- Business is the ‘elephant in the room’, say global sustainability experts
- Crucially, companies in developing countries are among leaders in climate change reporting
- It is vital to monitor what enterprises are doing to measure and reduce their carbon usage
The business world’s response to climate change is examined in detail in a four-part joint report, published by ACCA (the Association of Chartered Certified Accountants) and GRI (the Global Reporting Initiative), called “High Impact Sectors: the Challenge of Reporting on Climate Change.”
Launched at the COP15 Climate Change Summit, the report provides an insight into the degree to which large companies around the world from the 15 most high-impact industry sectors have begun to disclose their greenhouse gas (GHG) emissions and their strategies for reduction.
The bad news is that less than half of companies, studied at a global level, disclosed specific climate change-related information using GRI indicators in their company’s sustainability reports.
The study shows, however, that an impressive business leaders group is already fully engaged, with a significant number of this group represented by countries from the so-called BRIC+SA. Companies from Brazil, China, India and South Africa are shown to be particularly strong in reporting on climate change policies, strategies, governance and risks, as well as for having in place emissions targets, measurement procedures, and mitigation and adaptation plans.
Despite these encouraging signs, the report maintains that standards of voluntary corporate climate change disclosures can still be improved, but that the climate change policy framework needs to be firmed up considerably to enable this to happen.
Split into four sections, the report includes:
- ACCA conducted research, over six years, into the reporting performance of ‘high impact’ industries – such as aviation and oil. They fall short of what investors and users of financial statements actually want, so the message is ‘could do better.’
- An analysis of mandatory and voluntary disclosure schemes currently operating – concluding that the disclosure web is growing tighter by the year for businesses.
- GRI–led research into the disclosures by businesses in the BRIC+SA nations - Brazil, Russia, India, China and South Africa – concluding that the developed and the developing world need to work closer and cooperate.
- And lastly, a section that comprises interviews with business, financial and sustainability experts from Professor Mervyn King to Lord Turner -about their views on the corporate response to climate change. “Timid”, “sleepy” and “not yet sufficient” are just some of the comments.
Roger Adams, executive director of policy at ACCA, says: “The interviews from expert commentators show that the corporate response may not have matched up the seriousness of the issues. Developing countries are expected to account for 75% of GHG emissions over the next 25 years, with China already responsible for one third of the global total. If we accept the premise that reporting drives behaviour, the extent to which corporates in these emerging economies continue to embrace climate change reporting will be critical to the future of the planet.”
Teresa Fogelberg, Deputy Chief Executive at GRI will speak at the COP 15 Conference and says: “It is important to consider that while governments spend months and years in climate negotiations, it is companies who are ‘the elephants in the room’. What I find particularly encouraging, is that many of these are large companies from emerging markets such as China, India and South Africa.
We can then look to them as leaders who are setting concrete reduction and adaptation targets, and measuring progress made towards their targets using a common framework such as the GRI Guidelines. Companies really are the silent force – and a significant one; of the largest economies in the world, 52 are multinational enterprises and only 47 are nation states. It is therefore vital to monitor what enterprises have done, and what they are doing, to measure and reduce their carbon usage.”
The report can be downloaded from this link: http://www.accaglobal.com/pubs/general/activities/library/sustainability/reporting_pubs/challenge_reporting.pdf
About ACCA ACCA is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. We have 362,000 students and 131,500 members in 170 countries worldwide.
About GRI The Global Reporting Initiative has pioneered the development of the world’s most widely used sustainability reporting framework and is committed to its continuous improvement and application worldwide. This framework sets out the principles and indicators that organizations can use to measure and report their economic, environmental, and social performance. www.globalreporting.org