Communicating the impact of climate change on businesses is causing companies to review their communication policies, and especially in their use of their internet sites.
A coalition of global investors from 13 countries, managing over US$2.1 trillion of assets, has added its voice to the increasing calls for better corporate reporting on environmental, social and corporate governance (ESG) activities.
The international investor coalition is writing to 86 major companies urging them to honour the reporting requirements of the United Nations Global Compact, the world's biggest voluntary corporate responsibility initiative. Each of the 86 "laggard" companies has previously joined the UN initiative but failed to produce the mandatory annual report on how it puts the initiative's ten principles into action
Companies must consider the effects of global warming and efforts to curb climate change when disclosing business risks to investors, the U.S. Securities and Exchange Commission said.
New guidelines require companies to weigh the impact of climate-change laws and regulations when assessing what information to include in their corporate reporting. The SEC is responding to investors who said companies aren’t providing enough data on the potential risks to their profits and operations from environmental-protection laws.
The commission said companies in the U.S. should also consider international accords, indirect effects such as lower demand for goods that produce greenhouse gases, and physical impacts such as the potential for increased insurance claims in coastal regions as a result of rising sea levels.
However, IR teams will still have to decide what is ‘material’. SEC regulations already say that companies must disclose information pertinent to investment decisions. Even under these new guidelines, companies will have to decide what constitutes a “material risk” that must be shared with investors.
Meanwhile a new book from 3 influential corporate reporting specialists discusses to an emerging trend where companies are going beyond separate reports for financial and nonfinancial (e.g., corporate social responsibility or sustainability) results and integrating both into a single integrated report.
At the same time, they are also leveraging the Internet to provide more detailed results to all of their stakeholders and for improving their level of dialogue and engagement with them. Providing best practice online examples from companies around the world, the book – (One Report: Integrated Reporting for a Sustainable Strategy, Publisher: Wiley March 8, 2010) shows how integrated reporting adds tremendous value to the company and all of its stakeholders, including shareholders, and also ultimately contributes to a sustainable society.
Instead of having two reports, they are combined into one report in a thoughtful way. So you’re not just putting a giant staple between two reports, but explaining what you think the relationship is between financial and non-financial performance. How are you managing environmental issues or social issues? How is that contributing to lower costs, higher revenues, penetrating new markets, and green products?
