While South Africa scored poorly in the World Economic Forum (WEF) competitive index for education, it is rated first out of 144 countries for corporate reporting and protection of minority shareholders’ rights.
Robbie Louw, a director of carbon advisory firm Promethium Carbon, says at the recent Climate Change and Integrated Reporting conference that clear guidelines need to be set around the materiality of information that is disclosed by a company in its integrated report.
The conference was jointly hosted by Promethium Carbon and the Climate Disclosure Standards Board (CDSB) in London.
“This means that if information is not material then companies shouldn’t include it. Integrated reporting is not about long reports,” he says.
“The basis for inclusion of the impact of climate change on a company is events with a higher likelihood and higher magnitude of impact.”
The World Economic Forum (WEF) rated the following 10 climate change- related risks amongst the top risks the world is facing for 2013: water supply, failure of climate change adaption, energy price volatility, food shortage, rising GHG emissions, vulnerability to pandemics, persistent extreme weather, land and water mismanagement, mineral resource supply and consequences of mitigation.
Louw gave examples of extreme weather patterns that were randomly selected during a two week period between 25 June and 5 July last year.
“There were severe droughts across the Horn of Africa and North and South Korea. Floods in India displaced 900 000 people and 250 000 people in Bangladesh. Torrential rain was seen in the US, flash floods in the UK, a violent storm across Northern Virginia and wildfires and stifling heat in the mid-US states. All these events can have a serious impact on a company.”
Another example of extreme weather patterns is Australia’s Bureau of Meteorology that needed to introduce a new colour for its weather map; indicating an unprecedented 52 degrees centigrade temperature.
“On the financial markets, the Securities Exchange Commission (SEC) in the US has allowed a shareholder request for Boston Common Asset Management to assess the asset manager’s GHG emissions exposure relating to its lending risk, investments and financing activities.”
BHP Billiton in Australia has noted its vulnerability to cyclones and identified it as a real risk to their business. But Louw says that opportunities also exist.
“Reporting should not only include risks, but also business opportunities. We believe that every single company has opportunities relating to climate change that needs to be reported on.”
Lois Guthrie, executive director of the Climate Disclosure Standards Board (CDSB) in London, spoke about the CDSB’s Climate Change Reporting Framework saying that a publication is now available covering materiality in integrated reporting which was jointly produced with Promethium Carbon.
“The CDSB is a special project of CDP, committed to the integration of climate change-related information into mainstream corporate reporting,” she says.
Promethium Carbon and the CDSB have developed the publication to provide CEOs, CFOs, reporting committees and internal auditors with a reference tool on integrated and climate change-related reporting.
“Integrated reporting and climate change-related reporting have much in common. Both are relatively new, both require companies to think and act in new ways, and most importantly, both can help to shape a corporation’s competitive advantage over the next decade,” says Guthrie.
“The publication explores and compares the fundamental concepts, guiding principles and content elements set out in the International Integrated Reporting Council’s Prototype Framework with requirements of the CDSB’s Framework, and illustrates how they complement each other through examples.
“The effect of climate change, including the way in which it will affect all forms of capital is relevant to any business today and is likely to result in material effects. Businesses across many sectors will therefore be looking to increase disclosures about climate change in their integrated report.”
The conference was jointly hosted by Promethium Carbon and the Climate Disclosure Standards Board (CDSB) in London.
“This means that if information is not material then companies shouldn’t include it. Integrated reporting is not about long reports,” he says.
“The basis for inclusion of the impact of climate change on a company is events with a higher likelihood and higher magnitude of impact.”
The World Economic Forum (WEF) rated the following 10 climate change- related risks amongst the top risks the world is facing for 2013: water supply, failure of climate change adaption, energy price volatility, food shortage, rising GHG emissions, vulnerability to pandemics, persistent extreme weather, land and water mismanagement, mineral resource supply and consequences of mitigation.
Louw gave examples of extreme weather patterns that were randomly selected during a two week period between 25 June and 5 July last year.
“There were severe droughts across the Horn of Africa and North and South Korea. Floods in India displaced 900 000 people and 250 000 people in Bangladesh. Torrential rain was seen in the US, flash floods in the UK, a violent storm across Northern Virginia and wildfires and stifling heat in the mid-US states. All these events can have a serious impact on a company.”
Another example of extreme weather patterns is Australia’s Bureau of Meteorology that needed to introduce a new colour for its weather map; indicating an unprecedented 52 degrees centigrade temperature.
“On the financial markets, the Securities Exchange Commission (SEC) in the US has allowed a shareholder request for Boston Common Asset Management to assess the asset manager’s GHG emissions exposure relating to its lending risk, investments and financing activities.”
BHP Billiton in Australia has noted its vulnerability to cyclones and identified it as a real risk to their business. But Louw says that opportunities also exist.
“Reporting should not only include risks, but also business opportunities. We believe that every single company has opportunities relating to climate change that needs to be reported on.”
Lois Guthrie, executive director of the Climate Disclosure Standards Board (CDSB) in London, spoke about the CDSB’s Climate Change Reporting Framework saying that a publication is now available covering materiality in integrated reporting which was jointly produced with Promethium Carbon.
“The CDSB is a special project of CDP, committed to the integration of climate change-related information into mainstream corporate reporting,” she says.
Promethium Carbon and the CDSB have developed the publication to provide CEOs, CFOs, reporting committees and internal auditors with a reference tool on integrated and climate change-related reporting.
“Integrated reporting and climate change-related reporting have much in common. Both are relatively new, both require companies to think and act in new ways, and most importantly, both can help to shape a corporation’s competitive advantage over the next decade,” says Guthrie.
“The publication explores and compares the fundamental concepts, guiding principles and content elements set out in the International Integrated Reporting Council’s Prototype Framework with requirements of the CDSB’s Framework, and illustrates how they complement each other through examples.
“The effect of climate change, including the way in which it will affect all forms of capital is relevant to any business today and is likely to result in material effects. Businesses across many sectors will therefore be looking to increase disclosures about climate change in their integrated report.”