For years, the planet has been reeling from the impacts of climate change. This is a serious phenomenon that has persisted for years, and most of the efforts adopted to address it globally in the past have returned sub-optimal results.
The most recent was the Kyoto Protocol, and experts have remained divided on the causes of its failure. However, the threat of climate change and global warming are now more severe, but we have one more chance to address them through climate reporting / carbon disclosures.
So, will climate reporting work where other strategies failed? How is it implemented? Who are the primary drivers? Well, these are the questions that many people, especially managers and entrepreneurs, have been asking all along. The truth about climate reporting and sustainability is that if everyone gets involved, it is possible to address it.
As a stakeholder-driven process, climate reporting is promising better results in addressing global warming, and your company should join this noble fight. Here is all that you need to know about climate reporting that you need to know.
What are the Benefits of Climate Reporting for Your Company?
Climate reporting is the assessment of risks and opportunities, both physical and transition climate change impacts, on an organization or company. It also discloses the efforts that a company has put towards addressing the risks or change to be adopted both in the short-term and long term.
Although largely anchored on the Paris 2015 Agreement that called for governments to focus on keeping the global temperatures below 2.0 degrees Celsius above the pre-industrial levels, stakeholders are now taking a more active role in pushing for change in companies. They only want to be associated with companies that are responsible for their actions. The good thing about climate reporting is that the efforts come with major advantages. Here are the main benefits to anticipate for climate risk reporting in your organization or company.
- Better Compliance to Legal Requirements
Today, climate reporting is largely voluntary, but things are changing rather fast. Governments are taking up the task, and it is only a matter of time before reporting turns into a mandatory requirement for them.
Therefore, adopting climate reporting in your company can help you comply with emerging regulations at the local and regional levels.
The UK, Germany, Singapore, Hong Kong, and Canada, among other countries, have specific climate and financial reporting or policies that touch on climate. All about SBTI on this article.
Most companies working on climate reports also focus on social and governance impacts. This means they are able to easily comply with more laws and policies on workplace safety, diversity, and labor requirements. In some jurisdictions, these laws and experts' recommendations on financial and carbon disclosures might be all that is required to get an operating license renewed.
- Stronger Attachment to Stakeholders
The process of climate reporting starts with a comprehensive review of a company's processes to identify major risks and opportunities. It also involves engaging stakeholders to help you understand their preferred or recommendations for reporting topics. Indeed, this is only the first step because most companies engage their stakeholders all through the reporting process. Do you know the GHG protocol?
When you finally release the climate report for your company, stakeholders will easily identify with it. They will be able to know that your company is preparing for the risks ahead by installing strategies for change and optimizing returns on investment. For example, how will the company’s efforts to cut down emissions result in revenue growth? Will the energy-related costs come down?
Once content with the report, they will become the brand ambassadors to carry your message to others, both offline and online.
- A Cleaner Environment for All
When you think of climate reporting, what runs through the mind? The ultimate goal is getting a cleaner and healthier environment for all. When you look at the idea of sustainability broadly, it implies that you (manager, supervisor, or investor), your family, company staff, and society will enjoy living in a cleaner environment. Your company will also enjoy reduced risks, higher productivity and incur less in lost man-hours related to poor health of staff. Do you know the science based targets initiative?
Three Things that You Need to Start Climate Reporting
For many people, climate reporting is a complex process because of the long list of parameters that are involved. Well, this does not have to be challenging if you follow the right process. A better idea would be working with professionals in sustainability reporting.
- Understanding the Principles of Climate Reporting: This is perhaps the most important requirement in the process of climate reporting. These sustainability principles help to ensure that all reports follow the same procedure and further reduce the risk of greenwashing. The main principles of climate reporting are:
- Materiality.
- Verifiability.
- Clarity.
- Continuity.
- Consistency.
- The Right Climate Reporting Framework: To prepare a high-quality climate report, you also require the right framework. This one serves as a guide to help your company achieve pre-set objectives both locally and globally. The most preferred reporting framework is the Task Force on Climate-Related Financial Disclosures (TCFD). Others include Global Reporting Initiative (GRI) and Carbon Disclosure Project (CDP).
- Good Sustainability Reporting Software: One fact about carbon reporting is that it can be pretty challenging when you try to do it manually. Imagine following multiple parameters, checking back to ensure the disclosure process adheres to the principle of continuity and adhering to changing policies. Doing the task of sustainability reporting manually can increase the risk of your report getting labeled greenwashed. Well, there is a way out: Using an appropriate sustainability reporting app.
With the right program for climate reporting, it is easy to follow the selected framework, gather the right data, and prepare a report that will win stakeholders' affection.
This is not all; you can even integrate the app with the company management to automate the process of data collection and disclosure. Do you know how to calculate carbon emissions?
A Note about Cost of Climate Reporting
One of the reasons given by managers and entrepreneurs for not disclosing their climate-related risks is cost. Often, these costs are associated with human resources training on sustainability, product development adjustments, acquisition of new equipment, and search for new supply chain trends. However, the cost of climate reporting for companies only looks high from the short-term perspective.
The costs for the disclosure and producing the report will become negligible when compared to benefits in the long-term. For example, installing new machinery and changing product design can raise productivity and profits for the company. Ultimately, your brand will grow both locally and globally.
Indeed, the benefits will be a lot more when you factor in non-financial advantages, such as knowing that you helped address the problem of global warming.
The lovely thing is that you can keep the cost low by working with a good carbon reporting program. If your team is not conversant with the process, it will also be a good idea to work with a professional.
Diginex.com Simplify ESG Sustainability Reporting
Climate reporting is an emerging topic, but it is gaining traction rather fast. Every year, more companies are coming out to disclose their carbon risks to stakeholders. We are only getting started as more governments are working hard to impress their stakeholders and comply with emerging disclosure policies. To get the process of climate reporting right, the best idea is working with professionals at Diginex.com.
Diginex is a renowned provider of sustainability services, and you can count on them for assistance with the entire process. Our experts have helped other brands to achieve the targeted sustainability goals, and this is your turn. This is not all.
We also have advanced ESG reporting software that you can count on to get the process right. The apps work well with most frameworks, from TCFD to GRI, desktops and mobile devices to help you follow the process of climate reporting even when away. For example,you can set the app to follow the selected framework, such as TCFD, emission rates, and even create mini reports.
Climate reporting is the new tool and process that we have been waiting for to overcome the challenge of global warming. With more educated stakeholders, clear benefits associated with ESG reporting, and software to drive accuracy, you should never be left behind. Let Diginex.com, the best experts in sustainability reporting, help you get the process right.
