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Susan McGeachie - Sustainability Issues on the Horizon

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)
    • 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.
    • 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