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By Carol A Adams, Monash University, ACCA member of Global Forum for Sustainability

This year’s World Cup was supposed to be the “greenest ever”, with FIFA taking measures to account for the event’s greenhouse gas emissions, including an estimated 2.7 million tonnes of carbon dioxide.

As the biggest sporting event on the planet, FIFA is under pressure to take its sustainability measures seriously. It provides a unique opportunity to raise awareness among hundreds of millions of people around the world and the potential to leave a lasting low carbon legacy in the cities that host it.

Accounting for greenhouse gas emissions helps identify where carbon emissions can be reduced. But like any form of accounting it is not an exact science and it is important to be mindful of what matters, what’s the purpose and what can and should be changed.

What’s in…

The key to calculating the size of the carbon footprint of the World Cup is deciding what’s in and what’s not. FIFA applies the Greenhouse Gas Protocol Corporate Standard, which aims to guide organisations in preparing a greenhouse gas emissions inventory that represents a true and fair account of emissions in a standardised way. This allows comparisons, for example, with other sporting events.

FIFA states that its carbon accounting includes the preparation phase and staging both the Confederation Cup and World Cup. That is, FIFA does not just include the World Cup event itself, but all the events leading up to it such as the draws and associated banquets.

FIFA has committed to reporting more than the minimum expected in a greenhouse gas inventory by including what are known as “Scope 3” emissions – indirect emissions that are beyond FIFA’s control. Reporting of Scope 3 emissions is optional. FIFA’s strategy and work on this can be found here.

Scope 3 emissions, of which spectator travel makes up by far the most, were estimated to make up of 98% of the World Cup Staging phase, so when included they make emissions actually under FIFA’s control look relatively small.

…and what’s out

Despite “going beyond the minimum” with its Scope 3 measures, FIFA does not account for emissions associated with infrastructure (known as embodied carbon) arguing that they are not under FIFA’s or the Local Organising Committee’s control or direct influence.

Yet major events could have significant influence through their assessment of bidders for infrastructure projects, including on social and environmental responsibility criteria.

For example, two strategies were used to reduce embodied emissions in London’s Olympic Park. Firstly, the use of low carbon concrete mixes. And second, designing structures that used less materials.

Although not considering these matters within its purview, FIFA has included the construction and demobilisation of temporary facilities.

Without greater effort to reduce and avoid emissions, FIFA’s commitment to buying carbon offsets could be seen as a smoke screen. But FIFA is demanding that bidders now have to provide information against a number of criteria including the management and governance processes in place to ensure the integration of environmental issues in planning.

There are other options for reducing event emissions that are not revealed by FIFA’s accounting: using existing infrastructure wherever possible, minimising embodied carbon in new infrastructure (and making sure it’s used afterwards), as well as filling venues and using good public transport.

Abandoned Olympic venues from around the world.

The power of sport to change the world

With increasing pressure to account for greenhouse emissions, cities like Melbourne whose economies rely on hosting events will need to invest increasingly in public transport, renewable energy sources, energy efficient accommodation and reducing emissions from waste.

As non-government organisations and others step up calls for transparency of the environmental impacts of events, cities that invest in measures to reduce those impacts are increasingly likely to be favourably viewed as venues. ClimateWorks Australia worked with the City of Melbourne on research to inform its approach to developing a road map towards a zero net emissions goal.

This identified a range of energy efficiency and other mitigation opportunities, including for large sporting facilities, which could reduce the city’s emissions by 30% by 2020. In the future such measures may make the difference between a successful and unsuccessful bid for a major event.

An independent United Nations Environment Program (UNEP) report on the 2010 FIFA World Cup in South Africa found that, while the event produced lower carbon emissions than expected, most of this was due to fewer people attending the event. The goal of the 2010 World Cup was “carbon neutral”, but funding constraints meant many planned strategies to reduce or offset emissions weren’t enacted. However, the strategies that were used did appear to work – particularly new, more energy efficient stadiums.

A key innovation of that event was an Environmental Forum comprising of representatives from government departments, host cities and international agencies, such as UNEP, as well as members of the World Cup Local Organising Committee. It’s an approach that will have a lasting influence – a legacy for hosting cities.

