Are carbon and climate reporting standards finally aligning?
For quite some time, people responsible for carbon, energy, climate change and environmental sustainability reporting have been required to grapple with an alphabet soup of reporting standards. The knock on impact of this has been that for many of these professionals, and therefore for the organisations they work for, the focus has been on reporting rather than making the changes needed to reduce and manage their impacts.
Of course, reporting is a vital part of any sustainability plan for numerous reasons: it ensures stakeholders are informed, it allows an understanding of the necessary and important information to report, it allows companies to benchmark performance and to ultimately drive improvements. But all too often we hear from our clients that the demands of reporting to external frameworks means that they are distracted from actually delivering the improvements that drive change.
That is why the project to align a number of the main reporting standards and frameworks, announced last week, is such good news. The Better Alignment Project opens a dialogue between CDP, the Climate Disclosure Standards Board, the Financial Accounting Standards Board, the Global Reporting Initiative, the International Accounting Standards Board, the International Organisation for Standardisation, the Sustainability Accounting Standards Board, and is convened by the International Integrated Reporting Council. Phew!
The aim of the two year project is to make it easier for companies to prepare effective and coherent disclosures that meet the information needs of capital markets and society.
The recommendations of the Task Force on Climate-Related Financial Disclosures and its focus on mainstreaming climate risk planning and reporting in financial disclosures seems to be a driver behind the project. SASB, GRI and CDP will map their frameworks against the TCFD recommendations, to better align their metrics. The project will also consider how frameworks such as the IIRC’s and CDSB’s can be used to promote further integration between non-financial and financial reporting.
The project aims to run over two years with the initial findings due in Q3 2019. We hope that the exercise leads to rationalisation of questions and ideally, in time, a single reporting platform.
To better understand the current reporting situation, you can find a useful tool here: http://corporatereportingdialogue.com/landscape-map/