Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental performance
• Social performance
• Economic performance

Climate Goals & Targets

Environmental Challenges

• Lack of comparable information across sectors and even within sectors for benchmarking.
• Questionnaire overload due to multiple benchmarking organizations and lack of standard reporting format.
• Inconclusive evidence regarding the performance of socially responsible investment.
• Uncertainty regarding accounting for emissions trading and related assets/liabilities.
• Difficulties in measuring national and global sustainability.
• Lack of established performance indicators for environmental and social areas.
• Difficulties in measuring the total cost of production, including external costs.
• Concerns about the paucity of suitable reporting criteria for sustainability assurance.

Mitigation Strategies

• Exploring key underlying issues in business reporting and making practical proposals.
• Developing a generally accepted framework for sustainability accounting and reporting.
• Working with other experts and providing specific guidance.
• Developing a code of best practice for stakeholder engagement.
• Improving disclosure and transparency of companies’ practices and rating agencies’ methodology.
• Developing standardized screening methods for SRI.
• Developing international standards for GHG accounting and reporting.
• Developing a handbook to provide practical guidance on sustainability reporting by SMEs.

Supply Chain Management

Responsible Procurement

• Codes of practice for suppliers to improve conditions for workers and environmental standards.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001, EMAS

Environmental Metrics

ESG Focus Areas

• Sustainability Reporting

Climate Goals & Targets

Environmental Challenges

• Lack of agreed local or global standards, metrics, benchmarks, objective external assessment, and audit/assurance in sustainability reporting.
• Perception that sustainability reports are primarily public relations exercises ('greenwash').
• Limited understanding, acceptance, and value placed on sustainability reporting in assessing overall organizational performance.
• Lack of relationship between measures in sustainability reporting and actual environmental, social, or financial performance.
• Lack of reliability and objectivity in sustainability reporting, leading to bias and skepticism.
• Lack of comparability and transparency in sustainability reporting.
• Lack of audit/assurance for sustainability reports, hindering credibility.
• Lack of integration between sustainability reporting and financial reporting.
• Most current reporting does not report on sustainability explicitly or at all.

Mitigation Strategies

• Development of the Global Reporting Initiative (GRI) guidelines as a voluntary de facto global standard.
• Proposal for future research to address the challenges and improve sustainability reporting practices.
• Advocating for the inclusion of sustainability elements in financial reporting.
• Emphasis on the need for external assurance and improved transparency.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, ISO 14001, EMAS, Balanced Scorecard

Certifications: ISO 14001, EMAS

Third-party Assurance: AA1000 Assurance Standard, ISAE 3000

Environmental Metrics

ESG Focus Areas

• Sustainability
• Performance Reporting

Climate Goals & Targets

Environmental Challenges

• Material errors identified in publicly reported non-financial information.
• Risk of deliberate misstatement of non-financial information.
• Mismatch between data collected by systems and information required to be reported.
• Lack of alignment between systems and reporting requirements leading to sub-optimal decisions.

Mitigation Strategies

• Obtaining third-party assurance over non-financial information.
• Consultation with stakeholders to understand reporting requirements and identify potential issues.
• Development of robust non-financial reporting assurance frameworks.
• Incremental approach to developing assurance frameworks (e.g., starting with narrative reports and progressing to assurance reports).

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ISAE 3000

Environmental Metrics

ESG Focus Areas

• Sustainability Reporting
• Climate Change
• Social Justice
• Governance
• UN Sustainable Development Goals (SDGs)

Environmental Achievements

• Implementation of Greening Government Commitments (GGC) since 2011, focusing on GHG emissions, waste, water consumption, and sustainable procurement; addition of nature recovery and adaptation reporting commitments.

Social Achievements

• Not disclosed

Governance Achievements

• Financial Reporting Advisory Board (FRAB) approval of TCFD-aligned disclosures in the UK public sector.

Climate Goals & Targets

Environmental Challenges

• Lack of a clear thread through annual reports regarding climate-related risks and opportunities; overemphasis on climate mitigation to the detriment of climate adaptation; need for wider sustainability reporting beyond climate change, encompassing SDGs and social justice.

Mitigation Strategies

• Leveraging existing private sector standards (ISSB, GRI) and adapting them for the public sector; developing public sector-specific guidance on environmental materiality; collaboration with relevant organizations to ensure timely and high-quality standards.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Procurement of sustainable products

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: TCFD, ISSB, GRI, UN SDGs

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

ICAEW’s vision is that ICAEW Chartered Accountants enable a world of sustainable economies and supporting this vision is the key strategic theme of helping achieve the UN Sustainability Development Goals (SDGs).

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Sustainability reporting
• Climate-related disclosures
• Financial materiality
• Double materiality
• Stakeholder engagement

Climate Goals & Targets

Environmental Challenges

• Lack of consensus on the purpose and audience of sustainability reporting
• Conflicting approaches and views on materiality among standard-setters
• Disclosure overload
• Lack of interoperability between different sustainability reporting standards
• Pressure to produce additional standards quickly, hindering implementation
• Concerns about the quality of due process in the development of some standards
• Political pressures and stakeholder interests influencing standard-setting
• Challenges in assurance and enforcement of sustainability standards

Mitigation Strategies

• Recommendations for clearer articulation of the role of ISSB standards relative to others
• Recommendation for a detailed ISSB roadmap
• Recommendation for a conceptual framework designed for sustainability standard-setting
• Recommendations for improved due process, including enhanced post-implementation review
• Recommendations for ensuring independence and appropriate expertise on standard-setting boards
• Recommendations for effective stakeholder engagement and navigating political pressures
• Recommendations for avoiding disclosure overload and improving cost-benefit assessments
• Recommendations for improving interoperability between standards
• Recommendation for prioritizing implementation of existing standards
• Recommendations for robust assurance and enforcement mechanisms

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS Sustainability Disclosure Standards (IFRS S1 and IFRS S2), Global Reporting Initiative (GRI), European Sustainability Reporting Standards (ESRS), Task Force on Climate-related Financial Disclosures (TCFD), Greenhouse Gas (GHG) Protocol

UN Sustainable Development Goals

• Goal 13 (Climate Action)

Sustainability reporting contributes to achieving the UN's Sustainable Development Goals by promoting transparency and accountability in relation to environmental, social, and governance matters.

Environmental Metrics

ESG Focus Areas

• Climate Change

Climate Goals & Targets

Environmental Challenges

• Inconsistency in GHG emissions reporting across different government frameworks (GGC and SRG), leading to difficulties in data aggregation and comparability.
• Lack of clarity on disclosure requirements when climate change is not considered a principal risk for a public body.

Mitigation Strategies

• Recommending alignment of scope, boundaries, and measurement techniques for GHG emissions reporting across government frameworks.
• Suggesting clearer indication in the exposure draft of base-level information that all entities should provide, including when climate change is not a principal risk.
• Proposing that HMT classify climate risk as an emerging risk affecting all departments to ensure consistent reporting within familiar guidance.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD, GHG Protocol