Sport is central to our lives and has an incredible power to change how we feel and how we behave. Indeed, under Nelson Mandela’s leadership, rugby went a long way to bringing black and white South Africans together at a critical time and in a way that nothing else could.

By using its influence as the world’s largest sporting event, FIFA could leave a lasting environmental legacy by looking beyond that which it currently measures. In this way it can become a model for sustainable planning of large international events in the future.

More information will perhaps become available in the coming months, but based on available information, it seems that FIFA is hiding behind data and carbon offsets and lacks a strategy to make a real impact.

The Conversation

Carol Adams is a Professor at Monash University. Monash University and The Myer Foundation are founding partners of ClimateWorks Australia.

This article was originally published on The Conversation.
Read the original article.

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Sustainability

By Gordon Hewitt, sustainability advisor, ACCA

During April and May, ACCA held a series of six focus groups that sought to gather the views and opinions of experts in corporate sustainability reporting around the world. The focus groups took place in Australia, Canada, Hong Kong, South Africa,  the UAE and the UK.

The discussions centred on the corporate sustainability reporting outcomes of the Rio+20 Earth Summit, known as paragraph 47, that took place in Brazil last year. ACCA has been involved in the debate around paragraph 47 since 2011, mainly through the Corporate Sustainability Reporting Coalition, which is a coalition of financial institutions, professional bodies, NGOs and investors that is being convened by Aviva. In May 2012, ACCA published the policy paper Making a Difference at Rio.

The focus group brought together 49 high level delegates representing the business, accounting, sustainability, investment and NGO communities. Organisations represented included all of the Big 4 accounting firms, NGOs such as WWF and Save the Children, investment banks such as Credit Suisse and research organisations such as EIRIS and Corporate Knights.

Delegates were asked their opinions on the content of paragraph 47, and whether or not the agreement made at the Rio conference was strong enough to change corporate behaviour; what the key challenges and opportunities were to implement paragraph 47 in each respective country; how the needs of developing countries can be considered; and which current models and sustainability reporting frameworks represent best practice.

Feedback from the focus groups has been written up into a paper, one year on from Rio+20. Specific recommendations to governments looking to implement paragraph 47 include a focus on materiality when developing sustainability reporting frameworks, the importance of collaborations and consultation with key stakeholders and that reporting frameworks should be adaptable to national and sectoral needs, among others. This paper will help ensure that the momentum generated in Rio is maintained; ensure that ACCA’s stakeholders remain informed about international initiatives that are actively promoting and advancing corporate sustainability reporting; and feed into the various working groups that ACCA is involved with.

Read our report, Paragraph 47 – International perspectives one year on, here.

Keep up-to-date with ACCA’s thinking on sustainability issues by following the @ACCASustain Twitterfeed.

ACCA heads-6084

By Gordon Hewitt, sustainability advisor, ACCA

“We use our Earth as if we have a planet and a half; we have a deficit relation with our natural resources. The biggest challenge facing not just business, society and government, but humanity is the question of our sustainability. And business as usual will do nothing to solve it.”

These are the words of the Global Reporting Initiative’s (GRI) chief executive Ernst Ligteringen at its global conference in Amsterdam last month, underlining the raison d’etre of the sustainability reporting standard-setting body’s work as he unveiled the latest generation of reporting guidelines, known as G4, to a 1,500-strong audience of business leaders and finance professionals.

The launch of the G4 guidelines marks the culmination of two years of consultation involving 120 specialists and two consultation periods to which more than 2,500 responses were received. The new guidelines demand greater transparency from the organisations that use them. It is about creating better companies, a better market, a better world with more social justice and business managed in a responsible way.

Key features of G4

The G4 guidelines aim to help companies produce clear, concise sustainability reports that are of high relevance to an organisation’s stakeholders. The guidelines aim to be more user friendly than previous versions, helping reporters to focus on and manage what really matters.

