@CDSBGlobal
Andrea	
  Smith	
  
Technical	
  
Manager,	
  CDP	
  
on	
  secondment	
  
to	
  DEFRA	
  
Lois	
  Guthrie	
  ...
@CDSBGlobal
Thursday	
  25th	
  July	
  2013	
  
What	
  is	
  your	
  primary	
  discipline?	
  
•  Finance	
  
•  Compan...
The Companies Act 2006 (Strategic Report and
Directors’ Report) Regulations 2013
Andrea Smith
Technical Manager
CDP
{ Campaign led by Aldersgate Group
{ Climate Change Act 2008
•  Guidance on GHG accounting/reporting
•  Consider mandato...
{ Change to Companies Act 2006
{ Annual report changes
{ Some reporting requirements removed; some added
{ Strategic r...
{ In the Directors’ Report//Strategic Report
{ Data for whole company - global
{ Applies to reports prepared in respect...
When will my company have to start reporting?
Page 7
Your usual financial
year
Your first reporting year under the regulat...
{ 	
  	
  GHGs in tCO2e from activities for which the company is responsible including
•  the combustion of fuel
•  the o...
{  Undertakings in consolidated financial statement are a reference point
{ If companies consider that reporting emissio...
{ Companies can use the methodologymethodologies of their choice
•  ISO14064 – Greenhouse gases. Part 1 (2006)
•  WRI / W...
Omissions
Page 11
Report on all material emissions of the 6 Kyoto gases from direct sources and
from purchased electricity...
Page 12
{ 	
  Conduct Committee of Financial Reporting Committee
•  Monitors compliance with the Companies Act 2006
•  Can order ...
{ 	
  One document:
Environmental Reporting Guidelines: Including mandatory greenhouse gas
emissions reporting guidance.
...
www.cdp.net | @CDP
@CDSBGlobal
Jonathan	
  Shaw	
  
Senior	
  Manager	
  
Grant	
  Thornton	
  UK	
  LLP	
  
Advisor	
  perspec<ve	
  
@CDSBGlobal
CDSB’s	
  Repor<ng	
  Framework	
  
Communica<ng	
  Climate	
  Change	
  in	
  Annual	
  Reports	
  
Thursday	...
@CDSBGlobal
Financial	
  statements	
  capture	
  less	
  than	
  20%	
  of	
  
corporate	
  risks	
  (source:	
  Eurosif,...
@CDSBGlobal
The	
  integra+on	
  of	
  climate	
  change-­‐related	
  
informa+on	
  into	
  mainstream	
  corporate	
  re...
@CDSBGlobal
CDSB’s	
  ReporAng	
  Framework	
  
	
  
•	
  Integrates	
  exis<ng	
  regula<ons	
  
rather	
  than	
  crea<n...
@CDSBGlobal
Communicating Climate Change
“Reporting from the
principle of communication
rather than compliance.“
Hermes EO...
@CDSBGlobal
A	
  stepping	
  stone	
  to	
  producing	
  integrated	
  reports	
  	
  
CDP	
  InformaAon	
  
request	
  
C...
@CDSBGlobal
PuOng	
  it	
  into	
  pracAce	
  
	
  
1.	
  DeterminaAon:	
  
Decide	
  what	
  to	
  report	
  
	
  
2.	
  ...
@CDSBGlobal
Summary	
  of	
  requirements	
  
	
  
2.30	
  Disclosures	
  shall	
  be	
  clear	
  and	
  
Straigh7orward	
...
@CDSBGlobal
DETERMINATION	
  –	
  Decide	
  
what	
  to	
  report	
  
	
  
•	
  	
  Iden<fy	
  the	
  needs	
  of	
  your	...
@CDSBGlobal
CDSB’s	
  Repor<ng	
  Framework	
  in	
  Prac<ce	
  
Requirements	
  on	
  
DeterminaAon	
  
	
  
2.3	
  An	
 ...
@CDSBGlobal
CDSB’s	
  Repor<ng	
  Framework	
  in	
  Prac<ce	
  
PREPARATION:	
  Gather	
  clear,	
  
consistent,	
  compl...
@CDSBGlobal
CDSB’s	
  Repor<ng	
  Framework	
  in	
  Prac<ce	
  
