Comparing Apples to Apples – four indicators standardize GHG transparency

According to a Carbon Disclosure Project survey, 85% of leading global companies surveyed reported having board or senior executive level responsibility for climate change.

What separates Berkshire Hathaway from National Australia Bank? 

Carbon disclosure for one thing. 

Last week the Carbon Disclosure Project (CDP) reported that the National Australia Bank had been on both the Carbon Disclosure Leadership Index and the Carbon Performance Leadership Index for three years running.  Berkshire Hathaway on the other hand ranked at the top of the “non-responders” list – “ouch!”. 

Climate Change a Strategic Priority

The CDP, a group gathering climate change information for over 500 institutional investors with combined assets of $ 64 trillion under management, also announced that carbon performance leaders are forging ahead of competitors.  Accordingly, 85% of leading global companies surveyed reported having board or senior executive level responsibility for climate change.  Nearly half (48%) are now embedding climate change initiatives into the overall business strategy and across the organization. 

Yet, despite the significant increase of boardroom and executive-level engagement, and 65% of Global 500 respondents implementing emissions reduction targets, only 19% of the Global 500 companies are showing significant emissions reductions.

CDP also noted that North America significantly lags Europe in disclosure and performance. 21% of European respondents are in the CPLI, compared to 6% of North American respondents.

Movement to GHG Transparency

Meanwhile a new set of financial ratios are coming to a statement near you.  It won’t be long before

“Fuelled by opportunities to reduce energy costs, secure energy supply, protect the business from climate change risk and reputational damage, generate revenue and remain competitive, carbon management continues to rise as a strategic priority for many businesses,” said Paul Dickinson, CEO of CDP.

financial analysts can use financial indicators to evaluate management’s GHG Management effectiveness, optimize portfolios and determine risk premiums.

The Network for Business Sustainability recently released “Assess your company’s carbon performance using a standardized approach”, an analysis of a set of four indicators that capture physical and financial aspects in the present and over time.   They include:

  1. Carbon intensity – relates carbon usage to business performance. Calculated as the firm’s carbon usage for the year divided by a financial metric (e.g. sales) for the same time period.
  2. Carbon dependency – the change in a company’s use of carbon (intensity) over a given time period, expressed as a percentage.
  3. Carbon exposure – financial implications of carbon use for a given time period. Relates a company’s carbon costs to another financial metric (e.g. sales).
  4. Carbon risk – the change in monetary carbon performance over a given time period, expressed as a percentage.

Researcher Timo Busch says that physical indicators (intensity and dependency) help identify the steps in the value chain where companies can reduce their GHG emissions. Financial indicators (exposure and risk) reveal the carbon costs and risks underlying a company’s business activities. 

Steve Boles, President of Kuzuka teaching the ” ON-LINE Measuring & Reporting your Carbon (GHG) Footprint” webinar. His company has provided carbon measurement and reporting services to: Saputo, Grocery Gateway, Vineland Estates Winery, Huron County, Avon Maitland District School Board and others.

So What is your Carbon Count?

 Berkshire Hathaway got a lot of media coverage for being in the non disclosure “dog house”, but I expect that internally they know where they stand.  Do you? 

If not, check out our upcoming ON-LINE Measuring and Reporting your Carbon (GHG) Footprint 

In this “hands on” webinar, find out.

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About Kathryn Cooper

Kathryn Cooper is a committed sustainability practitioner and educator moving companies toward “green” profitability and sustainable competitive advantage by unlocking human creativity and technical innovation. Over the last two years she has had the privilege to work with companies like Dupont, Zerofootprint, WWF Canada, and Partners in Project Green on sustainability issues, best practices and renewable energy. Kathryn is a graduate of York University with a Master of Education specializing on Sustainability and the Environment. She holds an MBA from Wilfrid Laurier University, and a Bachelor of Science from the University of Guelph.
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