What are the challenges and opportunities of managing the impact of company processes on climate? This was the focus of the discussion between companies and investors at the technical workshop “Managing corporate climate-related impact”, co-hosted by CSR Europe and the European Investment Bank (EIB).
Companies and investors gathered on 13th November, in Paris, to join the technical workshop on “Managing corporate climate-related impact: The role for internal carbon pricing and external disclosure”. The event, co-hosted by CSR Europe and the European Investment Bank (EIB) tackled the challenges and opportunities of managing the impact of company processes on climate. Here two main takeaways:
- There are gaps between company practices and financial actor expectations.
As expectations increase in line with the Paris Agreement and the EU’s Sustainable Finance Action Plan, financial actors are requesting and seeking to understand the corporate impact on climate and how they manage risks as well as opportunities. However, disclosing information is a big challenge for many companies. Why? Because of the complexity of business models and value chains, as well as the high number of reporting frameworks companies can choose from.
Companies and investors need to understand the double materiality and take a much more serious approach to their materiality with a strong link to their business model. The financial sector underlined the need for a clear link between finance and climate management of companies. This, in turn, requires a more medium or even long-term forward planning disclosure of companies. How can we understand the ambitions and underlying efforts and financial investments to transition to climate-neutral activities?
- Internal carbon pricing can be a tool for corporate decision making.
To reach the goals of the Paris agreement, companies must manage their impact and make the right decisions. Setting an internal price on carbon is mandatory for some and is a voluntary choice for others. In both cases, however, internal carbon pricing represents a tool that companies can use to support management decisions, create debate, manage risks, find new business opportunities, demonstrate climate leadership, or drive behavioural change within companies, and last but not least, drive impact.
The Next Steps
The event was the first of a series of technical workshops CSR Europe and the EIB will organise to focus on environmental, social and governance (ESG) topics that are equally relevant for the corporate and the financial sector. In 2020, CSR Europe and EIB will focus on :
- Big data tools for assessing ESG risks
- Assessing biodiversity impact
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