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2012

A4S publishes research report on sustainability

17 Dec 2012

The Prince of Wales’ Accounting for Sustainability Project (A4S) has published the outcomes of research into which types of information may be most effective in driving the integration of environmental and social factors into board level decision making.

The report, entitled Future Proofed Decision Making: Integrating environmental and social factors into strategy, finance and operations, reveals that senior decision makers within business and public sector remain unconvinced about the relevance of environmental and social issues to day-to-day decision making.

The research was conducted over the span of eight months (ending in May 2012), and consisted of a series of qualitative interviews and discussions with 58 senior managers (e.g. board members, CEOs, CFOs) of large companies and public sector organisations.

Themes emerging from the research included:

  • a lack of understanding of the implications of environmental and social factors to strategy, finances and operations
  • lack of visibility of environmental and social related issues at the board level
  • the need for robust information, including rigorous valuations of environmental and social factors in financial terms using trusted methodologies
  • few organisations being convinced of the commercial necessity of responding to significant environmental and social issues.

In response to the report, A4S is working on a number of initiatives to help create a sustainable economy and to help organisations embed sustainability into their decision making.

The report outlines action points for organisations including:

  • Demonstrating the business case - Show the commercial rationale for incorporating social and environmental factors into decision making to help ensure that organisations are aware of the risks to mitigate and the opportunities to grasp over the short, medium and long term
  • Develop more robust information - Develop concise, recognisable measures and methodologies for environmental and social factors (with demonstrated links to the organisation's finances)
  • Bridge the knowledge gap - Recognise and address the need for skills expansion at board level and within the finance and accounting community for a sustainable economy.

Click for (links to A4S website):

Another exchange joins SSE initiative

06 Dec 2012

MCX Stock Exchange (MCX-SX), based in Mumbai India, has signed the voluntary commitment to the United Nation’s Sustainable Stock Exchanges (SSE) initiative to promote long-term sustainable investment and improved environmental, social and corporate governance disclosure and performance among companies listed on its exchange.

MCX-SX follows BSE Ltd (also based in India) which recently announced support for the initiative, and together they join five other stock exchanges which publicly announced their commitment towards improving sustainability at the Rio+20 Summit earlier in 2012.

Click for press release (link to MCX-SX website).

New XBRL taxonomy for climate change reporting released

14 Nov 2012

The Carbon Disclosure Project (CDP) and the Climate Disclosure Standards Board (CDSB) have released an XBRL (eXtensible Business Reporting Language) climate change reporting taxonomy. The new taxonomy is designed to make climate change reporting easier and more streamlined and aims to facilitate the future integration of climate change data into mainstream financial reports.

The release of the final taxonomy follows the release of a draft taxonomy earlier in the year, the comment period of which closed in September 2012.

The CDP and CDSB envisage the taxonomy will be used by companies for reporting, and considered by governments for the electronic filing of climate change information.  Consistent with the implementation of XBRL in financial reporting and other areas, data made available is more easily collated, compared and analysed by users.

Click for press release (link to CDP website).

CDP report highlights importance of water-related issues, calls for greater transparency

24 Oct 2012

The Carbon Disclosure Project (CDP) has released the 2012 edition of its CDP Global Water Report, which summarises the results of a survey on water-related issues of the largest companies by market capitalisation included in the FTSE Global Equity Index Series (the Global 500). The survey revealed a sharp rise in company reports of detrimental impacts from drought and other water-related issues, but a need for greater transparency in water-related risk assessments provided to investors.

318 Global 500 companies were invited to respond to a CDP Water Disclosure information request because they operate in sectors which are water-intensive or exposed to water-related risk. 191 of the 318 companies responded and the analysis in the report, prepared by Deloitte on behalf of the CDP, is based on the 185 responses submitted by early August.

The 2012 report reveals that over half of companies (53% up from 38% in 2011) have experienced negative impacts from water-related challenges including water scarcity, flooding, rising compliance costs, regulatory uncertainty and poor water quality in the past five years.

