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CDSB Fact Sheet

The Climate Disclosure Standards Board Fact Sheet

Mission and background

The Climate Disclosure Standards Board (CSDB) is a consortium of seven business and environmental organizations that has been formed for the purpose of jointly advocating a generally-accepted framework for corporations to report climate change risks and opportunities, carbon footprints, and carbon reduction strategies and their implications for shareholder value. By aligning their basic requests for information, CDSB members aim to go beyond best practice and to make it standard practice for companies to report climate change-related information in their Annual Reports and for this to extend into the related analysis by the investment research community.

CDSB was convened at the 2007 Annual Meeting of the World Economic Forum in response to increasing calls for action from corporations and financial markets to address global warming and the associated growth of climate change information collection and reporting initiatives. CDSB does not aim to introduce a new initiative or climate change reporting standard. Rather, its mission to progress, support and align existing climate change reporting initiatives, to provide a focus for and forum for dialogue about their work so as to harmonise and enhance best practices towards the eventual publication of a single reporting framework.

CDSB will progress its work in two phases:

In phase 1 CDSB advocates disclosure by companies in their audited Annual Reports of material climate change-related information under the four categories described below (physical and regulatory risks, climate change strategy and actual greenhouse gas emissions). During phase 1, detailed technical research and pilot work will be conducted to refine and clarify further the reporting categories.

Phase 2 will commence when CDSB’s technical research and pilot work is sufficiently advanced to publish a draft climate change-related reporting framework together with guidance and best practice examples. In phase 2 reporting principles will be more formally tested and refined further towards the publication of a generally-accepted international framework on climate change-related reporting to be used in the compilation of Annual Reports.

Overview of CDSB’s work
CDSB aims to advance its mission through the following strategies:

Collaboration and expansion - CDSB plans to collaborate with a wide range of stakeholders to bring together technical experts, expand the geographical reach of the project and invite representation commensurate with the task of creating a robust framework for climate change reporting.

Awareness raising - CDSB will publish core materials about its work through the websites and distribution channels of its members.

Technical - CDSB will commission a technical report that examines existing reporting trends, practices for measurement of emissions, issues associated with operational and organisational reporting boundaries, national practices, sectoral differences and so on. Having reviewed and synthesized existing practices, measurement rules and general reporting issues, the technical report will make recommendations on climate change reporting and will be published as a consultation document.

Pilot work and consultation - In order to test the framework and its practical applicability, CDSB plans to work with “early adopters” and “pilot” groups at various stages in the development of the framework. In addition, extensive consultation will be invited in response to CDSB’s technical work.

CDSB’s Constitution and Membership

CDSB is formed of two bodies :

The Board is responsible for leading and managing the work and mission of CDSB through sub-committees, strategic partnerships and collaboration with a wide range of stakeholders. On appointment Board members commit to advocate and advance the work of CDSB.

The Advisory Committee is responsible for guiding the Board’s work, developing its content and providing thought leadership as well as advocating CDSB’s work.

Chair
Richard Samans of the World Economic Forum is the Chairman of CDSB. A new Chairperson will be appointed to this office annually.

Secretariat
The Carbon Disclosure Project has been appointed Secretariat to CDSB.

Board members
California Climate Action Registry
Carbon Disclosure Project
CERES
The Climate Group
International Emissions Trading Association
World Economic Forum
World Resources Institute

Advisory Committee members
As at December 2007, the Advisory Committee is made up of the following organisations: Alcan, American International Group, Association of Chartered Certified Accountants, BP, Capital Group, Carbon Trust, Chartered Accountants of Canada, Clifford Chance, Cravath, Swaine & Moore LLP, Deloitte, Duke Energy, Ernst & Young, Greenhouse Gas Management Institute, Institute of Chartered Accountants of England and Wales, Institutional Investors Group on Climate Change, JP Morgan Chase, KPMG, PricewaterhouseCoopers, Marsh McLennan, Royal Dutch Shell, SUN Group, Swiss Re, The Climate Registry, Tokyo Electric Power Company (TEPCO).

