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Who is for real? My key observations from Climate Week NYC

23 October 2019 - By Marjella Lecourt-Alma

It’s been something of an existential time for us here at Datamaran. After celebrating our fifth anniversary with our clients, partners and suppliers back in June, Climate Week was another time to get introspective and ask ourselves some big questions about our purpose: who are we? What are we trying to do? Where are we? Where are we going?

It was also the perfect opportunity to reconnect with and expand our network. Here are my key observations from the meetings, the presentations and the conversations of Climate Week.

Turning talk into action

There’s a weird contradiction with these major events. As sustainability professionals, we bemoan the surplus of talk and the lack of action over issues like climate change, then we all get together and...talk about the lack of action on climate change. It doesn’t quite make sense. During the week, I heard a lot of grand talk. A lot of things I’ve heard before. So I found myself asking: who is really serious about what they’re doing? Who is truly for real?

Datamaran at Climate Week NYC 2019

Meeting the Nasdaq, ERM and Datamaran community at climate week

In many ways, Climate Week was a microcosm of the situation in organizations across the world. There’s a tone at the top that business needs to become more sustainable, and at the bottom there’s reporting. But is there enough action? Is all this reporting triggering change in companies’ behaviour? #integrateddoing y’all?

We want to be seen as a company that’s doing stuff, that’s building software and systems to help companies not just find the data – which isn’t useful on its own – but to do something with the data. We want our action to fuel further action.

Top billing for the bottom line

My key lesson from speaking to the ACCA, IFAC and the many accountancy professionals at Climate Week is that accountants embrace their importance in climate risk reporting. They are no longer the back office support staff who sit hidden away, quietly monitoring expenditure and whispering sensible advice in the ears of the company leadership. Now, accountants are the ones in the company who can do something. The TCFD is the facilitator that has brought in the finance function.

Five years ago, companies’ reporting was inside-out, focused on how the company was affecting the external environment. The TCFD has turned that around. Reporting’s now from the outside-in, discussing how climate issues affect your bottom line – and that’s what’s made companies so much more eager to disclose on their ESG issues. Or unease, as now this is keeping the C-suite up at night.

A question of terminology

Back in the ‘80s and ‘90s, the talk was about this abstract phenomenon known as global warming. That issue has now become climate change (as global warming sounded too scary…). We went from global warming, to climate change, to climate risk, to climate emergency to now climate action. The TCFD has taken this single issue and created a sense of urgency – something that couldn’t exist when it was “only” climate change. Climate risk is now giving rise to calls for climate action, or practical solutions to mitigate these costs.

As part of this, stakeholders are asking companies what they’re doing about it. How they’re measuring their impact. Companies like Unilever and Zurich are now conducting scenario analysis – the process of analyzing possible future events by considering the different possible outcomes. They’re asking how the company would survive under the conditions of a higher temperature. What would be the impact on the bottom line. And this brings in the finance function and the CFO.

Legal obligations

How do you make sure companies are doing something about these issues? We’re increasingly seeing that it’s becoming law to integrate ESG into corporate strategy. The UK has obliged all listed companies and large asset owners to report on climate-related risks and opportunities in line with the TCFD recommendations by 2022. France has already indoctrinated the TCFD recommendations into law. Recently passed in the US, the ESG Disclosure Simplification Act (A draft bill to be frank) requires the SEC to define ESG metrics, and companies to disclose them along with their audited financial statements. It also allows the SEC to incorporate the TCFD or other international standards when defining these metrics. This is unlikely to become law - but again undercurrent that won’t go away.

Creating Value in a Climate Emergency: Datamaran at Climate Week NYC

Speakers from left to right: Jimmy Greer (ACCA), Rodney Irwin (WBCSD), Chris Power (Salesforce), Patrick Temple-West (Financial Times), Marjella LeCourt-Alma (Datamaran) and  Kevin Dancey (IFAC)

Framing issues in a way that corporate leaders feel the need to act, the TCFD is increasingly becoming the model for rule-making in the future. Climate issues have become not a niche concern of small, under-resourced teams, but a matter of risk management. In fact, the TCFD framework can be applied on different topics, not just climate change. As to how, well that’ll be down to the business community to figure out.

Facing the future

Companies want to know what’s coming next. Well, a big clue came with Governor of the Bank of England Mark Carney’s warning that companies who ignore the climate crisis will go bankrupt. This is another clear call to action for organizations across the world. The ESG market will only get bigger – so this is a huge opportunity for innovators to help meet these requirements. On the “doing part”, there’s lots to do. I know that Peter Bakker coined the phrase “Accountants will save the world”.. But here at Datamaran we strongly feel that without engineers they won’t get very far. We shall pair up scientific knowledge and real problem solving skills and accounting.. And there you go. 

So the need is clear, the course is set and we are ready. It comes back to whether or not people are serious. Are risk consultants and PR professionals looking at the external piece? Are they actively testing other markets outside sustainability? Are companies serious about making significant changes to their business practices? Are they for real?

Things won’t slow down after Climate Week. Our European User Forum will take place on Friday 8th November in Amsterdam, hosted by ABN AMRO. Our US User Forum  will be on 3rd February 2020 in Phoenix. We hope to see some of you there.

ENDS


TCFD: An update on corporate disclosure following the second status report

In June 2019, the TCFD released its second status report, indicating increased adoption of its recommendations.

To coincide with its release, we are updating our previous analysis into the extent to which this adoption has been reflected in supporters’ corporate disclosure.

The analysis shows that, whether they’re supporters or non-supporters of the TCFD, companies are now talking about climate change more than ever before. More in detail, climate change is predominantly discussed through a risk rather than an opportunity lense – with 54% of FinServ TCFD supporters referring to the topic in relation to risk and 20% in relation to opportunity in 2018. 

To read the full report, please fill in the form on the right.

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