The data says they aren’t, and this has many in the occupational health and safety profession concerned.

Corporate Knights Capital, in its recent report “Measuring Sustainability Disclosure,” analyzed all seven so-called first-generation sustainability indicators and found that only 11 per cent of the world’s 4,609 largest companies disclosed their worker injury rate in 2012.

It was the lowest disclosure rate of all seven indicators. By comparison, 39 per cent of companies disclosed their greenhouse-gas emissions and 59 per cent reported pay equity data.

For some industries, such as financial services, the low disclosure rate arguably makes sense. For example, only 2 per cent of the 382 largest banks reported workplace injury and fatality numbers in 2012. Of the world’s 156 biggest insurance companies, 1 per cent reported fatality figures and 3 per cent disclosed injuries.

Industries related to manufacturing, construction and other higher-risk activities are better at reporting, but have a long way to go. Of 369 large energy companies, only 14 per cent disclosed workplace deaths while 17 per cent reported injuries. Automotive and capital goods companies didn’t do much better.

“Human resources have become one of the most important productive assets in many industries, so it is quite disturbing that only a minority of companies are reporting on safety metrics at the workplace,” said Michael Yow, lead analyst at Corporate Knights Capital. “That only 17 per cent of the world’s oil and gas companies are reporting on worker safety is quite alarming, given they represent one of the most hazardous industries out there.”

The best discloser was the materials industry, where 20 per cent of the 406 companies analyzed reported fatalities and 33 per cent reported injuries. Still far short of where industry needs to be on worker safety, experts say.

“It’s amazing how often safety is left out of the sustainability discussion,” said Jeff Thorne, a workplace safety consultant with Occupational Safety Group. “It’s still a newer concept, believe it or not, to include safety as a performance indicator.”

But as Tom Cecich, chair of the U.S.-based Center for Safety and Health Sustainability (CSHS) told Corporate Knights, “High profile, tragic global incidents have highlighted the need for better occupational health and safety transparency and reporting.”

(Disclosure: CSHS is co-sponsor of this Workplace Safety web series).

Questionable Data

Indeed, poor disclosure isn’t the only problem. The CSHS reviewed the corporate social responsibility, sustainability and annual reports from 100 companies that appeared on Corporate Knights’ 2011 Global 100 ranking.

In a report it released in February 2013, the CSHS revealed a “high variability in terms and definitions” used by companies that disclosed workplace safety metrics, making it difficult to compare company performance.

“Corporate transparency is not achieved simply by disclosing information,” according to the report. “The information disclosed must also be meaningful.”

Part of the problem, it concluded, was lack of clarity from sustainability reporting frameworks, most notably the widely used Global Reporting Initiative (GRI). For example, GRI only asks companies to provide information on “total workforce,” but it doesn’t define “worker,” leaving it open to interpretation. Does it include contract workers? Temporary workers? What about workers further down the supply chain?

The report also found that 15 different methods were used to define a “report-worthy injury” or incident and six different formulas were used to calculate an overall injury rate. Companies were either ignoring GRI guidelines or being confused by them. In other words, the guidelines appeared to be ineffective.

It’s no surprise that in 2012, when GRI began accepting public comment for its planned fourth-generation guidelines, the issue of occupational health and safety received the fourth-highest number of submissions. In response, the GRI decided to create a working group for workplace safety that would inform updated guidelines.

The goal was to improve clarity and transparency of workplace health and safety guidelines. Despite good intentions, not much has happened since. “As of October 2014 GRI has not started the workgroup due to funding issues,” said Cecich.

The main reason CSHS produced its 2013 report was to offer insight for the multi-industry stakeholders expected to sit on the working group. The report’s recommendations were clear:

• Standardize terms and definitions to eliminate confusion and create a consistency of reported data that allows apples-to-apples comparisons within sectors and across geographies;

• Encourage complete reporting of all leading indicators related to occupational health and safety, as well as reporting over multiple years to allow for internal and external stakeholders to gauge whether a company is improving or not;

• Expand coverage beyond just company staff to include temporary workers and subcontractors, as well as workers in the supply chain, all of them “growing and highly vulnerable segments of the global workforce.”

(This story is the fourth in a series of articles on workplace safety that will appear on corporateknights.com during October, in partnership with and with funding support from the Canadian Society of Safety Engineering and the Center for Safety and Health Sustainability. Visit our Workplace Safety landing page to follow the series.)

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The Montreal Carbon Pledge launched today at the PRI conference in Montreal, which will encourage institutional investors to measure and publicly disclose how much carbon is contained within their investment portfolios on an annual basis.

