Carbon Emissions Meets Financial Reporting: No Time to Waste
source: http://www.triplepundit.com/2010/03/enviance-carbon-reporting/
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- captainplanet71
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In January of this year, the Environmental Protection Agency (EPA) and Security and Exchange Commission (SEC) implemented unprecedented new reporting that mandate thousands of companies—many for the first time—track and report their carbon emissions for 2010. Companies have quickly realized that auditable GHG data tracking and management will quickly move from a “nice-to-have” to a mandatory component of financial reporting.
Because of the financial implications of carbon going on the balance sheet, organizations must be able to verify CO2 emissions, not just loosely estimate them with “spreadsheet” data collection. The snowball effect of GHG emissions included in financial reporting is a heightened risk for inaccurate data, but also a call-to-action for companies to reduce carbon emissions to meet EPA and SEC regulations.
A key issue for CFOs is that GHG data reports will be scrupulously audited, and any missteps could lead to discrepancies in company financial statements, enforcement action by the SEC and class action lawsuits from investors misinformed about the cost and risk of GHG. Given this increased risk, investors, regulators and juries will view reporting criteria on the same level as other financial metrics that determine the value a company.
Furthermore, if a cap-and-trade or carbon tax system is ever implemented in the US, as already in place in most other industrialized nations, there will instantly be a scramble for companies to reduce carbon emissions—a positive environmental outcome. For companies that must purchase carbon allowances to conduct “business as usual,” this new carbon-related cost could prove a costly mess if not properly analyzed, measured, accounted for and financed.
More at link...
Because of the financial implications of carbon going on the balance sheet, organizations must be able to verify CO2 emissions, not just loosely estimate them with “spreadsheet” data collection. The snowball effect of GHG emissions included in financial reporting is a heightened risk for inaccurate data, but also a call-to-action for companies to reduce carbon emissions to meet EPA and SEC regulations.
A key issue for CFOs is that GHG data reports will be scrupulously audited, and any missteps could lead to discrepancies in company financial statements, enforcement action by the SEC and class action lawsuits from investors misinformed about the cost and risk of GHG. Given this increased risk, investors, regulators and juries will view reporting criteria on the same level as other financial metrics that determine the value a company.
Furthermore, if a cap-and-trade or carbon tax system is ever implemented in the US, as already in place in most other industrialized nations, there will instantly be a scramble for companies to reduce carbon emissions—a positive environmental outcome. For companies that must purchase carbon allowances to conduct “business as usual,” this new carbon-related cost could prove a costly mess if not properly analyzed, measured, accounted for and financed.
More at link...
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- groups:
- Green
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- tags:
- Taxes, EPA, Carbon Footprint, Carbon Emissions, 2 more