Requirements	
  on	
  PreparaAon	
  
	
  
2.12	
  Disclos...
@CDSBGlobal
PRESENTATION:	
  
Ensure	
  disclosure	
  is	
  clear	
  
	
  
•	
  Ensure	
  informa<on	
  is	
  relevant	
  ...
@CDSBGlobal
CDSB’s	
  Repor<ng	
  Framework	
  in	
  Prac<ce	
  
Requirements	
  on	
  
PresentaAon	
  
	
  
2.26	
  Discl...
@CDSBGlobal
REVIEW:	
  Check	
  accuracy	
  and	
  
ensure	
  relevance	
  
	
  	
  
•	
  Check	
  the	
  content	
  again...
@CDSBGlobal
CDSB’s	
  ReporAng	
  Framework	
  
	
  
•	
  Complements	
  the	
  CDP	
  process	
  
•	
  Communicates	
  ma...
@CDSBGlobal
David	
  Harris	
  
Director	
  of	
  ESG	
  
FTSE	
  
Investor	
  perspec<ve	
  
@CDSBGlobal@CDSBGlobal
Patrick	
  Crawford	
  
Corporate	
  Engagement	
  
patrick.crawford@cdsb.net	
  
Tel:	
  +44	
  (0...
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Complying with UK GHG regulations: Using CDSB's Reporting Framework

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Slides of a webinar that positions the new UK GHG reporting regulations in context shows how conformance with CDSB's Reporting Framework is a means of compliance.
Recording of the webinar can be found here:
http://www.cdsb.net/news/245/video-complying-uk-ghg-regulations-using-cdsbs-reporting-framework

Topics covered:

Global regulatory, investor and business context
UK context
Compliance
Using CDSB's Framework to comply
Speakers:

Chair: Lois Guthrie - Executive Director, CDSB

UK context: Andrea Smith - Technical Manager, CDP, on secondment to DEFRA

Advisor perspective: Jonathan Shaw - Senior Manager, Grant Thornton UK LLP
Using CDSB's Framework: Patrick Crawford - Corporate Engagement, CDSB
Investor perspective: David Harris - Director of ESG, FTSE

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Complying with UK GHG regulations: Using CDSB's Reporting Framework

  1. 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. 2. @CDSBGlobal Thursday  25th  July  2013   What  is  your  primary  discipline?   •  Finance   •  Company  secretary   •  Sustainability   •  Other   Poll  ques<on  
  3. 3. The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 Andrea Smith Technical Manager CDP
  4. 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. 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. 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. 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. 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. 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. 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. 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  
  12. 12. Page 12
  13. 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. 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
  15. 15. www.cdp.net | @CDP
  16. 16. @CDSBGlobal Jonathan  Shaw   Senior  Manager   Grant  Thornton  UK  LLP   Advisor  perspec<ve  
  17. 17. @CDSBGlobal CDSB’s  Repor<ng  Framework   Communica<ng  Climate  Change  in  Annual  Reports   Thursday  25th  July  2013 Patrick  Crawford   Corporate  Engagement   CDSB  
  18. 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. 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. 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  
  21. 21. @CDSBGlobal Communicating Climate Change “Reporting from the principle of communication rather than compliance.“ Hermes EOS Investors CDSB’s  Repor<ng  Framework  in  Prac<ce  
  22. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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  
  33. 33. @CDSBGlobal David  Harris   Director  of  ESG   FTSE   Investor  perspec<ve  
  34. 34. @CDSBGlobal@CDSBGlobal Patrick  Crawford   Corporate  Engagement   patrick.crawford@cdsb.net   Tel:  +44  (0)  7770  382256   Skype:  patrickcrawford   www.cdsb.net   @CDSBGlobal   Climate  Disclosure  Standards  Board   facebook.com/CDSBGlobal   Subscribe  to  our  newsleoer  by  emailing  info@cdsb.net   Thank  you  

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