– Liz Logan is a partner in PricewaterhouseCoopers’ Sustainability and Climate Change practice and leads the company’s efforts as adviser to the Carbon Disclosure Project. Doug Kangos is a PwC partner who focuses on assisting companies respond to demands of greenhouse gas emissions and sustainability reporting. Any views expressed here are their own. –
Carbon reporting by U.S.-based companies today has broad similarities to financial reporting before the enactment of the Securities and Exchange Act of 1934. Just as market forces and regulation evolved then, so too now are we seeing a similar trend.
We expect that within this decade, more companies will regard carbon as significant and will develop and implement increasingly sophisticated and accurate programs to track, manage and report emissions data. And to the extent that carbon emissions are monetized through, for example, a cap-and-trade system, they will become subject to conventional accounting and reporting, with their demands for high levels of accuracy, reliability and timeliness.
Reporting demands can come from many sources. Procter & Gamble, for example, recently joined Wal-Mart Stores and others in initiating a sustainability scorecard program for its suppliers. While the substance of these programs varies with the nature of each business, the trend is undeniable and serves as a springboard for other manufacturers and retailers to follow.
Based on these early programs, companies should prepare themselves for more data requests in the near term from major customers.