This presentation is for interested members of the public including investors, NGO's, and educators.
I chose to focus on the use of disclosure reporting and ranking as market mechanisms because I believe there's untapped potential in the pursuit of significant behavioral change for carbon reduction.
Social science research indicates that accountability reporting and transparency initiatives can impact on corporate behavior due to their concerns with reputational gains and losses.
There are many carbon reporting systems and indexes being developed. It is important to view these initiatives critically to ensure that they meet both science-based targets and social equity principles.
2. Challenges, Responses +
Opportunities
• Challenge: Turn Down the Heat: Why A
Four Degree C Warmer World Must Be
Avoided
• Responses: Changing Behaviour at
Individual, Institutional, Corporate and
Country Level
• Opportunities: Motivators for Behaviour
Change
2
6. Ingredients/ Elements/ Factors
for Behaviour Change
• Access to Information (about scope of
the problem) and Awareness of Options
for Change
• Advocacy and Persuasion
• Incentives: Social Pressure, Market
Mechanisms and Policy Instruments
• Leadership + Commitment
6
7. Varied Mechanisms
• Voluntary Initiatives on part of
institutions and corporations: prompted by
pressure from investors and ethically
oriented consumers
• Legislative Mandatory Reporting
Requirements (examples: Denmark,
United Kingdom)
7
10. Carbon Disclosure + Reporting:
Rationales
• Use of market-based environmental policy
tools and instruments to:
• Focus on economic incentives as crucial
means to reduce carbon emissions
• Encourage informed decision making
taking energy usage and greenhouse gas
emissions in account in business planning
• Manage risks and communicate with
stakeholders + wider public 10
11. CD + R: Opportunities
• Opportunities for:
• Setting and pursuing targets for capping
and reducing carbon emissions
• Giving priority to energy efficiency in the
design and development of new projects
• Identifying new opportunities for low
carbon business
11
12. Carbon Disclosure Project
• Carbon Disclosure Project (CDP): charity
based in UK working with corporations and
shareholders (institutional investors) to
facilitate voluntary disclosure of greenhouse
gas emissions of major corporations
12
14. 14
How: Carbon Disclosure +
Reporting Standards
• Voluntary Initiatives:
• Global Compact (GC)
• Organization for Economic Cooperation
and Development (OECD) Guidelines for
Multinational Enterprises (GME)
• Global Reporting Initiative (GRI)
• Global Initiative for Sustainability Ratings
(GISR)
15. Source: http://www.unglobalcompact.org 15
The Global Compact
Background and purpose
• World's largest aspirational corporate
citizenship and sustainability initiative
Development and governance
• Initiative of United Nations (UN), led by
Secretary General’s Office, and
supported by seven UN agencies
16. Global Compact Principles
• Environment
• Principle 7: Businesses should support a
precautionary approach to environmental
challenges;
• Principle 8: undertake initiatives to promote
greater environmental responsibility; and
• Principle 9: encourage the development and
diffusion of environmentally friendly
technologies.
• Other Principles focus on Human Rights, Labour
and Anti-Corruption
16
17. 17
OECD: October 2013; Carbon Phaseout by 2050, Achieve
by pricing in order to stay below 2° C target
“Unlike the financial crisis, we do not
have a 'climate bailout option' up our
sleeves,” Angel Gurria, Sec Gen OECD
18. 18
Background and purpose of Guidelines for Multinational Enterprises
(GME)
• OECD is international membership organization of states (34), mainly
of developed nations
•Purpose is to promote economic development
• Standing stakeholder committees: trade union advisory committee and
business and industry advisory committee
Development and Governance
• GME started in 1976, with latest revision in 2011.
•Intended for guidance only, though supported by monitoring
mechanism
• Governments that adhere to the guidelines required to establish
National Contact Point (NCP) agency
19. 19
OECD GME standard
• disclosure
• human rights
• employment and industrial relations
• the environment
• combating bribery
• protecting consumer interests
• science and technology
• competition
• taxation
21. 21
Global Reporting Initiative (GRI)
• Background & Purpose:
– aim to be comprehensive & consistent.
• Development & Governance:
– Designed with broad multi-stakeholder group
– First iteration in year 2000, GRI 4 in 2013
22. 22
Deliverable:
• Annual corporate “Communications on
Progress” (COP) report. GRI is
recommended over the Global Compact
for greater assurance, though GC useful
to get initial buy-in, especially in
developing countries.
23. Source: *http://www.wri.org/sites/default/files/pdf/ghgp_launch_factsheet_2011.pdf 23
CERES conclusion, GRI & similar standards
• Ceres compared GRI and other standards’ effectiveness at
implementing human rights, including to a carbon budget as
described by IPPC, IEA, World Bank, OECD & IMF.
• One large shortfall of existing broad standards is failure to
understand & recognize physical limits of carbon cycle & equity
issues involved.
• GRI & Carbon Disclosure Project (CDP) hide systemic effect of
emissions under “Scope 3: Product Life Cycle” section that are not
deemed sufficiently material or mandatory to report downstream
effects.
• GRI doesn’t sufficiently recognize Principle 7 of 1992 Rio
Declaration, “Common But Differentiated Responsibilities”.
• CERES, GRI’s parent NGO takes corrective action, and founds the
Global Initiative for Sustainability Ratings, (GISR).
it covers
• disclosure
• human rights
• employment and industrial relations
• the environment
• combating bribery
• protecting consumer interests
• science and technology
• competition
• taxation
Annual corporate “Communications on Progress” (COP) report. GRI is recommended over the Global Compact for greater assurance, though GC useful to get initial buy-in, especially in developing countries.