Although there is an increased awareness of water-related risks and issues amongst respondents, the report notes that progress in responding to them is varied and in many cases considered insufficient.  The report sees a need for greater corporate accountability through more transparency, concrete targets and goals and board level oversight of water-related issues.

CDP’s goal is to enable better decision making by providing investors, companies and governments with high quality information on how companies are managing their response to natural resource constraints.  Water issues are a key component of sustainability reporting for water-exposed companies.

The report notes:

Accounting for and valuing the world’s natural capital is fundamental to building economic stability and prosperity and the global economy will favor businesses that take a pro-active approach to water stewardship. Companies that transform their business and work to safeguard valuable water resources have the potential for both short and long-term cost savings, sustainable revenue generation and a more resilient future.

Click for (links to CDP website):

GRI to update sector guidance

12 Oct 2012

The Global Reporting Initiative (GRI) has announced a new research project into sector-specific topics, with the objective of making technical improvements to the sector supplements to its sustainability reporting framework.

As an initial milestone in the process, GRI is aiming to publish a list of internationally recognised material topics by business/industry activity group in May 2013. This list is intended to be used as a reference in the sustainability reporting field. In order to prepare this list, GRI is inviting all interested parties to provide the most relevant sustainability topics that have been identified for their sector or industry.

The concept of 'materiality' in sustainability reporting is an increasingly important issue as more organisations seek to adopt and apply sustainability reporting practices.

The GRI has also announced the five newest Supplements that is has developed must be used by organisations in those sectors if they want to declare an 'Application Level A' - these are Airport Operators, Construction and Real Estate, Oil and Gas, Media, and Event Organisers.  Application Levels indicate the extent to which the G3 or G3.1 Guidelines have been applied in sustainability reporting (the Application Levels are proposed to be discontinued as part of the forthcoming 'G4' Guidelines).

 

Click for more information (link to GRI website).

Proposed XBRL 'Climate Change Reporting Taxonomy' published

07 Sep 2012

The Carbon Disclosure Project (CDP) and the Climate Disclosure Standards Board (CDSB) are calling for comments on a proposed XBRL climate change reporting taxonomy.

The CDP is an independent, not-for-profit organisation which has established a database of corporate climate change information.  Over 3,000 organisations in more than 60 countries around the world measure and disclose their greenhouse gas emissions and climate change strategies through CDP in order to set reduction targets and make performance improvements.

The Climate Disclosure Standards Board (CDSB) is an international organisation which seeks to achieve the integration of climate change-related information into mainstream corporate reporting.

The goal of climate change reporting taxonomy  is to reflect information requirements for voluntary or mandatory filings submitted by listed or non-listed companies to different authorities around the world, initially focused on company disclosure with requirements stemming from the climate change reporting framework and CDP.

The overall intent is to have an overarching taxonomy that is able to accommodate the main reporting schemes and arrive at a common representation of the main aspects so as to allow different systems to process and communicate climate change data effectively and efficiently.

The CDP indicates that the development of the taxonomy has been prioritised in response to increasing interest in sustainability reporting, such as the outcomes from the Rio+20 conference and the recent announcement by the UK government to introduce mandatory carbon reporting from 2013.  The Global Reporting Initiative (GRI) has also released an XBRL taxonomy for tagging sustainability data in reports.

Consultation on the draft taxonomy continues until 24 September 2012.  Click for press release (link to CDP website).

IIRC releases draft framework outline

13 Jul 2012

The International Integrated Reporting Council (IIRC) has released a draft outline of its forthcoming Integrated Reporting Framework. The outline establishes for the first time the basic structure of the Framework and is intended to keep stakeholders informed as the Framework is developed.

As an initial draft and an outline, the document is high-level and discusses what the draft Framework is likely to contain when it is released later in 2012, rather than providing in-depth requirements or detailed content.  The IIRC also points out it is subject to change as the consultation and drafting process continues.

The IIRC has indicated that although the draft outline is not a formal part of the due process for developing the Framework, stakeholder feedback would nonetheless be appreciated.

Click for IIRC announcement (link to IIRC website).

