The Earth’s Climate Change has really affected the individual, the household, businesses, Societies, and policymakers.
Climate Change has affected all our lives. On a macro level, Climate changes affect the socio-economic system of society and humanity at large.
-Now, who is or is responsible for Climate Change?
There will be hurling quarrels and scuffles all around. Remember we are on the verge of an imminent end. We are all stakeholders in this development.
Again narrowing down to a microcosmic picture, if some problem occurs back home, the blame is taken by the seniors.
Likewise, Industries need to take initiative. Companies need sustainable reporting standards. So, comprehensive climate reporting is one of the most important elements companies need to think about.
Key Facts On Climate change
Before going into the matter of fact let’s take a look at what really propelled industries to go for Climate Reporting:
- It is estimated that approximately 250000 deaths might be expected to be caused by Climate change.
- Climate Change affects drastically the environmental determinants of health that clean drinking water and sufficient foods.
- In terms of health, the drastic damage is estimated to be between USD 2-4 billion by 2030.
- The Iner-Government Panel on Climate Change (IPCC) made an observation that Catastrophic health impacts and restraint programs might limit the temperature rise to 1.5 degrees centigrade.
- Climate change completely jeopardizes the need for Universal Health Coverage. It needs to be mentioned that over 930 million people spend at least 10% of household income on healthcare.
- This very flow will drive 100 million people into poverty.
Task Force On Climate-Related Financial Disclosures (TCFD)
The demand and pressure are growing across multiple areas for Sustainable Environment Reporting.
There are initiatives like Climate Actions 100+ and groups of Institutional Investors Group raise awareness and concerns and actions like Disclosure on Climate-Related Informations.
This Task Force is supported by more than 2017 companies and organizations. The combined Market Capitalisation is over USD 12 Trillion.
Certain elements flickered out from the discussion and they include:
- Lower Operation costs and the use of Renewable energy.
- Greater Resource Efficiency and development of Cost-effective machinery.
- Extracting Potential Competitive Advantage and focussing on Low Carbon Alternative.
- Entry into new markets and unlocking new opportunities for cooperation.
- Increased Resilience to change in the environment of business and developing the supply change.
Sustainable Financial Reporting
A lot of discussions, thoughts, and introspections have been done on Preparing reports and developing awareness.
The International Financial Reporting Standards (IFRS) Foundation is prepared by the International Sustainability Standard Board (ISSB). This is to be launched at the COP26.
The financial Ministers of G7 countries raised awareness regarding the urgent need for Climate Change Financial Disclosures. There must be a Transparent and Accountable Auditing.
There are certain things your Corporate house needs to follow or Standardise in relation to Corporate Accounting:
1. Not To Wait For Sustainability Report To Be Mandated
Your Company now has a great opportunity to prepare its own regulations around Climate Sustainability Report.
This denotes companies that need to begin by identifying the metrics relevant to their sector, strategy, and Stakeholders. They can follow the Stakeholders Capitalism Matrices prepared by the World Economic Forum.
2. Putting Environment, Sustainable Reporting, And Governance On The Board’s Agenda
So when companies are binding themselves to Compliances, Regulations, and Disciplines, they can not sacrifice Profiteering and remaining Competitive.
The boards need to strictly monitor the International development in Sustainability Reporting. This requires a good reading of the broader strategy and risk management.
3. Trust Building On Sustainability Reporting
The preparation of the Organisations report and disclosure should expect to face some difficult questions. The report must be transparent and accountable.
The sustainability reports must go through robust trials and controls with supporting audit trials. A similar observation was made in the report of the European Commission.
It laid out that the Corporate Sustainability Report must contain information from the statutory auditor.
4. Integration Of Financial Function
You need to prepare a Climate Report under the observation and guidance of the Finance Department.
They need to thoroughly understand what the investor and general stakeholders and even the public want to know.
The reports prepared must be credible, trusted, and relevant to the stakeholder and must make the distinction between the non-financial and the financial information.
5. Contributing to The Process of Setting Standards
Leading companies in the world believe that ESG reports are integral to creating value over the long term.
They know very well that transparency and honesty in disclosing the results play a critical and decisive role in this overall process.
It can be said that the companies need to show more responsibility to the wider society and be professional in understanding the responsibilities.
The companies must be responsible for responding to the Government consultation.
They need to participate with the regulators and commit to the report prepared by the World Economic Forum International Business Council Stakeholder Capitalism metrics.
Only Transparency, Accountability, and Responsibility can solve the problems.