Some key features of the new guidelines are as follows:

  • Materiality: This is certainly not a new concept to the GRI, but the G4 places greater emphasis on the subject. The new guidelines aim to help organisations to produce reports that are concise and include information and KPIs on material impacts only. Reporters must define materiality and provide full disclosure on the topics that are material to them.
  • Value chain: A major difference between the G4 and previous iterations of the GRI guidelines is the focus on an organization’s value chain. Reporters must assess their complete value chain, and disclose where their impacts are most material. This will present significant challenges to many companies, as such supply chain transparency is complicated and expensive to attain, and will often involve the impacts of suppliers over which they have little control.
  • Application levels: The G4 no longer has a system of application levels (A, B, C), which many believed drove companies to take a checklist approach to sustainability reporting. The GRI have introduced an “in accordance” system, with two tracks – core and comprehensive – for reporters.
  • Disclosure on management approach: The new guidelines will require organisations to report on how they identify and manage their actual or potentially material impacts. This kind of narrative disclosure will provide report users with a better idea of how companies are managing their impacts, which will provide greater context to the KPIs included within a report.
  • Assurance: In previous iterations of the GRI guidelines, reporters would indicate whether they had some form of external assurance over their reports by adding a + after their application level (e.g. A+). This did not provide any information over how much of the report was assured, which was clearly an issue. This has been removed from the G4 guidelines, which instead has an additional column in the organisation’s GRI index table where reporters can indicate which elements of the report has been assured, thus providing greater transparency on the extent of external assurance.

GRI and Integrated Reporting

A recurrent question that emerged from the GRI conference was how the G4 guidelines will fit in with the integrated reporting. The International Integrated Reporting Council (IIRC) recently published a Consultation Draft of the International <IR> Framework, and is due to launch its framework later on this year. The IIRC draft framework aims to allow companies to report on material information about an organisation’s strategy, governance and performance that reflects the commercial, social and environmental context within which it operates.

According to the IIRC, integrated reporting is not simply about combining existing financial and non-financial disclosure, but will certainly draw on elements of a company’s financial and sustainability reports to the extent that the information is material to how an organisation’s strategy creates and preserves value.  With this in mind, the GRI will be looking to offer guidance on how to link the sustainability reporting process to the preparation of an integrated report.

Whilst there is still an element of uncertainty of the future of corporate reporting, the G4 guidelines are certainly a step in the right direction.

SustainabilityBy Gordon Hewitt, sustainability advisor, ACCA

The COP18 climate negotiations came to a close in Doha on 8 December, a day later than scheduled and following an all-night final negotiation session.

The two-week conference resulted in nations signing the Doha Climate Gateway. This outcome document makes modest progress in addressing the risks associated with climate change, with the main points including a continuation of the Kyoto Protocol, reiteration of commitments on long-term climate finance and the inclusion of ‘loss and damage’ in a conference outcome document for the first time. The conference also saw progress on the Durban Platform (ADP) towards an agreement covering all countries by 2015.

The Kyoto Protocol, which is currently the only binding agreement under which developed countries have committed to cut their greenhouse gas emissions, has been extended for a period of eight years from 1 January 2013. Whilst the continuation does maintain some degree of forward momentum, it will not result in a major reduction in emissions, as many developed countries have not signed up to the second commitment period. Countries that have signed up include the EU, Norway and Australia; whilst those who have not include the US, Japan, Canada and Russia.

As the Protocol only covers around 15 per cent of emissions, forging an agreement that encompasses a much greater proportion of emissions will be a key focus of future negotiations. A critical challenge will be the distinction between developed and developing countries, as the world has changed enormously since the UNFCCC was negotiated in 1992, yet the classification of countries has remained the same.

Developed countries have reiterated their commitment to scale up climate finance, mobilising US$100bn per year by 2020, but practical commitments were scarce and few nations made any pledges that cover the period between 2013–2020. A number of European countries, including the UK, Germany, France and Denmark announced concrete finance pledges for the period up to 2015, totalling approximately US$6bn. The lack of further finance commitments was seen as a major disappointment from developing countries.

Much of the negotiation focused on the inclusion of ‘loss and damage’ proposals within the outcome document. This term refers to the dispersion of funds to vulnerable communities for the loss and damage caused by climate change. A particular opponent of this term was the US, who did not want any language connoting legal liability to be included in the text, as this could result in unlimited amounts of litigation. Whilst no international mechanism on loss and damage was set up in Doha, the possibility of setting one up in the future has been included in the agreement, a point that will undoubtedly be a major focus of COP19 in Poland next year.

