The document discusses the UK regulations requiring companies to report their greenhouse gas emissions. It provides an overview of the regulations and guidance on complying with the reporting requirements, which began for financial years ending on or after September 30, 2013. Companies must disclose their GHG emissions in tonnes of carbon dioxide equivalent and may omit information if it is impractical to obtain, but must explain any omissions. Methodologies from standards like ISO and the WRI/WBCSD Protocol can be used.
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Communicating Climate Change Risks in Annual Reports
1. @CDSBGlobal
Andrea
Smith
Technical
Manager,
CDP
on
secondment
to
DEFRA
Lois
Guthrie
Execu<ve
Director
CDSB
David
Harris
Director
of
ESG
FTSE
Jonathan
Shaw
Senior
Manager,
Grant
Thornton
UK
LLP
Patrick
Crawford
Corporate
Engagement
CDSB
Complying
with
UK
GHG
regula<ons:
Using
CDSB's
Repor<ng
Framework
Thursday
25th
July
2013
2. @CDSBGlobal
Thursday
25th
July
2013
What
is
your
primary
discipline?
• Finance
• Company
secretary
• Sustainability
• Other
Poll
ques<on
3. The Companies Act 2006 (Strategic Report and
Directors’ Report) Regulations 2013
Andrea Smith
Technical Manager
CDP
4. { Campaign led by Aldersgate Group
{ Climate Change Act 2008
• Guidance on GHG accounting/reporting
• Consider mandatory reporting of GHG emissions
“from activities for which the
company is responsible”.
{ Deputy Prime Minister announcement Rio+20
{ Timetable
GHG Regulation History
Page 4
5. { Change to Companies Act 2006
{ Annual report changes
{ Some reporting requirements removed; some added
{ Strategic report
{ Quoted companies
• Directors’ report - GHG emissions
• If of strategic importance → Strategic Report
{ http://www.legislation.gov.uk/ukdsi/2013/9780111540169/contents
Regulation overview
Page 5
6. { In the Directors’ Report//Strategic Report
{ Data for whole company - global
{ Applies to reports prepared in respect of financial years ending on or after 30
September 2013
{ The GHG reporting year may be different to the financial reporting year – but this must
stated
{ No verification requirement
Reporting of GHG emissions
Page 6
7. When will my company have to start reporting?
Page 7
Your usual financial
year
Your first reporting year under the regulation
1 January to 31 December 1 January 2013 to 31 December 2013
1 April to 30 March 1 April 2013 to 30 March 2014
1 October to 30
September
1 October 2012 to 30 September 2013
8. {
GHGs in tCO2e from activities for which the company is responsible including
• the combustion of fuel
• the operation of any facility
{ GHGs resulting from the purchase of electricity, heat, steam or cooling by the
company for its own use
{ Comply or explain what is missing and why
{ State methodologies used
{ Give at least one emission intensity metric
{ Must repeat previous year’s data for these points (with the exception of first reporting
year)
Reporting of GHG emissions
Page 8
9. { Undertakings in consolidated financial statement are a reference point
{ If companies consider that reporting emissions from activities for which they are
responsible means that they will:
• Not report on GHG emissions from certain operations covered by the consolidated
financial statement; or
• Report on GHG emissions from operations that are not included in this statement
they must make this clear
Reporting boundary
Page 9
10. { Companies can use the methodologymethodologies of their choice
• ISO14064 – Greenhouse gases. Part 1 (2006)
• WRI / WBCSD Greenhouse Gas Protocol: A Corporate Accounting and Reporting
Standard (Revised Edition)
• UK Government GHG reporting guidance
• Global Reporting Initiative Sustainability Reporting Guidelines
• Climate Disclosure Standards Board Climate Change Reporting Framework –
Edition 1.1 October 2012
Methodology
Page 10
11. Omissions
Page 11
Report on all material emissions of the 6 Kyoto gases from direct sources and
from purchased electricity, heat, steam and cooling.
• May omit information if it has not been practical to obtain. Companies must state if they have
omitted any material emissions - and why.
