Looking back at 10 years of CDSB

This week’s launch of the updated CDSB Framework for reporting environmental information, natural capital and associated business impacts  was a great occasion to celebrate and reflect on 10 years of CDSB. At the event we hosted at Norton Rose Fulbright, we discussed the work that we still need to do if we are going to achieve CDSB’s mission of aligning the global mainstream corporate reporting model to equate climate change and natural capital with financial capital.

Our story

CDSB was born at the World Economic Forum meeting in Davos in 2007 with the establishment of a new international consortium of business and environmental NGOs to create a generally accepted framework for climate risk reporting by corporations – to account for tomorrow’s climate.

The founding CDSB Board members agreed to align their core information requests from companies in order to ensure that they report climate change-related information in a standardized way that would facilitate easier and comparative analysis by investors, managers and the public via the annual report described in the launch press release by a large corporate as ‘'something of vital importance that others have spoken about but not acted upon for years."

CDP took on the role and have provided the global Secretariat to CDSB for the last 10 years, not just co-ordinating the day-to-day work program on behalf of the other Board members but providing a safe and secure home for the thought leadership, incubation and development of best and common practice in corporate climate and environmental reporting in mainstream financial reports. 

On day 1 of CDSB, the eminent Professor Roger Adams of the ACCA gave some wise words to the CDSB Secretariat: “you need to make sure you get a good product first and get it technically right and then build CDSB out from there.” So following his advice off we went. 

The experts assembled from far and wide. It was the first time such a diverse range of disciplines gathered together to solve a problem in the sustainability and corporate reporting landscape. And there was lots of ground to cover. I’ll just give you one example. It was on the topic of how to measure greenhouse gases and it was decided that CDSB needed to talk to suppliers of environmental data so AMEE agreed to meet with representatives of CDSB – which was the founding director and three accountants. 

After a period of circling each other trying to determine how to categorise the people sitting opposite them before moving onto the important topic of greenhouse gases, one brave sole asked: if I was to google people like you what would I google? And they replied “we are astrophysicists”. Politely the astrophysicists asked the same question of the CDSB delegation and they respectfully responded “we are accountants." 

With the world set to rights and all species classified, CDSB’s Technical Working Group and Secretariat set about solving the challenges and writing the Climate Change Reporting Framework launched at the 2010 Climate Change talks in Copenhagen. This was a huge milestone and effort for all involved. Among all the million stories, I remember the efforts of the PwC partner, who carried a whole stack of printed frameworks across to Copenhagen in his baggage for the event. We had no money left for postage!

Collaboration is one of CDSB’s key values and is central to CDSB’s identity and, in fact, everything we do. We work in a joined-up way with companies, investors and standard setters, all over the world to harmonise the world of reporting, complementing and supplementing but not duplicating approaches to reporting. Collaboration has been central to delivering the CDSB strategy, between individual members of the consortium that make up the Board and Technical Working Group, as well as others such as the OECD, the UN Convention on Trade and Development and the Sustainable Stock Exchange Initiative, to name but a few.

In fact, it was partnership working that saw CDSB named as on one of five innovators that transformed the climate change battle in 2014 for our work with UNEP Finance Initiative on fiduciary duty and resilient capital markets.

There are many more anecdotes of the last 10 years of CDSB – that’s the beauty of collaboration and constantly working with someone new. Nevertheless, I don’t think CDSB’s Founding Director Lois Guthrie and I were ever as excited as when we were invited to Google's offices to talk about an idea we had to make sense of the sustainability reporting landscape. This was back in about 2012, and although we were a bit too advanced at the time for Google, I am pleased to say this work now is known as the Reporting Exchange and is a project of CDSB Board member WBCSD, funded by the Gordon and Betty Moore Foundation and being technically delivered by the CDSB Secretariat. 

Incidentally it was around this time in 2012 that Google and CDSB were acknowledged as two of 50 global stars in seriously long-term innovation. We were listed in the constellation for category "linking multiple change agents" alongside China’s 5-year plan, TED and the London 2012 Olympic Organising Committee. The award recognised CDSB’s ability to create value for the long term.

The most efficient way for CDSB to achieve its ambition for globally consistent, comparable, decision-useful climate information being reported in annual reports at the scale and pace needed to prevent further climatic changes and resource depletion is to make it mandatory. In the absence of the International Accounting Standards Board acting and the planet not having the time frames previously demonstrated as required for financial standard setting, CDSB has been working with regulators across the world to seek adoption of our work into regulation or quasi-regulation. 

Our first success was in the Companies Act here in the UK, where the Framework was referenced in the guidance for compliance but since then our work has been referenced in stock exchange reporting guidelines and elsewhere globally. 

Climate change was the reason we were set up, but the market and regulators were becoming aware of the fact, that climate is only one of the many elements of natural capital that affect a business value. So, in 2013 we set about expanding CDSB’s remit to include natural capital and environmental information – the wider “e” in ESG in mainstream reporting if you like. 

Two tough public consultations and 18 months later we launched at the Institute of Chartered Accountants of England and Wales here in London, with its CEO Michael Izza’s famous quote “Not another reporting framework I hear you groan….”.

We like to remind people that the CDSB Framework is not yet another framework: it is a unique tool to help businesses make the connection between natural capital and their financial performance.

The Framework expansion was well received by the market. The European Commission has referenced the updated Framework in its guidelines, and CDSB received two important awards from the global accounting profession in 2016 acknowledging these efforts.

Our network

I couldn’t possibly reflect on the past 10 years without acknowledging some of the key players who have gone beyond their call of duty to assist CDSB in achieving its mission. 

I am known to joke about the thousands of hours the CDSB community has spent discussing organisational boundaries and other technical challenges associated with our work. However, there is one man whose efforts in writing the initial Framework and leading CDSB’s Technical Working Group through two more framework iterations, and the expansion to natural capital, are nothing less than heroic. Without our Technical Working Group Chair Gordon Wilson, Mark Carney and Michael Bloomberg’s team would have had a lot more work to do. 

The voluntary contributions of the Technical Working Froup members have allowed CDSB to publish such high-quality market ready material with the constrained resources of an NGO.

It is the CDSB Secretariat’s role is to coordinate all the activity of the board, technical working group and deliver the strategy and work program. At this moment in CDSB’s history I would like to take this opportunity to acknowledge the dynamic and energetic staff, both past and present, that have worked tirelessly to ensure that CDSB could achieve the milestones it has to date. I would also like to recognise the efforts of the army of ambitious, hardworking interns that have assisted our Secretariat over the last 10 years – they have enabled the small Secretariat to punch well above its weight and achieve the success we have enjoyed.

When you spend 10 years creating a great technical product and developing best practice, eventually someone will catch up with you. And in CDSB’s case, it was Mark Carney, Governor of the Bank of England establishing the Task Force on Climate-related Financial Disclosure and lending the much-needed authority to the efforts of CDSB’s community. CDSB has their back and I look forward to continue working with companies, regulators and wider stakeholders to build resilient financial markets.

In the past 10 years, CDSB grew from just an idea to a global organisation providing the technical rigour to advance corporate reporting and evolve the way financial markets operate. It has been a pleasure to working with you to make this happen and I look forward to working with you all to deliver CDSB’s work when I return to the office from maternity leave in the summer.

This speech was delivered by Mardi McBrien on 9 April 2018 at the launch of the CDSB Framework for reporting environmental information, natural capital and associated business impacts.