CDP UK spring workshop 2016 (CDSB Framework presentation)

Editor's Notes

• #2: Why it ‘Matters’
• #3: INTANGIBLES becoming increasingly ‘tangible’ (e.g. increasing energy prices directly affecting overheads, volatile commodity prices, etc..) Environmental Goods and Services are equally meaningful and of capital importance in determining the value of a company’s performance and prospects CDSB does this by offering companies a framework for reporting environmental information with the same rigour as financial information. In turn this helps them to provide investors with decision-useful environmental information via the mainstream corporate report, enhancing the efficient allocation of capital.
• #4: The CDSB Framework  help you connect environmental performance with overall strategy, performance and prospects (at the core of management commentary in annual reports) Clear, concise and comparable presentation, Support compliance & assurance activities  
• #5: With regards to accounting rules and financial reporting,  the IFRS indicates that the management commentary offers an opportunity for a company’s management to provide a comprehensive picture on management statements, the company performance and the allocation of capital. In particular, this part of mainstream reporting covers the nature of the business, the management objectives -and the strategies  for meeting those objectives and likelihood of success- the entity’s most significant  risks, resources and relationships, the results of operations and prospects, and the critical performance measures and indicators used to evaluate performance against objectives.  In short, climate risk is material and relevant to a company’s position, performance and prospects.
• #6: VALUE, the value a company creates is a result of the relations of all types of capital. Natural capital refers to the existing STOCKS and FLOWS and Ecosystem Resources and Services that generate both tangible and intangible services What are the key assets and resources on which your core business relies one? Natural capital IS about understanding the key natural resources impacts and dependencies specific to your business Natural Capital Dependencies Environmental results Environmental R&O Environmental policies, strategies and targets Performance against targets RISK Mitigation (against losses/liability + reputation protection)  AND VALUE CREATION (to both markets and society, incl. employees and consumers) It is about being a ‘Responsible Business Output is the result of a production process, which combines knowledge, labou    intermediate inputs and non-financial or capital assetss 
• #7: A PLAN of action for people, planet and prosperity. SDG 6 – Clean Water and Sanitation SDG 7 - Renewable Energy SDG 12- Responsible Consumption SDG 13 – Climate Action SDG 14 – Life Below Water SDG 15 – Life on Land SDG 17 – Partnerships for the Goals
• #8: THE NCP will offer guidance and recommendations on methodology, valuation tools in different business applications USE debt capital markets to fund climate solutions Labelled green bonds are bonds that earmark proceeds for climate or environmental projects and have been labelled as ‘green’ by the issuer (CBI). At the ‘Future of Green Finance’ Conference (late March), the Governor of the Bank of England, Mark Carney, announced that serious resources will be allocated to catalyse the green bonds market with environmental risks to be factored into green certification and credit ratings. ALSO, strong trends in the growth of social impact bonds (to link to the SDGs).
• #9: Principles ‘critical for effective disclosures’
• #10: DIRECTIVE 2014/95/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups Circular Economy Package Brussels, 2 December 2015 the Commission adopted an ambitious new Circular Economy Package to stimulate Europe's transition towards a circular economy which will boost global competitiveness, foster sustainable economic growth and generate new jobs Capital Markets Union: an Action Plan to boost business funding and investment financing Brussels, 30 September 2015
• #11: Treasury decided to keep the GHG requirement following the budget review… “Continued reporting of GHG emissions was supported by a number of respondents and the government believes it is important to maintain this reporting in order to provide data transparency for investors and establish London as a centre of global green finance. The government also fully supports the work of the Financial Stability Board’s industry -led Task Force on Climate-related Financial Disclosures (TCFD)”  Our report reviewed 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 2013 - require companies to disclose information related to GHG emissions, environmental impact, polices, KPIs, principle risks and uncertainties. The report also provides some sector analysis and uses examples to illustrate current practice. The aim was to inform companies, regulators and governments of current reporting practices and their implications for the implementation of the EU Non-Financial Reporting Directive, as well as for the further development of corporate reporting.  Indeed the very purpose of the strategic report is to inform shareholders and help them assess how the directors have performed their duty under S172 Companies Act 2006 - this is a duty to promote the success of the company and have regard to (among other things) the impact of the company's operations on the community and the environment.
• #12: The CDSB Framework already provides a firm foundation for companies to use in identifying what and how climate information should be reported in mainstream reports.
• #13: Annual report review – CDSB experts will review your annual report and check how it aligns with your other reporting initiatives (e.g.: CDP, GRI or CSR report). We will assess your environmental reporting in relation to investor requirements. Conformance check with the CDSB Framework – we will perform rigorous checks against the requirements of the CDSB Framework, highlight areas of conformance and provide a gap analysis. Feedback briefing – we will present recommendations outlining areas of non-compliance with the CDSB Framework and provide feedback to meet best practice. Executive presentation – we can also join you in presenting our findings and recommendations to your CFO and executive team.