Corporate Climate Communications Report 2007

Corporate Climate Communications Report 2007 assesses global leading companies' climate change communications, as differentiated from their carbon performance.

The study looked at all the latest CSR reports from the Global FT500, evaluated against 29 climate disclosure elements, ranging from CEO statements to alignment with international standards.

During 2007, two-thirds of the Global FT500 issued a stand-alone non-financial report. The study found out that 44% of these reports included a general, third-party assurance statement. Evaluating these reports the study reveals that 87 per cent address climate change, with 78 per cent publishing greenhouse gas emissions data.
Further detailed analysis of all 29 climate disclosure elements by region, industry sector and market capitalization is detailed in the document.

Climate Change at the top of stakeholders’ agenda – Building trust through independent assurance
The 2007 Corporate Climate Communications (CCC) study covering the FT 500 companies indicates that climate change is high up on the business agenda. Of the two thirds of companies who published a CSR report in 2007, 87% address climate change in their reports, and 65% include a section dedicated to the issue.

44% of the CSR reports featuring in the CCC study include an independent third-party assurance (verification) statement. Moving outside the FT500 study universe and looking at all CSR reports, the respective share within the 2’500 CSR reports issued during 2007 was significantly lower (27%) Source: CorporateRegister.com.

Looking at the climate change reporters among the FT500, just over half include a general verification statement. These statements address the entire report and its various sections, and may or may not specifically address the climate change disclosures.

An independent assurance statement can enhance the credibility of a report. Providing this credibility is essential to building trust between a company and its stakeholders.

What are the drivers to voluntarily report and reduce GHG Emissions?
Greenhouse gas (GHG) emissions are not just measured for inclusion in CSR reports’. Boardroom decisions in many companies already take the GHG emissions associated with investments into account. This can be irrespective of any mandatory requirements to measure or reduce emissions.

Beyond the expectations of the boardroom and the readers of CSR reports, there are more strategic and competitive drivers to voluntarily report and reduce GHG emissions:

• protection of early action to reduce GHGs for companies that face mandatory regulation in the future (baseline protection);
• expected market advantages through the provision of emission neutral product and service offerings; and,
• to an increasing degree, pressure from governments/buyers who want to know the emissions embedded in the products and the supply chain of the products they source.

The common denominator behind all these drivers is that the measurement of GHGs and their reduction creates value for the company. In emissions trading markets, this value creation is obvious. However, the value created for a company from voluntary reporting is less tangible. Financial incentives can range from inclusion of a company’s stock in a Sustainable Development (or Social Responsible Investment) index to influencing consumer choices.

Reporting of emissions is only half the message – stakeholders want assurance
A consumer survey of 2,734 people in the US and UK during 2007 http://businessassurance.com/downloads/2007/07/what-assures-consumemate-crs-on-clihange.pdf, undertaken by AccountAbility and Consumers International, found the following:

“Sixty percent of respondents in the US and UK want companies to provide more product-based information at the point of sale, and half would rather do business with companies that are working to reduce their contribution to global warming. But consumers tend not to trust information from businesses on climate change. Two thirds of respondents said that business needs to take global warming more seriously (combined 66.4%: US 63.2%, UK 69.5%). Seventy percent of respondents in the US and UK said that climate change claims should be proven by independent parties.”

As the impact of a product on climate change becomes an important element in consumer choice, not only the consumers but even more so the companies should be interested in third party assurance of climate change claims made by their competitors.

Assurance solutions
General assurance of CSR reports is an important first step. Independent verification of CSR/ Sustainability reports is usually carried out against international guidelines, such as GRI and the AA1000 Assurance Standard. A thorough approach to general report assurance in these areas is based on different levels or modules that address the varying needs of clients:

• Independent review to ensure accuracy of the chosen reporting scope. This is most relevant for companies which make public social and environmental statements for the first time;
• Measurement against GRI and AA 1000 in addition to verifying accuracy. Objective is to help organisations with a long history of issuing social and environmental reports identify strengths and weaknesses where improvements can be made;
• Set up of systems to help manage relationships with stakeholders. This solution is relevant for organisations that consider social responsibility and environmental reports as on-going management tools.

However, it is important to note that the verification of accuracy and environmental integrity in reported GHG data requires a more detailed approach. The 2007 Corporate Climate Communications study shows that an increasing number of companies report their emissions in line with the WBSCD/WRI GHG Protocol. For current and forthcoming reporting cycles, reporting and verification against ISO 14064 requirements is of growing relevance in this field. For companies that already use the WBCSD/WRI protocol this will represent only a small step. However, this small step can become your competitive advantage.

Robert Dornau
Director of Climate Change Programme at SGS

SGS is the world's leading inspection, verification, testing and certification company. SGS is recognized as the global benchmark for quality and integrity.

Source: CorporateRegister.com
http://businessassurance.com/downloads/2007/07/what-assures-consumers-on-climate-change.pdf