A common criticism of UNFCCC negotiations has been the decision making process, which relies upon consensus between all parties. This has allowed nations to veto and block policies that are against national interest and resulted in many stalled negotiations and missed opportunities over the years. In order to address this issue, Mexico and Papua New Guinea have proposed to introduce majority voting to the COP process. This was not discussed officially in Doha, but will likely be included on the agenda of COP19.

Whilst some progress was made at COP18, it is widely regarded that the commitments made by governments to date are failing to address the risks posed by climate change and if emission levels are not curtailed soon, we will experience a level of warming that will have widespread negative consequences. The next two years leading up to 2015 are critical if governments are going to reach an agreement that will limit warming to 2C – the commonly agreed limit to avoid dangerous climate change.

Sustainability

By Gordon Hewitt, sustainability advisor, ACCA

UN climate talks opened in Doha this week, marking the 18th Conference of the parties (COP18) to the UN Framework Convention on Climate Change (UNFCCC). The Convention came into force in 1994 with the ultimate objective of ‘stabilising greenhouse gas (GHG) concentrations at a level that will prevent dangerous human interference with the climate system.’ Since 1995, parties to the Convention have met annually to assess progress in dealing with climate change. The meetings have made limited progress over the years and have been fraught with challenges. The most significant challenges are arguably the dynamic between developed and developing counties, and how climate change can be addressed is a manner that is equitable. This is an important point, considering that much of the CO2 that is causing global warming was emitted by developed countries over the past 150 years and that the impacts of climate change are hitting developing countries hardest. Other major challenges include getting governments to turn the reduction targets set at climate negotiations into concrete actions and streamline the fragmented approach to this global issue by national governments.

Progress towards a legally binding agreement on GHG emissions has been slow, but made a step in the right direction last year in South Africa. COP17 ended with 195 countries pledging to negotiate a new international climate treaty by 2015, known as the ‘Durban Platform’. Whilst this does put governments on track to reach a legally binding deal, some argue that the timeframe is too long and that much more urgency is needed if we are going to limit global warming to 2oC (the commonly regarded limit to avoid dangerous climate change).

This point has been demonstrated well by a recent report by the accountancy firm, Pricewaterhouse Coopers, which concluded that current governments’ ambitions to limit warming to 2oC appear highly unrealistic. The 2012 Low Carbon Economy Index has demonstrated that global carbon intensity (the average emission rate per unit of output) decreased between 2000 and 2011 by around 0.8% per year. Such a level of reduction has meant that governments need to cut carbon intensity by 5.1% every year, from now until 2050 to avoid dangerous climate change – a rate that seems unattainable considering the lack of commitment made by governments to date. The current rate of emissions cuts has put the world on track for an estimated 6oC of warming, a level that would have unthinkable implications for humanity.

The slow progress demonstrated by governments is also reflected by the corporate sector. In 2012, 81% of corporations from the Global 500 responded to the Carbon Disclosure Project (CDP) questionnaire. Their responses have provided a valuable insight into how companies are addressing the risks and opportunities associated with climate change. It is clear that some companies are aware of the need to act on climate change, but only a few leading companies are setting the necessary targets and required to ensure long term resilience against the negative impacts of climate change.

Accountants and finance professionals are very important stakeholders when looking to increase corporate action on climate change. This is due to their role within corporate risk assessment, as well as within corporate reporting. There is evidence that CFOs are becoming more aware of the need for greater action on the part of corporates. The accountancy firm, Deloitte Touche Tohmatsu, surveyed 250 CFOs of large companies (firms with annual revenues of at least $1 billion), and found that 49% saw a significant link between sustainability performance and financial performance. The greatest risks highlighted by the CFOs surveys related to energy prices, commodity prices and carbon regulations, so it is clear that climate related issues are rising up the corporate agenda. Accountants and finance professionals need to ensure that the risks posed by climate change are addressed with concrete actions.

As the effects of climate change are becoming ever more apparent, such as the increased incidence of extreme weather events, both governments and corporates need to switch on to the urgent need for action. In October this year, Hurricane Sandy swept up through the Caribbean, causing devastation across a number of island nations, before heading west into the US and Canada. The storm resulted in an estimated $71 billion worth of damage. Images of scores of people left homeless in Haiti – as well as flooded subway stations and blackouts across Lower Manhattan – show how vulnerable both rich and poor nations are to the effects of such massive storms, and provide a glimpse of the future if action is not taken soon.