The Advisory Board also includes representatives from the UK Department for Environment, Food and Rural Affairs, the California State Assembly, the United Nations Environment Program and the United Nations Foundation.

CDSB’s expansion
CDSB is anxious to collaborate with as wide a range of stakeholders as is appropriate for the creation of a robust climate change reporting framework whilst maintaining the Board and the Advisory Committee at a significant but manageable size. Generally, admission to the Board is for organisations that have significant involvement in operating a greenhouse gas registry and/or development of climate reporting policy or standards. Advisory Committee Members will be from the industrial, financial, accountancy and high emitting industries as well as from government.

CDSB’s reporting recommendations
Pending completion of the technical work it is commissioning (see below), CDSB’s recommendation is that companies should disclose in audited annual reports material climate change-related information under the four categories detailed below. Greenhouse Gas Emissions – including:

Total direct and indirect greenhouse gas emissions.

Estimated future direct and indirect emissions of greenhouse gases.

Details of GHG emissions reduction programs the company has introduced together with an analysis of the company’s performance against reduction targets.

Physical risks and opportunities
A general, qualitative overview of the types of physical impacts that climate change could have on the company’s business and operations including, where possible, its supply chain.

Regulatory risks and opportunities An analysis of the material legal and financial effects that current and prospective climate related-regulation may have on the company’s business and operations.

Strategic analysis – including:

A statement of the company’s position on climate change, its responsibility to address climate change and its engagement with governments and advocacy organisations to influence climate change policy.

An explanation of all significant actions the company is taking to minimise risks and maximise opportunities associated with climate change.

A description of corporate governance actions taken to address climate change, including the involvement of the company’s Board.

Technical review
In order to provide a firm foundation for its work, CDSB has agreed to commission a technical report that will examine the main climate reporting regimes, initiatives and methodologies currently in use. Report writers will be invited to:

identify from their findings examples of best practice for incorporation into the framework, and

make recommendations on reporting standards to be included in the framework, and

suggest requirements for audit or validation of reported data.

The Board has appointed a technical sub-committee to manage this work comprising CCAR, CDP and WRI.

Best practice examples and recommendations for climate reporting that emerge from the report commissioned by CDSB will be published for wide consultation. The results of the consultation will be published and reflected in the first draft framework.

Timescales
In terms of timing, CDSB hopes to be able to produce best practice examples and working hypotheses/draft recommendations by 31 March 2008. Thereafter recommendations will be published in a consultation document by 30 September 2008. Assuming that the consultation period ends on 31 March 2009, CDSB hopes to be able to publish a first draft framework by 30 September 2009.

Early adopters and pilot work
CDSB will consult with Advisory Committee members to identify organisations willing to put the framework (based on the preliminary recommendations in the first instance) into operation at an early stage. Early adopters will commit to share their reporting experiences and suggestions with the Board and other Advisory Committee members. A pilot group will be appointed to test recommendations emerging from CDSB’s technical work.

Planning and long term aims
CDSB is at the beginning of a mission that needs to be advanced as urgently as possible in view of the widespread concern about climate change. Given this urgency, CDSB will produce recommendations, a draft framework and consultations as the project progresses, rather than waiting for the final framework to evolve. During this process, CDSB will be guided by its long term plans to align, as far as possible, climate change reporting with other reporting requirements (accounting, compliance, listing and legal) and so enhance consistency and minimise administrative burdens for reporting entities, whilst eliciting through the framework meaningful information for stakeholders.

Who should I contact for more information?
Please address your queries to:
Lois Guthrie,
Technical Director,
Carbon Disclosure Project
lois@cdproject.net
+44 7740 988381

Brindusa Fidanza,
Project Manager, the World Economic Forum:
brindusa.fidanza@weforum.org
41 22 869 1441