Yesterday, in a watershed moment, the
US Securities and Exchange Commission (SEC)announced that they are considering passing legislation that requires all businesses to evaluate and disclose their climate-related risk. They declared that:
- The scientific implications of climate change are ‘clear and alarming’;
- Climate change poses a ‘pressing and urgent risk’ for ‘companies, investors, capital markets and the economy’;
- Companies in the US need to start evaluating and disclosing their climate-related risk.
Following on from the recent
IPCC Reportwhich reiterated "any further delay in concerted global action will miss a brief and rapidly closing window to secure a liveable future’" it seems the SEC is taking an important decision to act now and implement climate disclosure regulations using the
Task Force Climate-Related Financial Disclosuresas a framework model.
The number of corporate climate disclosures has been roughly doubling year-on-year for over a decade, and a large number of US corporations already voluntarily publish climate disclosures using the TCFD framework. This proposed rule would ensure there is increased visibility over climate-related risk and greater transparency over corporate strategies and policies.
Companies would be expected to disclose their Scope 1 and 2 greenhouse gas emissions. Scope 3 greenhouse gas emissions are also expected to be included if deemed ‘material’, meaning if the absence of their inclusion in the disclosure has the potential to impact those using the disclosure to make decisions.
In practical terms, this means that companies would now need to start accounting for their impact and evaluating climate-related risk. That includes the emissions within their supply chains as well as relating to sold goods. It's likely that they will begin implementing emissions reduction strategies, while investors and shareholders make financial decisions based on the relative rankings of companies in specific sectors. This is likely to have a significant impact on any business, from global strategies to marketing plans to fundraising.
According to the
CDP, just 1500 companies out of the approximately
10.75 million businessescurrently operating in the US, disclose their Scope 3 emissions voluntarily. It is generally seen as good practice to start accounting for Scope 3 emissions, both for transparency and effective internal analysis, as well as to prepare for potential policy changes in the future.
TravelPerk’s expert team uses global reporting methodologies, in-line with the TCFD framework, to allow companies to track their corporate travel emissions across all travel verticals (air, rail, hotel, and car hire). This can really take the pain away from companies that will need to start incorporating climate disclosures into their normal business practices.
In order to help businesses reach their net-zero targets relating to business travel, we at TravelPerk have developed a suite of sustainability solutions:
GreenPerk: where TravelPerk users and clients can understand their business travel footprint. They can offset their business travel carbon emissions by investing in projects relating to biogas capture, forestry, and renewable energy. All projects are VERRA accredited and held to the highest standard of the United Nations Sustainable Development Goals.
GreenPerk API: an external, open-source API that businesses can integrate into their own platforms. This API allows users to use actionable insights to create net-zero strategies, develop sustainable travel policies, and understand what elements of their business travel are leaving the highest carbon footprint.
Understanding the potential effects of climate change on your business, strategy, and financial planning under different potential future climate scenarios is central in building a long-term sustainable business. That’s why at TravelPerk we are helping our customers by providing information that will help them understand their carbon footprint as it pertains to business-related travel. Customers can
offset their business travelcarbon emissions by investing in projects relating to biogas capture, forestry, and renewable energy. All projects are VERRA accredited and held to the highest standard of the United Nations Sustainable Development Goals.
TravelPerk has also this month, launched
GreenPerk API, an open API-based service for travel to their customers, and all businesses, giving them the tools to use actionable insights to create net-zero strategies, develop sustainable travel policies, and understand what elements of their business travel are leaving the highest carbon footprint.