New requirements for sustainability reporting can become an important tool, but it is urgent to give the companies driving rules that prevent greenwashing. The government has proposed how the EU regulations for sustainability reporting should be introduced for approximately 1,200 public and private companies in Norway. The purpose is a more sustainable economy, in line with the EU’s green contribution and the UN’s sustainability goals. Climate and natural risk reporting forms a central part. The companies must now consider how their operations affect the climate and nature – and vice versa. Now it is verifiable facts and data that apply. Public data and research methods for climate and nature must be used in companies’ decisions, which is necessary if the climate and nature crises are to be resolved. The backdrop is serious: the World Economic Forum (WEF) points out that the next decade will be characterized by environmental and social crises, driven by underlying geopolitical and economic trends. Nature loss, ecosystem collapse and overuse of natural resources are examples of some of the biggest threats, and are the global risks that will worsen the fastest in the next decade. The forum believes that the combination of climate and environmental challenges and socio-economic drivers will “constitute a dangerous mixture”. They estimate that half of global value creation is dependent on nature, in whole or in part, and ecosystem collapse will therefore have enormous economic and social consequences. We can expect increased conflict over areas. Consideration of ecosystems must be balanced against the need for the development of renewable energy and development for other socially beneficial purposes. We humans provide ourselves with nature at a breakneck pace. The International Resource Panel (IRP) points out that the consumption of natural resources is closely linked to climate change and the loss of biodiversity, and the pressure on natural resources will continue to increase. Therefore, it is crucial to make a quick transition to a sustainable consumption of resources in order to solve the environmental and climate challenges. The European Environment Agency (EEA) has identified the 36 most important climate risk factors for Europe. Several of the critical factors are related to the preservation of ecosystems and the protection of people against extreme weather events such as heat, floods and forest fires. The Climate Committee 2050, which presented its recommendations to the Norwegian government in 2023, calls for a major restructuring – across sectors – of climate policy in order to succeed in a low-emission society. Because the transition to a low-emission society will require scarce resources (such as power, land, natural resources, labor and expertise), the use of resources in different sectors must be weighed against each other and all economic activity must take place within the framework set by nature. Open and comprehensive reporting of how business affects and is affected by nature and climate at home and abroad is a decisive step in solving the major challenges we are already facing. Large and small companies demand knowledge about how reporting for climate and natural risks can be done, and how they can be assessed in context. They need both knowledge of the data and how it can be used, and a good understanding of global and national policies and frameworks to be able to assess transition risks. To ensure legitimacy and avoid greenwashing, there must be transparency about the data and methods companies use for reporting. The methods should, to the greatest extent possible, be research-based and verifiable. Transparency around reporting and data will provide a necessary basis for consumers, investors and the state to be able to make climate- and environment-friendly choices and investments. In the long term, the requirements will thus contribute to a more sustainable economy, where capital flows go towards truly green investments and with reduced financial risk. Furthermore, it must be possible for the rest of society to compare the data that the companies report on. Therefore, the authorities must develop guides, guidelines and frameworks for reporting in order for it to have the desired effect. In addition, everyone must speak the same language: There is a need for a common use and understanding of terms across sectors, which is linked to global and national frameworks, agreements and goals. The government must ensure good coordination of environmental data portals that contain access to, and guidance on, which data can be used and how. Without guidance on the use of terms, data and methods, we risk the development of different approaches of varying quality. New reporting requirements can be both time- and labor-intensive. But without transparency about risk factors, we cannot change the development either. It will cost society dearly. After all, it is better to be safe. With the global threats we now face, being behind soon is unfortunately not an option. Published 24/07/2024, at 08.58
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Transparency is a good investment – Expression