• If you do not have the information necessary to meet the regulatory requirement in the first
reporting year, you must either:
• provide an estimation instead, based on extrapolating data that you do have, or use
generic data that is not specific to your company. You are required to disclose your
methodology and this would form part of your methodology;
• explain why you are unable to provide 12 months’ data
13. {
Conduct Committee of Financial Reporting Committee
• Monitors compliance with the Companies Act 2006
• Can order a company to revise a report
• To date has resolved issues by agreement with companies & without recourse to court
Enforcement
Page 13
14. {
One document:
Environmental Reporting Guidelines: Including mandatory greenhouse gas
emissions reporting guidance.
{ Three sections:
• Chapter 1: Reporting environmental impacts in general - voluntary
• Chapter 2: Mandatory GHG reporting
• Chapters 3-8: Reporting specific impacts: water, waste, resource use, emissions to air,
land, water, biodiversity - voluntary.
• https://www.gov.uk/measuring-and-reporting-environmental-impacts-guidance-for-
businesses
More information
Page 14
17. @CDSBGlobal
CDSB’s
Repor<ng
Framework
Communica<ng
Climate
Change
in
Annual
Reports
Thursday
25th
July
2013
Patrick
Crawford
Corporate
Engagement
CDSB
18. @CDSBGlobal
Financial
statements
capture
less
than
20%
of
corporate
risks
(source:
Eurosif,
IIRC)
Increasing
ESG
reporAng
requirements
–
UK,
EU?
Increasing
requirement
to
integrate
ESG
informa<on
with
financial
repor<ng
Increasing
impact
of
climate
change
on
decisions
and
ac<ons
by
management,
investors
&
other
stakeholders
Connec<ng
Non-‐Financial
and
Financial
Informa<on
19. @CDSBGlobal
The
integra+on
of
climate
change-‐related
informa+on
into
mainstream
corporate
repor+ng.
Objec<ve
When?
• January
2007:
Launched
at
World
Economic
Forum,
Davos,
managed
as
a
special
project
of
CDP
Climate
change
informa<on
in
CDP
disclosure
CDSB’s
Framework
Annual
Report
Members
• “Big
4”
accountants,
ACCA,
ICAEW
…
• GHG
NGOs
e.g.
GHG
management
ins<tute,
Carbon
Tracker,
TCR
• Investors,
e.g.
Investor
Group
on
Climate
Change,
Ceres
• Business,
e.g.
WBCSD,
BT,
WEF
• Standardize
climate
change-‐related
repor<ng
for
fair
and
transparent
markets
Why?
The
need
for
CDSB’s
Repor<ng
Framework
20. @CDSBGlobal
CDSB’s
ReporAng
Framework
•
Integrates
exis<ng
regula<ons
rather
than
crea<ng
new
standards
•
Complements
the
CDP
process
•
Communicates
management’s
assessment
of
climate
change
in
annual
reports
•
Connects
Financial
and
non-‐
financial
informa<on;
harmonizing
with
exis<ng
accoun<ng
and
na<onal
standards
•
Conformance
with
the
Framework
is
a
means
of
compliance
with
UK
greenhouse
gas
regula<ons
CDSB’s
Repor<ng
Framework
22. @CDSBGlobal
A
stepping
stone
to
producing
integrated
reports
CDP
InformaAon
request
CDSB
Guidance
CDSB’s
ReporAng
Framework
THE
DATA
THE
LENS
THE
HELP
VISIBILITY
Mainstream
Report
CDSB’s
Repor<ng
Framework
in
Prac<ce
23. @CDSBGlobal
PuOng
it
into
pracAce
1.
DeterminaAon:
Decide
what
to
report
2.
PreparaAon:
Gather
clear,
consistent,
complete
Informa<on
3.
PresentaAon:
Ensure
disclosure
is
clear
4.
Review:
Check
accuracy
and
ensure
relevance
CDSB’s
Repor<ng
Framework
in
Prac<ce
24. @CDSBGlobal
Summary
of
requirements
2.30
Disclosures
shall
be
clear
and
Straigh7orward
2.32
Informa<on
shall
…
explain
the
links
between
the
organiza<on’s
strategy
…
and
climate
change
impacts.
