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Supply Chain
The Climate Disclosure Standards Board (CDSB)
Frequently Asked Questions
What is the Climate Disclosure Standards Board (CDSB)?
The CDSB is a consortium of seven business and environmental organisations first convened at the 2007 Annual Meeting of the World Economic Forum. CDSB’s objective is to advocate and publish a generally accepted framework for corporate reporting on climate change. The purpose of the framework is to set an international standard according to which corporations may disclose within mainstream, audited reports the risks and opportunities presented to them by climate change, their greenhouse gas emissions, carbon reduction strategies and the implications for shareholder value of climate change.
Who are the consortium members?
The California Climate Action Registry, the Carbon Disclosure Project, CERES, The Climate Group, International Emissions Trading Association, World Economic Forum and the World Resources Institute.
Is CDSB creating new rules?
CDSB does not aim to introduce a new initiative or climate reporting standard. Rather, it aims to support, harmonise and strengthen existing climate change reporting initiatives and to bring together and enhance best practices in the form of a single, consistent climate reporting framework that can be used for disclosure through mainstream and statutory filings.
There are already registries and protocols through which companies report their climate risks – what is different about CDSB? Why does the CDSB really matter to business?
A great deal of progress has been made in climate changerelated disclosure amongst corporations and their boards and shareholders and much of this has been achieved through the work of CDSB members including the California Climate Action Registry and the Carbon Disclosure Project. CDSB does not intend to supersede or change the work that is already progressing through these and other organisations. Rather, it provides a focal point for the further development of climate change reporting. CDSB recognises that where developments originate from different sources they can appear fragmented. The Board therefore aims to identify where there are consistencies between and opportunities for harmonising regimes as well as maximising the effect of best practices through a single unified framework on climate change reporting. CDSB aims to enhance consensus whilst supporting the development of climate change reporting through existing initiatives.
What are the advantages and benefits of this initiative?
CDSB is engaging with a wide range of stakeholders to ensure that the formulation of the generallyaccepted framework for climate change reporting takes account of all of their needs; this will ensure that the eventual framework is robust.
The Chairman of the Board of CDSB is Rick Samans of WEF. The Board is supported by an Advisory Committee of leading industrial, financial services and accounting firms as well as a number of distinguished governmental and nongovernmental specialists. From time to time CDSB appoints specialist subcommittees to inform and guide its work. The Carbon Disclosure Project acts as secretariat to CDSB.
Who is on the Advisory Committee?
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.
What sort of information does CDSB anticipate that companies will be required to disclose under the framework for climate related reporting?
Pending completion of the technical work it is commissioning (see below), CDSB’s recommendation is that companies should disclose material climate changerelated information in their mainstream audited filings under the four categories detailed below.
Greenhouse Gas Emissions – including:
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 climaterelated regulation may have on the company’s business and operations.
Strategic analysis – including:
What process will the CDSB follow in order to progress the generally accepted framework for climate reporting?
CDSB plans to advance its work 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 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 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.
What will my organisation be required to do and should we continue to report climaterelated information through existing initiatives?
With the exception of reporting under the EU Emissions Trading Scheme, climate changerelated disclosure has been predominantly voluntary to date through initiatives run by organisations including the California Climate Action Registry, the Carbon Disclosure Project, the World Economic Forum and others. Significant advances have been and continue to be made through voluntary reporting initiatives.
CDSB’s objective is to advance climaterelated disclosure by bringing it also into mainstream reporting, that is, in audited annual reports and/or statutory filings. To the extent that it is material, CDSB therefore advocates the reporting of climate changerelated information through mainstream reporting as well as through existing voluntary initiatives.
CDSB’s eventual aim is to align requests for information about climate change reporting, whether through voluntary or statutory reporting, into a single framework so as to minimise reporting burdens.
Pending completion of its technical work towards the formulation of that framework (see above), CDSB advocates climate changerelated reporting in mainstream annual reports and statutory filings according to the four categories listed above on a basis consistent with the WBCSD/WRI Greenhouse Gas Protocol, as do the majority of voluntary reporting initiatives. As the Greenhouse Gas Protocol forms the common basis for emissions reporting and GHG target setting for both voluntary initiatives and the four disclosure categories listed above, companies should find that participation in voluntary initiatives informs the process by which they identify material climate related information for their mainstream and statutory filings.
Are there costs involved in climaterelated reporting as advocated by CDSB?
There are no specific external costs associated with reporting as advocated by CDSB, although there may be some internal costs relating to information collection and data quality management.
When is the framework likely to be published?
CDSB hopes that best practice guidance and draft recommendations on the Framework will be published as a consultation document in the third quarter of 2008 and comments will be invited from a wide range of stakeholders. Having reviewed responses to the consultation document, CDSB hopes to publish best practice guidelines in mid to late 2009. In the meantime, CDSB will be working actively with stakeholders and pilot groups to test interim recommendations.
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
or
Brindusa Fidanza,Project Manager, the World Economic Forum:
brindusa.fidanza@weforum.org
41 22 869 1441