Review pubished of FTSE 350 companies’ environmental reporting and GHG emission disclosures in annual reports

Source: CDSB, 29 January 2016

CDSB (Climate Disclosure Standards Board) is an international consortium of business and environmental NGOs. CDSB published the report ‘Comply or Explain’ with the results of a review of the FTSE 350 companies’ environmental reporting and greenhouse gas emission disclosures in annual reports.

There is increasing pressure on companies to provide information about their environmental impacts and dependencies. This reflects the view that those charged with the governance and management of organisations are stewards not just of investors’ financial capital, but also of natural capital, with a responsibility to report how that stewardship is being exercised. From a relatively narrow “shareholder value” perspective, the environmental risks to sustainable economic value creation are becoming increasingly clear. From a broader social perspective, the cumulative impact on our climate and on our natural resources is a matter of enormous consequence and urgency. Relatively speaking, environmental reporting practice remains in its infancy and there is much to learn.

Drawing information from one of the world’s leading capital markets, this report reviews the disclosure of environmental information in FTSE 350 companies’ annual reports following the implementation of the UK Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 20131 (“the Regulations”). The report also provides some sector analysis and uses examples to illustrate current practice. The aim is to inform companies, regulators and governments of current reporting practices and their implications for the implementation of the EU NonFinancial Reporting Directive2 (“the NFR Directive”), as well as for the further development of corporate reporting. Here we identify some key issues that emerge from the report. The issues are summarised in the form of eight statements.

The first four represent observations about corporate reporting practice and the other statements propose steps that could be taken by regulators to enhance the enabling environment for disclosure. The statements are intended to provoke discussion and reflection on the contents of the report

Download the report (pdf)