Accounting for carbon: the true cost of doing business

7 October 2014

New regulations in the UK require all listed companies to report their greenhouse gas emissions alongside their financial reporting. The UK is the first country in the world to require this by law, which will affect more than 1000 companies.

The law makes an important connection between the environmental impacts of corporate operations and financial wellbeing, and will allow potential investors and shareholders to evaluate a company’s true financial standing including the long-term cost of carbon.

Through mandated reporting alone, the law is anticipated to prevent an equivalent of 4 million tons of carbon dioxide by 2021 — with the understanding that ultimately, the pressure to reduce emissions will come from investors and consumers, as the carbon footprint data for all major companies becomes publicly available.

One of the most valuable impacts of the new legislation is that companies will no longer be able to hide the true cost of generating profits. The costs of pollution and climate change, which have previously been pushed onto the public, will now be unavoidably associated with a company’s financials.

Deputy Prime Minister Nick Clegg noted this point as critical reasoning behind the mandated reporting: “counting your business costs while hiding your greenhouse gas emissions is a false economy”.

Here in New Zealand, the Sustainable Business Network has surveyed more than 1400 Kiwis to find out what they want from their KiwiSaver funds. We’ve got have some strong evidence of what New Zealanders want, and some ideas of how we can to start to create change in the NZ investment industry.

Join us at our Sustainable Investment breakfast on 15 October and find out what your role can be in adding meaningful value to investment decisions for Kiwis. We will be presenting the results from our survey and the accompanying report, Investing in our Future: creating better KiwiSaver funds.

Rodger Spiller, managing director of Money Matters and the Responsible Investment Association of Australasia will also present on the global sustainable investment picture and what New Zealand’s role in this could be.

Click here to find out more about the event.

Information for this story came from an article in Sustainable Brands by Gina Angiolillo on Accounting for Carbon: New UK regulations connect carbon to finance. Click here to read the full article.