The pledge adds to existing measurement tools, reporting standards and low-carbon investment options that have created a “perfect storm” for building a low-carbon economy, says Toby Heaps, Chief Executive Office of Corporate Knights.

This comes only days after Ban Ki-Moon, Secretary General of the United Nations, called on the private sector at Tuesday’s Climate Summit in New York City to “redirect investment commensurate with the scale of the challenge,” including disclosing carbon asset exposure.

“Climate change is a risk to businesses and financial markets everywhere,” said Ki-moon on Tuesday. “It threatens to undermine financial resilience, and efforts to alleviate poverty and maintain sustained economic growth.”

While he said carbon pricing was a critical first step, it would be insufficient if not complemented by urgent direct action. And with over $75 trillion (U.S.) in investable assets, institutional investors play a leading role in the transition to a climate resilient economy.

That is why the Montreal Carbon Pledge is aiming to get commitments from portfolios worth $3 trillion before the United Nation climate meeting in Paris in December 2015.

The PRI – an international network of investors supported by the United Nations, which represents more than $45 trillion (U.S.) in assets under management – will manage the online portal where investors can endorse the Montreal Carbon Pledge, report the size of their portfolio’s carbon footprint and list their carbon-reduction targets.

These actions will not only help to mitigate the climate crisis, they also have the potential to generate new markets and new employment opportunities, as well as generate economic growth while meeting our social and environmental needs, said Ban Ki-moon on Tuesday. But, in order for this to happen, investors need to enter a new era of global cooperation, he said.

The Montreal Carbon Pledge will bring institutional investors together so that they can “translate climate talk into walk,” said Fiona Reynolds, Managing Director of the Principles for Responsible Investment in a statement.

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In a report released on Monday, the NHL urged anyone who cares about the future of the beloved sport to take action to stop climate change.

“As hockey fans, it is imperative that we take the time to understand these issues and make an effort to become strong environmental stewards. The future of our sport, and your local pond hockey game, depends on all of us,” said Mike Richter, a former U.S. goaltender and Hall of Famer, in the report.

And, as the great unifier, sport could take the politics out of the climate change discussion and focus it on the realities of what life could look like on a warmer planet—including one without hockey.

“Hockey is not political, it’s non-partisan. This is really a mainstream affirmation that we have a challenge that needs to be addressed by business…. Climate deniers can attack the Environmental Protection Agency, but they can’t attack the NHL,” says Allen Hershkowitz, a senior scientist at the Natural Resources Defense Council (NRDC) who has been working with the NHL over the last four years to develop their environmental protocol.

The NRDC is behind the “sports greening” movement, which started in 2004. The organization advises all professional sports leagues in North America to develop environmentally friendly protocols across their global supply chains, while educating millions of fans on how to take care of the environment.

The 2014 NHL Sustainability Report is the first environmental report to be released by a major sports league, and is uniquely frank about the risks climate change poses to the existence of the NHL, says the NRDC website.

The report cites a paper published by the Institute of Physics’ Environmental Research Letters in 2012 that confirms a hockey-lover’s worst fear: global warming has reduced the skating season in Canada by as much as 30 percent over the last 50 years.

A report released by the David Suzuki Foundation in 2009 called On Thin Ice: Winter Sports and Climate Change warned Canadians that climate change would wipe out most of the country’s winter sports culture if measures were not put in place to reduce carbon emissions.

To counteract these risks, the NHL has purchased renewable energy certification, carbon offsets and water restoration certificates. Combined with other efforts, the NHL says it has reduced its carbon emissions by more than 38 million pounds since 2012.

The NHL realizes that measuring energy use and carbon emissions is good business management, and the National Basketball Association and Major League Baseball will soon follow suit with similar reports, says Hershkowitz.

At the end of the day, political affiliation is not important to the leaders of professional sports leagues, he says.

“They understand that water freezes at 32 degrees…. In congress, things are negotiable, but when you’re operating an arena, you have to be precise,” he says.

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The goal is to have a common standard that will allow extractive companies to report how much they pay governments for access to their resources, regardless of what stock exchange they are listed on. Citizens should be able to use this information to track the profits from mines and oil wells and make sure their political representatives are spending resource revenues wisely.

But, writing a rule that will cover the three biggest stock exchanges for extractive companies—Toronto, New York and London—is not easy. And now that the E.U. Commission has opened consultations on what it will accept from companies reporting in other countries, the doors are open for further negotiation and, possibly, a less coherent standard.

