CDP-FTSE-350-Climate-Change-Report-2012

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18 Standards and Consistency The years since CDP started asking organisations for climate change-related information have seen significant developments in awareness of resource constraints, market inefficiencies and global risks and the private sector has been identified as needing to play a crucial role in addressing these issues. This has had consequential effects on reporting requirements. New legislation, standards and codes encourage or require companies to report on an increasingly wide range of factors designed to inform governments, investors, consumers and society about all aspects of their performance so that more effective decisions can be made by stakeholders about how to allocate and protect resources. The future of reporting is likely to focus on refining the substance and format of these new requirements both to recognise the changing nature of business, (in particular its reliance on intangible rather than physical assets to create value) and to meet the needs of stakeholders seeking to secure sustainable economic growth. The widespread adoption of International Financial Reporting Standards gives a universal language for the disclosure of financial results, now we need equivalent internationally recognised standards on the measurement and assessment of the non-financial resources and relationships on which companies depend for their success together with mechanisms for disclosure of that information through mainstream reporting channels. Lois Guthrie, Executive Director, CDSB Much progress towards this has already been made by CDP through the significant non-financial reporting capacity it has built and its ever-pioneering advances such as the development of an XBRL taxonomy for climate disclosure. Complementing the work of the International Integrated Reporting Council (IIRC), CDP’s special project, the Climate Disclosure Standards Board (CDSB) focuses on mainstream reporting of climate change-related information in annual filings to investors. The requirements and principles of CDSB’s Climate Change Reporting Framework are designed to support assurance activities and are extensible to reporting on other forms of natural capital. Work on reporting by governments and other organisations has been likened to notes on a musical score that are currently being played in isolation. The future will hopefully see more orchestration of efforts on reporting as envisaged by the inter-agency work on consistency by CDSB, GRI, the OECD and UNCTAD. Corporate reporting should reflect our need to work in harmony with each other and with our planet.
Taking the next step in reporting Over the last few years, we have seen sustainability and climate change move more towards the mainstream of business thinking and reporting. This has been driven by a number of factors: companies seeing the potential business benefits (for example GE generated US$21bn in revenues in 2011 from a US$2.3 billion R&D investment in their eco-imagination division); the realisation that growth cannot be sustained with declining natural capital; and a need for companies to meet changing customer needs. What is clear is that businesses are seeing sustainability and climate change as a new way in which to change their business model, strategy and generate and sustain multiple competitive advantages into the future. However, capitalising on this opportunity is not straightforward. This is where reporting has a part to play. Reporting is all about telling it how it is: in a way that is balanced, unbiased, clear about the relevance to the business and some external context. However, it also needs to be concise, to the point, and memorable. And when it comes to corporate reporting, comparability should be added to this list of attributes. With all of these attributes it is challenging but necessary to demonstrate how a business is seizing the opportunities and addressing the risks from climate change. The UK’s recent announcement of mandatory greenhouse gas emissions reporting for companies listed on the London Stock Exchange provides the necessity for many companies to report. The challenge will be telling a compelling picture to go along side the basic information that needs to be disclosed. Alan McGill, Partner, PwC The underlying principles of integrated reporting are a good place to start when looking at the next steps in reporting: • Discuss the external market drivers: capture economic, competitive, regulatory, geopolitical, environmental, social and technological drivers and be future orientated about how these are shaping the market in which you operate. • Be transparent around your strategy: show how this responds to the market drivers, is aligned to remuneration policies and the identified risks, and inform the reader about the extent of this across the value chain in which you operate. • Explain how the business model enables you to differentiate: include the relative importance of resources (financial, human and natural capital) and relationships (customers, suppliers, employees, etc.). • Disclose your performance: give a balanced assessment of performance on progress against strategy, including Key Performance Indicators and targets, to provide insight into how the business is dealing with the market drivers. • Think of the future: the future orientation of the business and how it is going to continue into the future will be important to the reader. Giving a balanced picture is not as easy as it sounds. Climate change is a complex issue fraught with uncertainty. Admitting that you do not have all the answers and don’t have certainty about how it will impact the business is never easy. But biased reporting has less credibility and risks being branded as ‘greenwash’. Those who have the courage to deal with uncertainty are those who will capitalise on the opportunities. 19
Page 1 and 2: The Future of Reporting CDP FTSE 35
Page 3 and 4: CEO Foreword The pressure is growin
Page 5 and 6: Being able to tell a positive story
Page 7 and 8: CDP Signatory Investors 2012 655 fi
Page 9 and 10: Resolution Resona Bank, Limited Rey
Page 11 and 12: Key Themes and Highlights of 2012 R
Page 13 and 14: Climate change reporting: drivers a
Page 15 and 16: in consumer behaviour, or both. The
Page 17: The Future of Reporting The culmina
Page 22 and 23: 22 2012 Leaders Introduction to the
Page 24 and 25: 24 • 80% of the CDLI companies al
Page 26 and 27: 26 CPLI T3 THE CDP FTSE 350 CPLI 20
Page 28 and 29: 28 Company name Country Associated
Page 30 and 31: 30 Company name Country CAPE United
Page 32 and 33: 32 Company name Country Electrocomp
Page 34 and 35: 34 Company name Country Homeserve U
Page 36 and 37: 36 Company name Country Legal & Gen
Page 38 and 39: 38 Company name Country Phoenix Gro
Page 40 and 41: 40 Company name Country Shire Irela
Page 42 and 43: 42 Company name Country Witan Inves
Page 44 and 45: 44 Company name Country Unite Group
Page 46 and 47: 46 Appendix II Using CCRF for your
Page 48: 48 CDP Contacts Paul Dickinson Exec

CDP-FTSE-350-Climate-Change-Report-2012

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