Following the UK government’s launch of the world’s first legally binding carbon budget, aimed at achieving an 80% reduction of carbon emissions by 2050, the dawn of mandatory reporting by a large number of UK companies on carbon emissions is fast approaching.
In response, PricewaterhouseCoopers LLP (PwC), the professional services firm, has developed a groundbreaking carbon emissions reporting model for business climate change and greenhouse gas emissions reporting. Until now, no clear example of reporting has been available to guide businesses preparations for reporting.
The model is based on a fictitious UK listed technology company, Typico plc, producing consumer durables and IT products with operations in Asia, UK, and the US. It illustrates the strategy, targets, performance, and benchmarking of how the company is working to reduce its impact on and adapt to climate change.
Bringing together all existing and anticipated reporting requirements of national and international regulatory bodies in one example, PwC have provided the first comprehensive demonstration of how companies could report their strategy and performance in dealing with climate change, which can be adapted to an individual company’s reporting needs and requirements.
Paul Rew, partner, Sustainability & Climate Change Assurance, PricewaterhouseCoopers LLP commented:
“Expected reporting guidelines must balance simplicity, so as not to burden business further, with presenting the information in a way that it is valuable and comparable with others. Typico plc sets out a flexible template to help companies develop and define good reporting practices for their business.
“While there is no one-size fits all solution, there are elements of Typico plc’s activities that all companies will recognise when reporting their strategy and performance in managing the impacts of climate change on their business.”
Anticipating the potential requirements of guidelines by bodies including DEFRA, the CBI, and the Climate Disclosure Standards Board, PwC’s Typico plc provides a format to help companies create their own report, with a summarised version for inclusion in annual report and account statements.
To date the format and composition of information published by business on their sustainability strategy has varied widely. While the extent of disclosure will vary according to the nature and size of the company, the Typico example sets out what PwC believes to be good practice for larger companies who will potentially face mandatory reporting of greenhouse gas emissions by 2012.
Alan McGill, partner, Sustainability and Climate Change Reporting, PricewaterhouseCoopers LLP said:
“This model is the first to demonstrate how reporting on emissions connects financial and non – financial data to see the value and impact of carbon emissions on a business and its strategy. Information, presented in this context will more accurately reflect the real risks – and opportunities – that climate change presents.
“Rather than compliance and data reporting alone, forward looking analysis and statements of the risks and opportunities affecting a business will become an established part of the reporting cycle. This model will support companies’ preparations for that by helping them identify the right questions to ask, the right data to measure and report on, resulting in them taking the right actions for their business.”
The Typico plc model forms part of PwC’s contributions to the work of the CBI Carbon Reporting Group and the international Climate Disclosure Standards Board.
Notes to Editor:
1. DEFRA’s guidelines for carbon reporting are expected for consultation in June 2009 and to be finalised by October 2009.
2. The Typico plc carbon emissions report model sets out
- Management commentary including:
- Purpose of the report, and background to the company
- Company climate change strategy
- Impacts of climate change on the business
- Governance of the business
- Financial performance overview (impact of GHGs)
- Regulatory schemes affecting the business
- Director’s responsibility and approval
- Primary Statement of Greenhouse Gas emissions for the group
- Greenhouse Gas reporting policies
- Assurance Statement
3. The CBI’s Carbon Reporting working group recently published a report on greenhouse gas emissions reporting, laying out a simple and common method for businesses to report their emissions publicly. Amongst the proposals set out in the report was a call for the government to create greenhouse gas emissions reporting guidelines based on the GHG protocol, for reporting requirements to align with existing CRC and EU ETS schemes, and for the government to establish what size of company will be mandated to report on its emissions. Further information can be found at http://climatechange.cbi.org.uk/latest_news/00196/
4. PwC has a 17 year track record of advising clients on sustainability and corporate responsibility issues across its assurance, tax and advisory practices. In the past eighteen months, the dedicated sustainability and climate change practice in the UK has tripled in size; the firm’s global team has expanded to over 700 practitioners.
5. PwC works with clients to develop sustainability strategy, performance management and reporting solutions including corporate governance and business ethics, environmental health and safety management, social responsibility, strategy and economics, responsible supply-chain management, and reporting and assurance of non-financial information.
6. PwC is one of 52 companies and 32 experts in the World Economic Forum’s task force on low carbon prosperity, who are working with the UK government and UN offices to develop a set of practical projects and policy proposals to significantly stimulate the low carbon economy from 2010 onwards.
7. In 2008 PwC was appointed the global advisor and report writer to the Carbon Disclosure Project. The firm analyses company responses to the flagship CDP survey measuring companies’ investment in and preparation for climate change, producing the Global 500, FTSE 350 and S&P 500 reports. The firm also offers strategic advice, including support and expertise on areas such as carbon emissions and climate risk reporting, carbon accounting systems and data verification.
8. The Climate Disclosure Standards Board (CDSB) was formed at the 2007 annual meeting of the World Economic Forum in response to increasing demands for standardised reporting guidelines on the inclusion of climate change information in mainstream reports. CDSB works to develop a globally accepted framework, based on existing standards, for corporate reporting on climate change.
PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients. More than 161,000 people in 154 countries in firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. See pwc.com for more information.