The United States passed a law in 2010 as part of the Dodd Frank Wall Street Reform and Consumer Protection Act that will require oil, gas and mining companies to publicly disclose how much they pay governments for access to their resources.

The European Commission followed suit in 2013 with a law that will require all companies listed on European stock exchanges to disclose payments over €100,000 to all levels of governments, in all countries, for all projects, without exemptions by November 2015.

This is considered the gold standard for payment disclosure because it provides a level of granularity that citizens need if they are going to inquire about specific projects, says Colin Tinto, a campaigner at U.K.-based Global Witness, an organization that looks at the economic networks behind conflict and corruption.

Before the E.U. members could implement the law, the American Petroleum Institute challenged the U.S. rule in court, saying it would place an undue burden on the industry and affect competition. The U.S. District Court for the District of Columbia sent the rule back to the U.S. Securities and Exchange Commission with the understanding that it can either rewrite the rule or provide a better justification. The final rule is scheduled to come up for discussion some time before March 2015.

In the meantime, the Canadian government has begun working on its own payment transparency law to be implemented by April 2015. Natural Resources Canada (NRCan) has been working with provincial and territorial governments, industry, civil society and Aboriginal groups to design the law.

To make things easier on companies listed on multiple stock exchanges, the Canadian government is working with the U.S. and E.U. to align its law with the existing international standards and to ensure that there is a level playing field for companies operating domestically and abroad, says Jacinthe Perras, spokesperson for the NRCan.

But, some Canadian companies do not like the way the E.U. law has been written and Talisman Energy Inc., a Canadian oil and gas company, is calling for a different standard altogether.

“We do not believe that trying to draft Canadian rule so that they are ‘equivalent’ with the most severe set of rules currently proposed is of any service to Canadian companies,” the company says in its letter to NRCan.

Instead, Talisman is calling for anonymous country-by-country reporting with exemptions in countries where it is forbidden to reveal how much companies have paid governments.

The suggestion that Canada can pass a different rule and have it accepted in the E.U. is a misunderstanding of the law and would make it impossible to declare equivalency between the two reporting standards, says Tinto.

The Commission has yet to announce an official position on what it will require from companies that want to report in other countries.

“We have not taken a decision yet,” says Didier Millerot, spokesperson for the Commission. “We cannot say that if Canada allows for exemptions in its legislation that we won’t accept it. We have to look at the Canadian system as a whole…. This is also a political decision.”

A global transparency standard would allow for comparison and make it easier for citizens to access, use and interpret information, says Claire Woodside, Director of PWYP Canada, the global network of organizations pushing for transparency in the oil, gas and mining industries.

Any efforts to keep company names a secret or to make exemptions for certain countries will increase opportunities for the theft and mismanagement of revenues, which robs citizens of the economic benefits of natural resource wealth, she added.

Brent Anderson, Manager of External Relations at Talisman says, “the Canadian government should take care of its own citizens and companies first, and foreign citizens should be protected by their own countries’ laws.”

When assessing a third-country rule, Millerot says, the Commission would be looking to see whether the laws aim to achieve the same end result.

“It’s a transparency instrument that is there to empower citizens, stakeholders, NGOs and all those working towards more transparency and to encourage better use of natural resources by the countries that are sitting on them,” he added.

“That’s the first, indispensable step: that we understand each other and we know where we are going,” he says.

The post Enforcing transparency appeared first on Corporate Knights.

While investors and civil society say they welcome this new tool, the database is likely to remain incomplete as long as companies get to choose whether or not they want to share this information.

The platform, released on Monday, will allow users to search the 10-K filings of Russell 3000 companies from 2009 to the present, and to filter this information based on clean energy, renewables, weather risk, climate-related regulatory risks and opportunities.

Public companies in the U.S. are legally required to submit 10-K filings to the U.S. Securities and Exchange Commission (SEC) once a year, which covers their businesses, risks, financial conditions and audited financial statements.

At the request of over 100 institutional investors, representing $7 trillion, the SEC provided Interpretive Guidance in February 2010 on how companies could add climate-related risks and opportunities to their 10-K reports.

The SEC is the key U.S. government body that gives investors the information they need to make smarter financial decisions. But without an online tool, like the one created by Ceres, information related to climate change is difficult to track down.

“For markets to properly account for rising climate-related risks, investors need information on how companies recognize and manage those risks. This tool helps to make that enterprise easier for investors interested in understanding and managing climate risk,” said Julie Gorte, Senior Vice President for Sustainable Investing at Pax World in an online statement.

