Four sustainability reporting trends

14.02.2013

The Carbon Disclosure Project (CDP) has become much more than a carbon disclosure project, now combining climate, water and forest footprints into one holistic natural capital platform, the world's largest and most comprehensive natural capital disclosure system. The 2012 Forest Footprint Annual Review was recently published, the product of the 2012 merger between the FFD (Forest Footprint Disclosure Project) and the CDP.

Nigel Topping is the Chief Innovation Officer of the CSP and he will be speaking at the Smarter Sustainability Conference on Tuesday 5th February in London on the "Impact of natural capital accounting on sustainability reporting - experiences learnt from climate change reporting". Nigel architected CDP's ambitious innovation program, including extending into Supply Chain, Water and Cities and is responsible for CDP's technical roadmap, IT systems, major partnerships with Accenture, SAP, Microsoft and Bloomberg, is a board member/advisor to CDSB, SASB, CBSB and sits on the external sustainability panels of SAP and P&G.

What does the Chief Innovation Officer of the CDP actually do? According to Nigel, "Innovation is the hard work of implementing ideas...not the cool work of coming up with ideas. We don't have a problem with ideas - we always have far more ideas that we have the capacity to implement at any given time. What's no less important is the ability to implement successfully those ideas we want to progress." Nigel has had an interesting background. He started off in Manchester, UK, in manufacturing and was running his first factory in his early 20s. He then spent time in Greenland and Patagonia on expeditions, seeing at first hand the evidence of climate change. Joining the CDP around six years ago, he was driven by a real passion to use the power and creativity of business to address huge global challenges. He has put this passion to good use at the CDP, driving several important programs over the past few years.

One of the things that will make Sustainability Reporting smarter, according to Nigel, is "not having 75 different standards". Convergence is definitely the name of the game, and "we are seeing three forces at play: the extension of the scope of climate change to become a more holistic approach to sustainability - more things are becoming more material; a deepening of understanding that is sector specific - you can't easily compare a utility company with a general retailer; and the emergence of technologies which help classify and process data in a way which will enable it to be used by investors and others (xbrl taxonomy)." Nigel has encouraged partnerships with the CDP to get everyone on board, and the CDP has been engaged in extensive training to help companies work towards clear standards, increase their capability to collect data and promote assurance of data.

I asked Nigel about the issue of data quality and whether this is of concern, especially given recent issues raised about false claims in Sustainability Reports. Can the CDP be such a great holistic platform without being confident that the data that is disclosed is accurate? Nigel said: "Quality of data is a global issue. There is a reciprocal journey between the provision of data and the use of data. The more people use the data, the more issues are found and get fixed. We have been of the view that it important to get everybody on the train, which is why we have invested significantly in training and educating. We have tried to push assurance, and last year, the assurance level among the global 500 increased by some 40%. We have encouraged this through the CDP by offering higher points for assurance. There are many debates and issues about assurance, not everyone applies assurance to the same standard etc. But the experience is that getting on the train and starting to disclose inevitably supports improvements in the data quality over time."

Nigel summarizes with four key influences which will contribute to the evolution of sustainability reporting.

• Convergence - of standards and approaches.
• Holistic reporting - it's all interconnected.
• Sector specificity - ensuring that disclosures are aligned with sector expectations and impacts
• Reporting formats - which need to be tailored to different audiences including investors.

Disagree? Agree? Want to know more? Come and hear Nigel and have the opportunity to engage with him in London on 5th February at the second annual Smarter Sustainability Reporting Conference.