GREEN INITIATIVES - 25.06.2020

It’s good to share

The Chair of the Environment Agency has spoken of the importance of “disclosure” as a tool to drive environmental improvement. What does it mean and what are the benefits to organisations which participate?

What is it?

“Disclosure” refers to the practice of sharing information on environmental performance. The speech was made to the Carbon Disclosure Project UK (see The next step ) during which Emma Howard Boyd described the reasons why disclosure is gaining importance: “People increasingly want to know what their money is doing. Millions around the world, with money in pensions, want to support projects that produce a return and reduce emissions. How can consumers trust that companies are taking meaningful action if they don’t have access to clear and understandable data? Investors increasingly demand transparency.”

The influence of pension funds

She describes how the Environment Agency (EA) Pension Fund and the Church of England National Investing Bodies set up the Transition Pathway Initiative (TPI) in 2017. The TPI evaluates companies’ preparedness for the transition to a low carbon economy. Analysis published via a benchmarking tool has been taken into consideration in the investment of $18tn so far. EA Pension Fund representatives have also been attending AGMs of the companies it invests in to ask for reassurance that they are preparing supply chains and assets for escalating climate impacts.

Trickle down

It seems that disclosure on environmental performance and resilience is going to be high on the agenda of the majority of large corporations. In 2018 the Parliamentary Environmental Audit Committee recommended that “The Government should set a deadline that it expects all listed companies and large asset owners to report on climate-related risks and opportunities…on a comply or explain basis by 2022 .”

What are the benefits?

Increasingly, investment is dependent on the company being part of a climate disclosure scheme. This trend also affects those who are not listed on a stock market too, as larger organisations look to ensure that their supply chains are not letting the side down. Although being part of a formal reporting system like TPI is for the major players, the principle of environmental disclosure is still beneficial to much smaller companies.

The main gain is reputational - through transparency you can show your clients and customers that you take your responsibilities seriously. It may gain you the edge over competitors and, in any case, environmental reporting can be a contractual condition.

Tip 1. Your board and senior management might want to consider how transparency on environmental matters might help you reach your organisational objectives. The basic starting point for this could be measuring your carbon footprint and setting objectives on how to reduce it.

Tip 2. Many of the most effective methods of reducing carbon footprint have all been practised during the coronavirus pandemic, e.g. reducing journeys by air and road. Now’s the time to capture the learning from those new ways of working and making it part of everyday working life.

For a link to the speech, visit http://tipsandadvice-environment.co.uk/download (EN 15.02.04).

Disclosure is the practice of sharing environmental performance information. It’s becoming critical to the investment decisions of major funds but smaller organisations can also benefit reputationally by being transparent. Consider sharing your carbon footprint and your plans to reduce it.

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