Principles for Responsible Investment Initiative publishes updated reporting framework

15 May 2012

The United Nations-backed Principles for Responsible Investment Initiative (PRI) has published a new Reporting Framework for signatories.

The PRI is an investor initiative in partnership with UNEP Finance Initiative and the UN Global Compact, whereby international investors become signatories and work together to put the following six 'Principles for Responsible Investment' into practice:

  1. We will incorporate environmental, social and corporate governance (ESG) issues into investment analysis and decision-making processes
  2. We will be active owners and incorporate ESG issues into our ownership policies and practices
  3. We will seek appropriate disclosure on ESG issues by the entities in which we invest
  4. We will promote acceptance and implementation of the Principles within the investment industry
  5. We will work together to enhance our effectiveness in implementing the Principles
  6. We will each report on our activities and progress towards implementing the Principles.

The new Reporting Framework (to meet the sixth point above, and replacing the existing framework) has been designed through an extensive consultation process to achieve three main sets of objectives for signatories:

  • Accountability of the PRI: to ensure transparency and accountability of the PRI initiative and its signatories
  • Signatory transparency: to encourage signatory transparency on responsible investment activities
  • Signatory assessment: to provide tools to allow signatories to measure their performance with objective indicators.

The new Reporting Framework is being introduced in 2012 as a voluntary pilot, before being made mandatory.

More information is available on the PRI website.

GRI update — May 2012

11 May 2012

The Global Reporting Initiative has released updates on various sustainability reporting matters, including the forthcoming G4 guidelines, a new sector supplement and the impact of regulation on sustainability reporting.

The updates include:

  • 'G4' guidelines - the GRI has analysed 17 possible topics which may be incorporated into the next edition of its guidelines.  The GRI concluded 8 topics are either sector-specific, or will be covered by current G4 related work, working groups formed for four topics (anti-corruption, biodiversity, occupational health and safety and greenhouse gas (GHG) emissions), and investigation continued on five other topics (life cycle analysis (LCA), chemicals of concern, water, disabled persons’ rights and children’s rights). The GRI is also considering the impact of the G4 guidelines on sector supplements
  • Media sector guidance - A media sector supplement to the G3 guidelines has been published
  • Impact of regulation on sustainability reporting - measures taken by stock exchanges, governments and other regulators are having a positive effect on sustainability reporting worldwide, according to an analysis of the GRI's database of sustainability reports.

All the latest updates from GRI can be found on the GRI website.

'Caring for Climate' recommends Carbon Disclosure Project for signatory reporting obligations

08 May 2012

Caring for Climate, a joint initiative between the United Nations Global Compact and the United Nations Environment Programme, has recommended the Carbon Disclosure Project (CDP) as a reporting framework for its signatory companies in reporting guidance.

Caring for Climate signatories commit to communicate on an annual basis on progress made in implementing the five areas of commitments as outlined in the Caring for Climate Statement.  There are currently nearly 400 companies across 65 countries that have endorsed Caring for Climate.

The Caring for Climate reporting guidance outlines disclosure-related responsibilities for signatory companies, including the use of existing reporting frameworks to meet the annual reporting requirements of the initiative.

The following is the text of the measurement element of the Caring for Climate Communication on Progress (COP-Climate) report with which signatories must comply:

Measurement of outcomes using, as much as possible, broadly accepted climate-related indicators or metrics, for example those in the Carbon Disclosure Project (CDP) and GRI G3.1 Guidelines. It is encouraged that at minimum, the COPs-Climate contain a definition of performance indicators and basic measurements (qualitative and/or quantitative) of outcomes.

Caring for Climate recommends utilising the Carbon Disclosure Project (CDP) reporting process to develop the COP-Climate, as in its opinion, the CDP currently stands as a more rigorous tool in reporting GHG emissions and climate change strategies on an annual basis. However, the guidance acknowledges that the Global Reporting Initiative (GRI) and the Global Compact Advanced Communication on Progress (COP) can also be used to fulfill the COP-Climate requirements.

More information is available on the UN Global Compact website.

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