Although climate reporting has focused on two primary issues — greenhouse gas (GHG) emissions and efforts to reduce them, and the risks and opportunities created by climate change, a third issue is emerging — engagement in climate policy (PDF), according to a new report from BSR.
The report finds that companies need to transparently communicate all climate policy efforts, particularly as more investors demand to see that they are creating value; customers judge them by their leadership roles, and watchdog groups look for inconsistencies between their stated climate goals and policies.
The BSR report, “Communicating on Climate Policy Engagement: A Guide to Sustainability Reporting” (PDF), focuses on this third emerging issue and offers guidelines on how businesses can communicate to customers, investors, and the public on their climate policy engagement efforts. The report also provides best practices from leading firms committed to sustainability including Hewlett-Packard, Johnson & Johnson, and Unilever.
BSR recommends that companies take three key approaches to reporting: be explicit and clear about goals and objectives to solve climate change, be straightforward about the company’s policy and answer difficult questions before they are asked, and use diverse reporting channels including Websites, sustainability reports and the CDP questionnaire to communicate your company’s consistent message.
By communicating transparently about climate-change efforts, companies can meet commitments to stakeholders and position themselves as leaders in climate progress, says BSR.
Stakeholders also include regulatory agencies and reporting initiatives that are also asking for more transparency. As an example, the U.S. Securities and Exchange Commission issued new climate change disclosure guidance in February, which requires businesses to report on how climate change will impact their businesses.
Another reason to beef up disclosures is a potential loss of revenues. A recent survey of Carbon Disclosure Project members shows that more than half would stop doing business with suppliers that don’t manage their carbon.