With mandatory greenhouse gas (GHG) emission disclosures on the horizon, we held a Climate Week NYC event to demystify GHG reporting and help accounting and finance professionals take immediate steps to ensure their organization’s data is in order and ready to report robust information when the new standards and rules go into effect.
Panelists agreed that accounting and finance professionals have a critical role in enhancing GHG emissions data collection and reporting and connecting financial and emissions data, processes and systems to reduce cost of compliance and improve the decision usefulness of information.
From a finance perspective, we heard from Jane Thostrup Jagd, Director of Net Zero Finance at WMBC and Former Lead Compliance Officer at Maersk and Ørsted.
“I do understand all the financial people who may start by thinking, greenhouse gas reporting, I don't know anything about that. But in reality, you have all the skills to do this well. Because in reality, we can reuse a lot of the information that is already in the bookkeeping or accounting system, and we can reuse a lot of our skills on making good processes, making sure we have evidence for the data that we are to report.”
We also heard from Eugene Brink, Vice President, Finance Transformation, GE Vernova who discussed GE Vernova’s goals, the processes and systems his team uses to capture non-financial data, and his personal journey.
“Everything Jane said I couldn't agree with more. And in fact, we spoke several months ago, and I stepped out of [thinking I did not know enough to start GHG reporting]."
“Finance teams are going to be a key component driving automation where you can. At the end of the day, it needs to have the right little precision and controls because investors, supplies and customers are ultimately going to rely on the information."
Elizabeth Seeger, Board Member of International Sustainability Standards Board (ISSB) brought details to the table on the ISSB’s inaugural standards—IFRS S1 and IFRS S2 which create a common language for disclosing the effect of climate-related risks and opportunities on a company’s prospects.
“It’s not just greenhouse gas emissions data, that's an important aspect of it, but also really companies’ strategy, governance and risk management among other things as well.”
Audit and Assurance Perspective
Mike Harris, ESG Services Leader at PwC Canada and Chair of the Sustainability Assurance Committee at the Auditing and Assurance Standards Board (AASB) talked about the importance of auditing and assuring sustainability information.
“We did a recent investor survey and found that 89% of the investors reported that they feel ESG reports contains some greenwashing. It's probably not a surprise to a lot of people here. So the need for assurance and investor grade reporting is key to address that.”
“Many companies jump into [technology] looking for a bit of a silver bullet. You can't do this manually for a long time, but at the same time if you haven't done these other steps [such as IFAC’s GHG Roadmap Guidance or Guidance from PwC] in advance, you can get into some trouble.”
Jimmy Greer, ESG Specialist at Datamaran, developers of a data analytics platform that identifies and monitors risks and trends, shared research on what S&P 500 companies are disclosing and changes in the interconnectivity of information.
“As the market place matures, we're starting to see these two halves of this sphere come together, where management information that is decision-useful is coming together and becoming much more closely aligned with the disclosure piece.”
All panelists came back to the need for interconnectivity and integration of teams and climate-related and financial information.
To hear their discussion in detail, watch the recording on YouTube and explore the resources below.
Enhancing Greenhouse Gas (GHG) ReportingMay 30, 2023
Building Trust and Confidence through the COSO Internal Control—Integrated Framework | COSOFebruary 23, 2024
Achieving effective internal control over sustainability reporting | AICPA & CIMAFebruary 23, 2024
ISSB issues inaugural sustainability standards | IFRS FoundationFebruary 23, 2024
IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information: Supporting Materials | IFRS FoundationFebruary 23, 2024
IFRS S2 Climate-related Disclosures: Supporting Materials | IFRS FoundationFebruary 23, 2024
IFRS Sustainability Disclosure Standards ‒ Guidance, insights and where to begin | PwCFebruary 23, 2024
Practical guidance on preparing for the ISSB’s sustainability disclosure standards | Chartered Accountants ANZFebruary 23, 2024