Reporting the Business Implications of Climate Change

In this global mission to reduce emissions, to move towards carbon neutrality in the interests of preserving the environment there are a number of supporting systems that exist – from measuring and reporting tools, standards and guidelines to information sharing products and financial incentives.

This spotlight is looking at some of those systems, at the capacity they have to increase the energy efficiency of global operations, but also at the operational costs that can be saved as balanced against the investment that is needed.

Amsterdam-based Global Reporting Initiative (GRI) called on companies, governments and NGOs to report publicly on their sustainability performance and include details on their greenhouse gas emissions during this year's World Environment Day in June.

Climate change caused by human activity is a defining issue of our era, and UNEP is asking countries, companies and communities to measure their greenhouse gas emissions and to reduce them.

GRI - a collaborating centre of UNEP - has developed the world's most widely used sustainability reporting framework: The GRI G3 Guidelines. The Guidelines are created and continuously improved in collaboration with thousands of people globally from business, civil society, labor and professional institutions.

G3 sets out how to measure and report on economic, environmental, and social performance, including climate change, in a consistent and comparable way.
Sean Gilbert, Director of Sustainability Reporting Framework at GRI said: "The time has come for companies – as well as governments and NGOs - to be transparent on the very serious risks to business, people and planet. Sustainability reporting is a way to demonstrate that risks are being considered and addressed. Often, the reporting process can also reveal business opportunities."

In mid-2007 GRI and KPMG released Reporting the Business Implications of Climate Change in Sustainability Reports. The research reveals that companies tend to be quick to identify new business opportunities from activities like carbon trading, but they are paying less attention to the business risks posed by climate change and its effects.

The GRI and KPMG report looked at annual sustainability reports of international companies in the Financial Times Global 500 list. Of those surveyed, 90 percent reported on climate change but only 20 percent reported any risks to their business from climate change.

This contrasts with the significant risk that climate change poses to the global economy. The UK government's Stern Report on the Economics of Climate Change in 2006 described our current situation as the "result of the greatest market failure the world has seen." This landmark report warned of major disruptions to economic activity in coming decades if climate change is ignored.