The finances of environmental disclosure and why HNI is getting onboard.
Over the past few decades, corporate annual reports have added a new section to their table of contents, and we’ll give you a hint—it’s not furniture. As of 2016, 40 percent of S&P Global 100 companies have included the topic of climate change in their financial reporting.1
But the reporting process is not that easy. Investors push for environmental impact disclosure not just for the betterment of the planet—they want to see opportunities for improvement in financial reports. The challenge lies in the fact that climate impacts are not always so easily predictable.
The actual cost or value forecasted from a risk is still a new calculation for most. An example of a climate-related risk might be “increased severity of extreme weather such as hurricanes or floods,” but to calculate the potential financial impact—such as supply chain interruption or demand destruction—depends entirely on the specifics of the weather event.
“At the heart of this is working out how we can dematerialize economic growth. Our economies will continue to grow and develop, but they’re going to have to reduce resource consumption at the same time. That’s going to take wit and skill and wisdom, energy, and entrepreneurial zeal. And I know we can do it.”
– Paul Dickinson, CDP Executive Chairman and Co-Founder
The Carbon Disclosure Project (CDP) started in 2000 to solve a new need; companies were learning to look at climate-related risks with a data-driven mindset, but the challenge was finding consistency and quality in their disclosures. So after 18 years of building their global disclosure system focused on consistent quality reporting, the CDP successfully “built the most comprehensive collection of self-reported data in the world.” 2
An international non-profit, the CDP reports currently account for one-fifth of global greenhouse gas emissions. Its framework for improvements is simple: measure, disclose, and manage environmental risks and opportunities. And its goal is to help companies take meaningful action to confront climate change.
CDP Executive Chairman and Co-Founder, Paul Dickinson, speaks passionately about the framework and services supporting the mission, such as peer networking and sustainable decision-making.“At the heart of this is working out how we can dematerialize economic growth. Our economies will continue to grow and develop, but they’re going to have to reduce resource consumption at the same time. That’s going to take wit and skill and wisdom, energy, and entrepreneurial zeal. And I know we can do it.”
HNI US furniture companies will be taking part in the self-reported CDP submission this month. As a family of brands, HNI sustainability leaders are supportive of CDP’s mission to make improvements and manage risks for all.
“Participation in the CDP requires us to collect and understand greenhouse gas data and impacts from our supply chain, manufacturing, and distribution processes,” says Roy Green, Director of Stewardship and Sustainability for Gunlocke. “Answering the extensive and thorough questionnaire puts a spotlight on how climate-related risk might impact our environmental risk management strategy now and in the years to come.”
Sources:
1. Ahmad, Fatima M. “Beyond the Horizon: Corporate Reporting on Climate Change.” Center for Climate and Energy Solutions. October 24, 2017. Accessed May 16, 2018. http://www.c2es.org/document/beyond-the-horizon-corporate-reporting-on-climate-change/.
2. “About Us – CDP.” New Report Shows Just 100 Companies Are Source of over 70% of Emissions – CDP. Accessed May 16, 2018. https://www.cdp.net/en/info/about-us.