The Consistency Project allows investors to compare and collect climate change information, providing greater clarity on risky ventures.
In facing up to the challenges of climate change, businesses and investors have a major role to play. Incentives in the market determine whether investment goes towards carbon-intensive sectors or towards greener sectors, but transparent information is at the heart of these incentives. A seemingly profitable opportunity in the short-run can be recognised as a risky venture when information about its long-term sustainability is brought in.
While crucial for changing the incentives in the market, the current state of reported information is awash with overlapping, inconsistent and even contradictory standards. This increases the costs of reporting climate change-related information for businesses, and makes it needlessly difficult for investors and policymakers to build decisions upon.
One of the main tasks of the Climate Disclosure Standards Board is a response to these problems: the Consistency Project. This project is in the process of producing a single database that collects the various voluntary and mandatory environmental disclosure standards in the G20 countries. As businesses seek to provide the best information possible to investors, they are confronted with a bewildering array of mandatory regulations, suggested guidelines, and voluntary codes. Once complete, the Consistency Project will provide both an overview of the existing routes for environmental disclosure, as well as a basis for moving towards greater global consistency.
For businesses, the Consistency Project offers a simple means to compare, contrast, and collect information on how different jurisdictions are approaching the issue of environmental disclosure in financial statements. For instance, information on how different jurisdictions handle greenhouse gas measuring can be easily collected and presented. By simplifying portions of the reporting process, the Consistency Project will ease businesses into the emerging era of widespread climate change-reporting.
For standards setters, the Consistency Project synthesises existing work into an easily comprehensible format. It allows for the highlighting of similarities across countries, the recognition of best practices, and the examination of divergent standards. It will allow areas of overlap and consistency to be identified with ease, and provide a baseline for establishing a globally consistent set of standards. Rather than adding yet another international standard to the proliferating set of existing standards, the Consistency Project will aim to find areas where minimum international consistencies are already established.