COP 28 and sustainability reporting

From 30 November to 12 December, Dubai was in the centre of world attention for hosting the 28th United Nations Conference of the Parties on Climate Change, known as COP28. During this event, which took place in the Expo site, representatives of the 198 participating countries, including Italy, discussed solutions to protect the planet from pollution and climate change. Leading the consultations was Sultan Ahmed Al Jaber, CEO of Abu Dhabi's national oil company, ADNOC. After two weeks of intense negotiations on the climate crisis, a final agreement was reached and the Global Stocktake was approved, which sets out a series of commitments to reduce greenhouse gas emissions.

The most significant news at the end of these two weeks of meetings and negotiations is the historic agreement on the Global Stocktake, as foreseen in the Paris Agreement. There are three main objectives: the reduction of greenhouse gas emissions, adaptation to climate change and increased financing. The main goal remains to limit global warming to less than 2 degrees Celsius and to aim for 1.5 degrees. According to IPCC climate experts, to achieve this goal, emissions will have to fall by 43% by 2030 (compared to the figures recorded in 2019).

The most important points contained in the Global Stocktake are: stop relying on fossil fuels by 2050; triple renewable energy capacity globally; gradually reduce the use of unabated coal for power generation; accelerate global efforts towards net-zero energy systems; promote accelerated development of zero- and low-emission technologies, such as renewables and nuclear energy; substantially reduce carbon dioxide emissions globally, with a particular focus on methane emissions by 2030; reduce emissions from road transport on various routes; phase out inefficient fossil fuel subsidies.

Another step towards sustainability concerns the EU Directive 2022/2464, known as the Corporate Sustainability Reporting Directive (CSRD) Article 11 sets out the principles and guiding criteria for the transposition of the 'Corporate Sustainability Reporting Directive'. The directive amends European legislation on corporate reporting, introducing more detailed requirements for the disclosure of corporate reports on the Environmental, Social, Governance (ESG) aspects.

The CSRD introduces new transparency obligations for companies regarding environmental impact, human rights and social standards, superseding the existing Non-Financial Reporting Directive(Directive 2014/95/EU, "NFRD"). The new provisions are based on common criteria in line with the Union's climate objectives. The main provisions of the NFRD are: extension of the reporting obligation to all listed companies and large companies that exceed certain financial criteria; independent assurance of sustainability reports; adoption of a single European reporting standard, the European Sustainability Reporting Standard (ESRS), developed by the EFRAG; digital access to information via a European database; inclusion of sustainability reporting in the Management Report.

The European Union, governments, international communities and citizens are becoming increasingly demanding of businesses, asking them to conduct business in an ethical and responsible manner towards society, people and the environment. In particular, they are required to provide information on related performance. Timely, regular and transparent communication of initiatives and commitments by companies has become one of the main demands of stakeholders, to which companies increasingly have to respond through the production of so-called Sustainability Reports.

The Sustainability Report is the document through which a company reports on its initiatives and performance in terms of environmental, social and economic sustainability. In other words, it is the medium through which it communicates the actions it undertakes to protect the environment, its approach to employees, its relationship with the territory and the community, and the way it creates and distributes value to its stakeholders. Today, sustainability reporting has become a central element of any corporate sustainability strategy. Through the reporting process, an organisation identifies the significant impacts it has on the economy, the environment and/or society and communicates them according to globally recognised standards. Sustainability reporting based on these standards should provide a balanced and reasonable representation of an organisation's positive and negative contributions towards the goal of sustainable development.

Companies are aware of the shift towards sustainability and are on the hunt for consultants. Highlighting the criticalities reported in sustainability reporting is Monica Rossolini, professor of Economics of Financial Intermediaries at Bicocca University. Rossolini, highlights how critical issues relate in particular to the disclosure of reference indicators and the difficulty of identifying specialists in the field. But he specifies that in reference to green financial statements there are benefits in relationship with stakeholders and in improving the brand reputation in risk management.

The COP28 conference was an opportunity to present concrete achievements. In particular, two new international standards of great importance were introduced. The first standard, called ISO 14068-1 (Climate change management - Transition to net zero - Part 1: Carbon neutrality). This standard is essential to promote the reduction of greenhouse gas emissions and the adoption of sustainable practices. The second standard, called ISO/TS 19870 (Hydrogen technologies - Methodology for determining the greenhouse gas emissions associated with the production, conditioning and transport of hydrogen to consumption gate), concerns hydrogen technologies. This standard is of crucial importance for promoting the development and adoption of low-carbon hydrogen technologies.

Looking to the future, with the official conclusion of the work of the COP28 and the new targets being set, all countries are called upon to maintain their collective commitment to promote a more sustainable future. The world of standardisation is actively engaged in this process and is relaunching international standards as powerful tools to foster the growth and development of society as a whole. In this context, 3Bee realises alongside organisations and companies tangible and measurable regeneration projects, in line with the ESG objectives and with an approach based on innovative proprietary technologies, with the aim of optimising policies for the protection and conservation of biodiversity.

Article by Angelina Tortora