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climate change reporting ‘needs to step up a gear’

April 2007

UK companies report only fitfully on their climate change impacts and need to introduce more rigour into their disclosure, says a new analysis of some of the best sustainability reporters.

A study of entrants to the 2006 UK Sustainability Reporting Awards found pockets of good practice in climate change reporting, but said that most documentation was ‘variable or limited’ in quality and none of the companies in question disclosed information of a consistently high standard on key criteria.

The study, which looked at reporting by the 42 entrants considered to have a high or medium impact on climate change, was conducted by FTSE and Ethical Investment Research Services. There were 87 entrants in all.

David Aeron-Thomas, head of metrics at Forum for the Future, who was on the five-strong panel that assessed the reports, said companies needed to improve if they were to satisfy stakeholders that they are taking the issue seriously.

‘Overall there were some excellent examples of how to report well, but we found no single organization that covered all the ground,’ he said.

Aeron-Thomas said the researchers were concerned that one in five companies published no absolute data on climate change, that less than a quarter disclosed both short- and long-term emissions reductions targets, and that about a third published information without explaining it.

He urged more companies to follow the example of National Grid, which has a clear target of a 60 per cent cut in carbon dioxide emissions by 2050, and of Transport for London, which puts its figures in the context of the capital’s total emissions.

Half of the 42 publicly expressed support for the scientific evidence on climate change, with good examples being Shell and BAA.

Only one in 20 provided a breakdown of emissions from their various activities, with Centrica, which publishes emissions data for all its production and generation sites, singled out as an example for others to follow.

Just over half of the reports assured by a third party specifically mentioned climate change in the assurance statement.

Many of the criteria examined by FTSE and Eiris are among new climate change standards to be applied to companies eligible for inclusion in the FTSE4Good index (EP8, issue 10). Of the 250 companies listed by FTSE as being affected by the criteria, fewer than 50 are thought to be meeting the standards at present.

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