Spring is here! That means it’s corporate reporting season, which conjures far less idyllic sentiments than April showers and May flowers. For many sustainability practitioners, this also means reporting on carbon emissions.
While reporting carbon emissions is a standard element of corporate sustainability programs for some Canadian companies, it has has failed to gain traction in many others. For instance, in 2015, only about 140 companies in Canada reported to the CDP, a not-for-profit organization that has developed the largest and most widely used global system for companies and cities to disclose information on GHG emissions. Only 59% of companies on the Toronto Stock Exchange report their carbon emissions, often through voluntary corporate sustainability reports. These percentages are even lower for the New York Stock Exchange and the Nasdaq (34% and 20%, respectively).
We believe these numbers should be higher, so we would like to present you with four reasons why your company should report carbon emissions and management data.
Top four reasons why Canadian companies should disclose carbon information
- Momentum for climate change action is at an all-time high
In Canada, the interest in climate change has never been higher. Ontario, Alberta, BC, and Quebec are all in the midst of significant policy development or revisions of climate regulations. The federal government has made climate change a priority and is working to coordinate a pan-Canadian approach. Internationally, the Paris Agreement that came out of the UN Climate Conference (COP21) in December 2015 marked the first time that all countries around the world agreed that carbon must be reduced.
Also emerging out of Paris was the Financial Stability Board’s new Task Force on Climate-related Financial Disclosures, chaired by Michael Bloomberg and intended to create consistent corporate guidelines for financial disclosure of climate change-related risk. The message from the task force is clear: transparent disclosure of climate change risks is critical to assessing long-term business prosperity.
In response, corporate executives from all sectors of the economy are trying to understand what these new climate dynamics will mean for their business. So are investors. Disclosing emissions data and management practices are a crucial step in understanding the impacts, risks, and opportunities related to climate change across the economy.
- Carbon disclosure underpins corporate leadership
Disclosing carbon emissions data and management information is essential for any company seeking recognition or leadership in corporate responsibility. Carbon disclosure has become table-stakes for being considered a good corporate citizen, and is now a necessary practice in order to demonstrate strong environmental management to stakeholders. In our experience, most corporate sustainability leaders disclose carbon information.
- Carbon data is used by key stakeholders and is increasingly becoming a business expectation
Increasingly, carbon data is being used and requested by a large number of business stakeholders: individual and institutional investors, Bloomberg’s investor data terminal, ESG research firms and brokers are all beginning to use carbon data to inform investment decisions. Carbon data is frequently submitted to sustainability awards and rankings, and even stock exchanges and are beginning to eye carbon disclosure as a prerequisite for listing. Large corporations are requesting carbon information from their suppliers, while corporate peers, competitors, NGOs, and researchers all use carbon disclosure information to inform research and assess trends in corporate climate change management. Across a variety of stakeholders, carbon disclosure is increasingly becoming a business expectation.
- Carbon reporting can bolster and support internal climate change strategies
At Delphi, time and again we have seen how the process of reporting emissions data and management practices can be used as a tool to advance climate change strategies and raise the profile of climate change management within a company. The reporting process cross-cuts business divisions and offers an opportunity to engage a wide range of internal personnel on climate change management. Once emissions information is public, there is an automatic impetus to improve. This engagement opportunity can often be the most valuable aspect of carbon reporting for a company.
The Delphi Group can help
At Delphi, we have been helping companies prepare carbon disclosures and advance their climate change strategies for several years. At times we have shared our frustrations over the reporting process. Various reporting platforms, whether CDP or otherwise, have their unique considerations and challenges. We know this landscape well and can help your company navigate the changing world of carbon disclosure. Rest assured that, whether you are a seasoned reporter or just starting out, we have the tools, knowledge and experience to help you prepare exceptional carbon disclosures that will benefit your company.