International agreement on how to manage the inclusion of climate change reporting in annual reports moved a step closer to reality this week following the publication of proposals detailing how a global reporting system could work.

In a statement released this week, international climate change body the Climate Disclosure Standards Board (CDSB) said the proposals were designed to help management include sustainability and environmental information in annual reports.

Speaking at the World Business Summit in Copenhagen, Paul Dickinson, chief executive of the Carbon Disclosure Project (CDP), one of the principal members of the CDSB, said the proposals represented an important step towards encouraging companies to disclose climate change-related data.

“As the current economic crisis illustrates, the failure to acknowledge risks in the short term can lead to substantial legacies in the long term,” he said. “There is no scarcity of warnings of the risk of irreversible climatic damage to the environment. Against this background, it is imperative that companies supply their shareholders with appropriate climate-change data.”

The CDSB consortium of businesses and organisations was founded in January 2007 at the Annual Meeting of the World Economic Forum in Davos, Switzerland to help agree standards on climate change reporting. CDP is a board member of the CDSB and holds what it claims is the “largest corporate climate change database in the world”.

Lois Guthrie, CDP’s technical director and secretary to CDSB, added: “This is an important step towards better reporting and we now welcome responses to our proposals.”

The CDSP said that it is aligning itself with established financial reporting principles and is using the expertise of its board members including the International Emissions Trading Association, the World Economic Forum and the World Resources Institute.

Dr Wolfgang Große Entrup, head of environment and sustainability at German pharmaceutical giant Bayer AG, welcomed the new proposals, arguing that the development of global standards “will be instrumental in enhancing the calibre and comparability of disclosures within corporations’ reporting”.

Earlier this month, the UK’s CBI set out its own blueprint for a single, common standard on how firms report their greenhouse gas emissions, saying that the use of competing methodologies could undermine businesses’ efforts to cut carbon emissions.

According to the CBI, there are currently six different standards that businesses can use to report emissions voluntarily, resulting in carbon data that is not easily comparable.

Larger businesses also face a number of mandatory carbon reporting rules with energy companies and industrial firms already having to report emissions as part of the EU Emissions Trading Scheme.

Around 5,000 UK firms will also have to provide emissions reports from next year under the government’s Carbon Reduction Commitment, while mid-size companies are expected to face mandatory emissions reporting rules from 2012 as a result of the recently passed Climate Change Act.

Source: BusinessGreen 

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