Climate Action 2011-2012

saving money; influence the decisions of consumers and
investors; and, most importantly, they can limit their
impacts on the environment.
GRI’s Performance Indicators offer guidance on issues related
to climate change, including energy and water consumption
and efficiency, biodiversity impacts, greenhouse gas and other
significant air emissions, and the financial implications, risks,
and opportunities presented by climate change.
But climate change reporting is not just a technical
exercise: As mentioned, it needs to be seen in the context
of sustainable development. By requiring disclosures to be
presented in a more comprehensive sustainability context,
GRI’s Framework is uniquely positioned to ensure that
reporting related to climate change is linked to other critical
sustainability issues such as biodiversity, human rights and
population displacement. Climate change and social issues –
perhaps the two most pressing topics in sustainability – are
interrelated. Consequently, they need to be measured and
analysed in an interrelated fashion.
plAnning SuStAinAbility
infoRmAtion
Now for the ‘How’ to report. An organisation has recognised
the benefits of reporting and made the decision to improve
its transparency. Before deciding what to do next, it needs
to work out who wants – who needs – information on its
sustainability performance. The emerging players in the
sustainability data field share something in common: the
ownership of large portfolios of companies. These banks,
insurers, investors, stock exchanges and countries not only
have a stake in companies, but also in the environment –
for a business to operate well in the long term, it must be
aware of, and communicating, its sustainability impacts.
In future we can expect to use
very different means to feed,
house, and transport ourselves,
and to communicate.
These ‘portfolio’ players – relatively new audiences for
sustainability reporting – are looking for transparency and
comparability. They need to look at one company against
another, to assess the integration of sustainability into
corporate strategy more centrally, to gauge their energy
efficiency performance, or evaluate the quality of their supply
chain management. They are starting to ask for comparable
sustainability performance data, through lending and
insurance requirements, listing requirements and regulation.
130 climateactionprogramme.org
pRomoting diScloSuRe
Two of the most encouraging examples of disclosure promotion,
Denmark and the Johannesburg Stock Exchange, have one thing
in common: a simple approach to regulation. They both require
companies under their jurisdiction to disclose information
related to sustainability performance, or explain their silence.
More than 450 companies listed on the Johannesburg Stock
Exchange are required to apply the King Code of Governance,
which recommends producing an integrated report in place
of annual financial and sustainability reports, or explain why
not. The listing requirement has gained widespread support,
and there has been a ripple effect to other major exchanges
worldwide – the New York Stock Exchange, Singapore Stock
Exchange, Deutsche Boerse in Germany, BM&FBOVESPA
in Brazil and the Stock Exchange of Thailand are all taking
sustainability into account. While few exchanges have listing
rules in place beyond governance, indexes and guidance for
sustainability information are gaining momentum as stock
exchanges examine new business opportunities and the
potential for increasing revenues, safeguarding reputation and
minimising operational risk.
In Denmark, large businesses must disclose their sustainability
policies, including how these policies are translated into actions,
what the business has achieved as a result and their expectations
for the future, or explain why not. According to the Danish
government, the legal requirement to report is creating growth,
strengthening international reputation and competitiveness,
and motivating more businesses to report their sustainability
performance data.
compARAbility
Benchmarking is powerful, both for those with a stake in
companies and for the companies themselves. It is a chicken
and egg situation – benchmarking both relies on and results
in comparability. As companies report, they benchmark;
as they benchmark, they develop best practice by sharing
knowledge. It is in these areas that reporting has much to
contribute, and new tools are emerging that are driving
this contribution.
Like many data providers, ratings agencies and analysts,
Bloomberg has started compiling sustainability data and
making it available on some 350,000 terminals worldwide.
This is giving investors instant access to a set of information
– some of it based on GRI’s Indicators – and helping
them make informed decisions. The data is there, and it is
up to the audience to use it in the right way. Look at the
signatories of the Carbon Disclosure Project (CDP) and the
UN Principles for Responsible Investment. The number of
companies disclosing energy and carbon emissions using the
CDP Questionnaire has increased tenfold since 2003. Entire
sectors are being compared and contrasted on qualitative and
quantitative indicators.
But growth in reporting has so far been linear. The world
needs this growth to be exponential. Growth will be boosted
by firmer guidance for disclosure, which is now being
promoted from diverse sources, including governments and
stock exchanges.
Regulation can result in more reports and better reporting
– this is GRI’s goal, and the premise behind the call for
‘report or explain’ regulation. This is simple regulation,