cdp spring workshop 2014 (cdsb framework presentation)

@CDSBGlobal www.cdsb.net 1

Integra(ng environmental performance & risk in mainstream financial reports

Dr Jarlath Molloy CPhys Technical Manager, CDSB

CDP spring workshop


Outline

+  About the Climate Disclosure Standards Board

+  External repor(ng drivers

+  Not another Framework?

+  Consulta(on

+  Summary


About the Climate Disclosure Standards Board

+  CDSB is a consor(um of business and environmental organiza(ons formed at the 2007 World Economic Forum’s annual Davos mee(ng

+  CDP has provided secretariat support since incep(on and coordinates day-‐to-‐day ac(vi(es

Who we are



Who we are

+  Supported by leading industrial & financial services companies, NGO representa(ves, the major accoun(ng firms, professional bodies, academics and other specialist collaborators



+  CommiUed to the integra(on of climate change related informa(on into mainstream corporate repor<ng

+  Working with others

What we do


Guidance issued by CDSB



Guidance issued with others



External repor<ng drivers

+  Danish Financial Statements Act

+  EU Accoun(ng Direc(ves (proposed)

+  French Grenelle II

+  South African King Code

+  UK Companies Act

+  Find out more at cdsb.net/standards

Mandatory repor9ng



Proposed amendments to EU accoun9ng direc9ves



+  Background +  Amendment to the Accoun(ng Direc(ve in 2003 (enacted in 2005)

+  Required companies to report environmental KPI in their annual report

+  2,500 of 42,000 large companies in the EU reported

+  Scope (number of companies) +  250 – 500 employees minimum

+  Turnover € metric

+  Loca(on of non financial statement +  Within 6 months of balance sheet date



+  Content: +  Policies, results, risks, due diligence +  Environmental (plus social, employee, human rights, an(-‐corrup(on, bribery)

+  The use of renewable and non-‐renewable energy, greenhouse gas emissions, water use and air pollu(on

+  Compliance tools & frameworks +  Na(onal / EU / interna(onal frameworks

+  EC guidance to support land use, water, GHG emissions and use of materials

+  Audit / verifica(on +  Auditors should check non-‐financial statement or separate report is provided

+  Member states to determine if independent assurance is required of non-‐financial statement prepared outside the report

+  Timeline





GHG emissions repor9ng by UK quoted companies

+  Approx 1,100 – 1,600 fall under scope of new requirements

+  61 reported from FTSE 600 (30th Sept 2013 – 24th Feb 2014)

+  UK quoted companies are UK registered companies with equity shares (companies trading equity or equity & debts) on LSE main market, EEA regulated market, NYSE or NASDAQ



Preliminary findings:

+  Materiality not clearly defined by companies

+  No clear correla(on between materiality assessment and discussion of risk in reports

+  Environmental performance disclosed in isola(on without narra(ve

+  Lack of clarity on boundaries and intensity metrics

+  Addi(onal guidance for prac((oners, auditors, solu(ons providers, etc. could be useful




Many organisa(ons may prepare and publish informa(on requested by:

This may expand to:

Voluntary repor9ng


Not another Framework?

+  Prepare & present environmental performance & risk informa(on in mainstream financial reports

+  Designed to allow investors to assess the rela(onship between environmental performance & risks and the organisa(on’s strategy & prospects

+  Cross referencing other repor(ng requirements (CDP CC4)

CDSB Framework focuses on iden9fying environmental risk in mainstream reports



+  Harmonise repor(ng of environmental risk by having it included in, or linked to, an organisa(on’s mainstream financial report

+  Environmental performance & risk subject to the same Interna(onal Financial Repor(ng Standards & assurance requirements as financial informa(on

+  Centrally deposited with competent na(onal authority promptly and publically available

+  Working with regulators, CDP and the Fujitsu Research Ins(tute to develop an eXtensible Business Repor(ng Language (XBRL) taxonomy

Advantages of mainstream reports

Climate change informa(on in CDP and

other disclosures

CDSB

Framework

Annual Report



+  Focus of previous CDSB Framework on climate change risks & opportuni(es affec(ng an organisa(on’s strategy and financial performance

+  Scope has now expanded into forest commodity risks and water

+  The expansion of the CDSB Framework will now cover 79% of natural capital

Aiming for natural capital repor9ng


Consulta9on open 19th February – 12th May 2014

+  90 day consulta(on period open

+  Online consulta(on planorm

+  Public comments promote dialogue among reviewers

+  Consulta(on planorm will manage consulta(on process

+  Available at cdsb.net/consulta(on



Summary

Concluding remarks

+  CDSB working with others on sustainability repor(ng

+  Disclosures by UK quoted companies suggest mixed success in compliance with new UK Companies Act requirements

+  Amendments to EU Accoun(ng Direc(ves at cri(cal point

+  CDSB Framework expanded scope and aiming for natural capital

+  Consulta(on now open, comments welcome

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Climate Disclosure Standards Board

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Thank you

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cdp spring workshop 2014 (cdsb framework presentation)

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