues of climate change
and make related information available in
their public reports, problems with the quality
and consistency of reporting remain. In
the absence of standardized and mandated
reporting frameworks for GHG emissions,
inconsistencies are likely to continue, resulting
in significant obstacles for meaningful
monitoring.
The disclosure of GHG emissions would
benefit from an internationally harmonized
approach to the way companies explain,
calculate and define emissions. In the same
way national tax policies benefit enormously
from having a regulated accounting standard
to determine income, national low-carbon
strategies would benefit enormously from
a mandated standard for calculating and
reporting GHG emissions. Furthermore, internationally
harmonized reporting would be
extremely useful for further climate change
policy work at the global level, as well as
providing investors and other stakeholders a
clear, comparable view of emissions around
the world.
As a start, policy makers could encourage
wider adoption of one of the existing generally
accepted frameworks for emissions
reporting in order to improve the transparency
of calculations and the comparability
between companies. Ultimately such frameworks
will need to move from the testing
grounds of voluntary initiatives into the
world of regulatory initiatives: one policy
option for this is to specify an existing GHG
reporting framework and make reporting on
it a listing requirement for companies listed
on stock exchanges (e.g. South Africa has
done something similar when requiring all
listed companies to report using the sustainability
guidelines of the Global Reporting
Initiative).
For international harmonization purposes, the
United Nations Intergovernmental Working