Wasted effort — that’s the kind way to characterize the frustration felt in filling out a variety of disparate forms all requesting basically the same information. Most of us have run into situations where slightly different requirements or definitions caused added work that easily could have been avoided if only the groups requesting the details had used a common basis.
Our personal hassles pale against the problem faced by chemical makers and other manufacturers involved in detailed reporting.
On one front, climate-related disclosures, industry can expect some relief, at least from some non-governmental organizations (NGOs). The importance of providing such information to these groups continues to grow as more and more investors and financial institutions as well as society as a whole demand details.
Last November, the Corporate Reporting Dialogue (CRD), launched the Better Alignment Project. This two-year initiative brings together key NGOs compiling such information — the CDP (formerly the Carbon Disclosure Project), the Climate Disclosure Standards Board, the Global Reporting Initiative, the International Integrated Reporting Council, and the Sustainability Accounting Standards Board — with the goal of improving “the coherence, consistency and comparability of the Participants’ frameworks and standards.”
Efforts during the first year focused on climate-change reporting and involved mapping the alignment between each organization’s requirements and the recommended disclosures and illustrative example metrics of the Task Force on Climate-related Financial Disclosures (TCFD), a group founded by billionaire Michael Bloomberg that includes both industrial and financial firms.
In late September, CRD released a report on the project’s progress at the World Economic Forum’s Sustainable Development Impact Summit, held in New York City during the same week as the United Nation’s Secretary-General’s Climate Action Summit there. You can download a copy of the report.
The report notes that the mapping showed strong alignment between each group’s frameworks and standards and those of the TCFD as well as between each other. It adds that 80% of the TCFD’s 50 metrics are “fully or reasonably covered” by the groups’ indicators.
However, the report also reveals that online surveys and roundtables conducted as part of the project clearly indicated that stakeholders struggle to understand how the various frameworks and standards fit together to support efficient and effective disclosures. To help address this, the report includes a section on frequently asked questions for using the frameworks and standards.
The report mentions that this disconnect between the mapping and stakeholders’ perceptions has pinpointed three areas the project should address during its second year:
• Developing a taxonomy to guide users on the meaning of different terminologies and methods employed and their commonalities and interrelationships;
• Building an online, interactive tool that enables users to understand how to effectively utilize the various frameworks and standards individually or together for different reporting purposes; and
• Holding a forum to foster further exchange of developments, ideas and plans between and across technical teams to promote greater long-term alignment.
We all should applaud this effort. It promises to ease the burden of preparing effective and consistent disclosures and, thus, hopefully will spur even more chemical makers to release such important information.
MARK ROSENZWEIG is Chemical Processing's Editor in Chief. You can email him at email@example.com