2.36
Organiza<ons
shall
disclose
performance
measures
…
to
manage
the
business
and
...
against
climate
change-‐
related
targets
2.41
Disclosures
shall
be
consistent
with
the
associated
financial
statements
of
the
organiza<on…
CDSB’s
Repor<ng
Framework
in
Prac<ce
25. @CDSBGlobal
DETERMINATION
–
Decide
what
to
report
•
Iden<fy
the
needs
of
your
investors
regarding
climate
change
•
Reflect
the
Board’s
assessment
of
the
impacts
of
climate
change
on
the
company’s
financial
performance
•
Appraise
your
current
business
model
regarding
climate
change
risks,
opportuni<es
and
challenges
•
Review
regulatory
and
compliance
obliga<ons
CDSB’s
Repor<ng
Framework
in
Prac<ce
26. @CDSBGlobal
CDSB’s
Repor<ng
Framework
in
Prac<ce
Requirements
on
DeterminaAon
2.3
An
organiza<on
shall
determine
the
disclosures
to
be
made
under
the
CCRF
according
to
the
categories
of
disclosure
content
that
are
of
value
to
investors
and
a
process
that
involves
a
thorough
assessment
of
how
climate
change
has
actually
affected
or
has
the
poten<al
to
affect
the
organiza<on’s
strategic
objec<ves.
27. @CDSBGlobal
CDSB’s
Repor<ng
Framework
in
Prac<ce
PREPARATION:
Gather
clear,
consistent,
complete
informaAon
•
Provide
clarity
on
the
repor<ng
period
and
repor<ng
boundaries
•
Iden<fy
relevant
standards,
protocols
and
policies
•
Analyse
material
issues
posed
by
climate
change
•
Consider
the
relevant
<me
scales
for
past
results
and
future
prospects
•
Include
a
Statement
of
Conformance
with
CDSB’s
Repor<ng
Framework
28. @CDSBGlobal
CDSB’s
Repor<ng
Framework
in
Prac<ce
Requirements
on
PreparaAon
2.12
Disclosures
shall
be
made
on
a
consistent
basis
and
shall
include
the
informa<on
that
is
necessary
to
maximize
its
value
to
investors.
29. @CDSBGlobal
PRESENTATION:
Ensure
disclosure
is
clear
•
Ensure
informa<on
is
relevant
and
useful
for
investor
decision
making
•
Use
simple
language,
with
enough
context
and
assump<ons
•
Discuss
the
link
between
climate
risk
and
company
prospects
•
Ensure
presenta<on
allows
easy
year-‐
on-‐year
comparisons
•
Segment
informa<on
to
focus
investor
analysis
•
Use
climate
change
measures
to
show
progress
against
targets
CDSB’s
Repor<ng
Framework
in
Prac<ce
30. @CDSBGlobal
CDSB’s
Repor<ng
Framework
in
Prac<ce
Requirements
on
PresentaAon
2.26
Disclosures
shall
be
presented
and
communicated
so
as
to
make
them
useful
for
investors.
31. @CDSBGlobal
REVIEW:
Check
accuracy
and
ensure
relevance
•
Check
the
content
against
the
expecta<ons
of
steps
1,
2,
and
3
•
Ensure
the
final
report
has
a
rigorous
internal
review
and
sign-‐off
•
Align
other
company
communica<ons
with
the
mainstream
report
•
Share
the
report
with
selected
external
stakeholders
to
invite
their
perspec<ve
CDSB’s
Repor<ng
Framework
in
Prac<ce
32. @CDSBGlobal
CDSB’s
ReporAng
Framework
•
Complements
the
CDP
process
•
Communicates
management’s
assessment
of
climate
change
in
annual
reports
•
Connects
Financial
and
non-‐
financial
informa<on;
harmonizing
with
exis<ng
accoun<ng
standards
•
Conformance
with
the
Framework
is
a
means
of
compliance
with
UK
greenhouse
gas
regula<ons
•
Download
CDSB’s
Repor<ng
Framework
and
Guidance
from
www.cdsb.net/Framework
CDSB’s
Repor<ng
Framework