But, analysis of the Ceres tool shows that voluntary climate change reporting provides little incentive for companies to comply with reporting standards, as “only half of the Russell 3000 filers had something to say about climate change in their 2014 10-K filings,” and those filings “were highly variable in length and quality.”

A report by Ceres last February called Cool Response: SEC and Climate Change Reporting shows that more S&P 500 companies made climate-related disclosures after the SEC issued its guidance in 2010, but participation has slowed since then. And while the number of participating companies has increased overall, the disclosures were less specific in 2013 than they were in 2010, said the report.

Online tools are just as helpful for pointing out gaps in data as they are for analysis, said Michelle de Cordova, Direct of Corporate Engagement and Public Policy at NEI Ethical Funds. It’s an indication that there is a need for engagement to get companies to disclose what they’re already doing or to get them to start doing something, she said.

At a press event last week for the Risky Business Report, Henri Paulsen and Robert Rubin, former U.S. Treasury secretaries, called on the SEC to improve their climate disclosures and do a better job of getting companies to comply with the guidance it implemented. Rubin said companies should be reporting to the SEC assets that could be stranded, or unburnable, due to climate change.

Bloomberg LP released its own tool in November 2013 that helps investors assess how climate-related risks can affect the earnings of oil, coal and gas companies by estimating their ‘unburnable assets.’ This assessment is calculated regardless of the sustainability indicators, using a combination of current reserves and projected carbon prices. The Carbon Tracker Initiative describes unburnable carbon as fossil fuel energy sources which cannot be burnt if the world is to adhere to a given carbon budget.

Investors have a responsibility to pressure the SEC to a better job of enforcing environmental and social reporting because these issues are “critical to the long-term value of companies, ” said de Cordova.

“It’s important for investors to support the SEC to do better, because the SEC is supposed to be there to support us,” she said.

The post Managing climate risk appeared first on Corporate Knights.

The other much anticipated event that is the advent of integrated reporting (IR). Spearheaded in late 2011 by the International Integrated Reporting Council (IIRC), a coalition of the accountancy profession, investors, businesses and regulators, IR is a process that results in communication about how an organization’s strategy, governance, performance and prospects lead to the creation of value over the short, medium and long term. Dubbed the “next step in the evolution of corporate reporting”, it is a holistic view of a reporting entity’s performance, risks and opportunities pertaining to six categories of “capitals”: financial, manufactured, human, intellectual, natural and social. The IIRC is set to release its first version of the Integrated Reporting Framework in December 2013, which is already stirring significant interest.

Since 2009, an increasing number of companies have published what can be loosely labelled as an “integrated report”. Perhaps the most notable step towards IR to date has been the adoption of mandatory integrated reporting requirements by the Johannesburg Stock Exchange in 2010 as a listing requirement. In Australia and the Netherlands, various studies and surveys have been published on the rate of adoption of IR by publicly-listed companies since early 2010. In our 2013 Global 100 Most Sustainable Corporations ranking, 18 companies published an integrated report.

In a prototype version of the IR framework released in November 2012, one of the four objectives of IR is to “inform resource allocation by providers of financial capital that supports long term, as well as short and medium term, value creation”. This commitment to inform investment decision-making has deep implications for Corporate Knights, and in particular its flagship Global 100 Most Sustainable Corporations Ranking (Global 100). Since its inception in 2005, the Global 100 has sought to identify the 100 leaders in terms of social, environmental, governance and financial performance. Indeed, as at 31 December 2012, the Global 100 companies have outperformed the MSCI All-Country World Index by 9.5% on a cumulative basis since 2005 (see figure 1).

A widespread adoption of IR will present significant opportunities for Corporate Knights’ Global 100 methodology. Over the years, Corporate Knights has brought a number of improvements to its Global 100 ranking methodology to better reflect changes in disclosure practices creating indicators that distinguish companies that are susceptible to long-term environmental, social and financial performance. It is interesting to note that the methodology employed for the Global 100 as it stands today shares a number of interesting similarities with some of the reporting requirements under the prototype IR framework introduced earlier.

As stipulated above, the IR framework is primarily geared towards responding to investor information requirement. THe similarity in some of the Global 100’s key performance indicators and the IR framework’s standards may imply that the Global 100 is well-equipped to assess companies for capital allocation decisions. IR is still an evolving concept and its implementation in South Africa is a source of learning opportunities; Corporate Knights will follow these developments closely.

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