Susan McGeachie - Sustainability Issues on the Horizon
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Susan McGeachie - Sustainability Issues on the Horizon

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Susan McGeachie - Sustainability Issues on the Horizon Susan McGeachie - Sustainability Issues on the Horizon Presentation Transcript

  •  
  • Emerging Sustainability Issues
    • Climate change
      • Remains a leading issue of concern
      • Paralysis in Copenhagen
    • Biodiversity loss
      • Expanding awareness throughout 2010
      • At the nexus of many other risks
    • Freshwater resources
      • Increasing water scarcity: an environmental and social issue
    • Total contribution
      • Socio-economic assessment of a company’s net impact
  • Climate Change
    • Remains one of the leading sustainability issues of our time, yet one for which global consensus on mitigation strategy continues to elude us (e.g. Copenhagen)
    View slide
  • Climate Change
    • Affects many aspects of business risk (and potential opportunities):
      • Financial : costs associated with regulatory GHG reduction requirements
      • Operational: negative impact on a company’s inputs through resource constraints or disruptions, and increasingly unpredictable weather patterns that could impede revenue forecasts
      • Physical : adverse impacts on infrastructure due to climatic change depending on the region in which a company, and its operations, are located
      • Reputational : consumers increasingly looking to reduce their carbon footprint through lifestyle changes and more select product selection
      • Legal : compliance with climate change regulations, water withdrawal licenses and land access permits.
    View slide
  • Climate Change
    • Numerous stakeholders requesting disclosure on executive ability to manage climate change-related issues:
      • Regulators (e.g. seeking industry collaboration in addressing international commitments to fight climate change)
      • Investors (e.g. CDP)
      • Consumers (e.g. possibility of carbon labelling)
  • Biodiversity
    • Variability among living organisms within species, between species, and between ecosystems
    • Underpins the proper functioning and delivery of ecosystem services
    • Biodiversity loss can exacerbate other observed risks, including coastal flooding and droughts and desertification
    • Requires revising valuations for ecosystem services that are currently undervalued
    • Still very much a nascent area for corporate reporting, despite growing concern among stakeholders and GRI guidance on how to measure and disclose corporate ability to prevent biodiversity loss
  • Freshwater Resources
    • Concerns over:
      • Water quantity : natural and man-made changes to water availability.
      • Water quality : protection of drinking water, human health impacts, and ecosystems/ biodiversity.
    • These two concerns are often inter-connected: as water quantity decreases, concern over quality increases.
  • Freshwater Resources
    • Significant diversity in how companies address water issues in sustainability reports, depending on:
      • Internal factors:
        • How integral water is to business and operations
        • Nature of impact(s) on water
        • Company environmental programs
        • Company policy on reporting
      • External factors :
        • Local/regional water availability and quality
        • Stakeholder concerns / demand for information
        • Regulatory environment
  • Total Contribution
    • Reporting the total impact a company has on the regions in which it operates by measuring contributions to local:
      • Government revenues (taxes – subsidies)
      • Employment
      • Investment (e.g. use of local suppliers)
      • Access to education
      • Community support (e.g. NGO partnerships, sponsorship, disaster relief)
      • Infrastructure
      • Knowledge transfer
      • Conservation initiatives
  • Future of Reporting
    • Companies moving to online reporting and continuous disclosure of sustainability information
    • Increasing demand for more rigour behind sustainability data
    • Investors calling for third party assurance of sustainability data
    • Greater integration of sustainability information in traditional corporate disclosures and analysis
    • OSC last year mandated to assess the investor need for more robust environmental and social disclosure
  • Concluding Thoughts
    • There is increasing pressure from a number of stakeholders for companies to improve the quality of their sustainability reporting
    • Companies face myriad sustainability issues, increasing the importance of meaningful materiality assessments to prioritize them according to their impact on the company and the society in which it operates
    • As sustainability issues increase in complexity, practical solutions continue to evade us
    • There will continue to be less confidence in sustainability reporting as long as it, and the independent assurance of this type of data, remains voluntary
  •