Carbon-emissions reporting is a laborious undertaking that publicly exposes potentially serious liabilities and risks facing your business—and it’s voluntary. So why do it? We explored that question with Alyson Slater, the director of strategy at Global Reporting Initiative, an Amsterdam-based organization that has developed the most widely used framework of reporting principles, guidance and standard disclosures on environmental, social and economic performance.

Why should businesses care about voluntary reporting on carbon emissions?

                It’s the fiduciary duty of any company to ask, “Is this issue important to our stakeholders?” Today it is very difficult for a company to say that greenhouse gas emissions are not a subject of material interest to stakeholders.

                If you’re a supplier to Wal-Mart, you have to answer yes. If you’re in the oil and gas business, you have to answer yes. If you’re a company looking for good access to capital markets, where more and more investment firms are considering climate-change impact as part of a company’s risk profile, you have to answer yes.          

                Whatever sector or business you’re in, disclosure is increasingly expected, and failure to disclose can put you at a strategic disadvantage.

How does the reporting process help a company address climate-related risks?

                Companies quickly realize that reporting can’t happen without strategy development. As firms start the process of putting a report together—talking to stakeholders, examining core businesses—they’ll have to back up and ask, “What is our strategy on climate change anyway? What is our approach to managing this risk?”

                The discipline of sorting out which activities are material to report on and in what depth, and what data will be used to document progress, forces companies to formulate strategies. For companies that haven’t been engaged in climate change and need to catch up with competitors that are disclosing, the reporting process is a stimulus for opening up a dialogue with stakeholders about the issue.

                Just as important, the report serves as an accountability mechanism. It allows a company to make commitments and show through performance that it is doing what it said it would do. If you think about the “plan, do, check, act” cycle of corporate management, reporting provides the check: Here are our goals; here’s the system we’ve put in place. Now let’s see how we’re progressing and where we need to readjust.

Aren’t disclosures of potential trouble areas risky?

                Companies’ natural instinct, which we’ve seen across the board, is to avoid public disclosure on potential risks, whether it’s greenhouse-gas emissions or something else. But we’ve also seen how reporting creates a communications avenue through which companies can effectively and accurately position themselves with their stakeholders—investors, customers, regulators and so on.

                You can’t walk through an airport in Europe, for example, without seeing a BP poster for its “Beyond Petroleum” campaign. In this initiative, BP draws on hard facts from its reporting process as it works to shape the carbon-emissions debate and position itself as a leader in renewable energy sources. It’s using report data—this is not greenwashing—to demonstrate its nimbleness as a company to adapt to emerging risks and be on the cutting edge of new opportunities.

From a governance standpoint, how much weight should information from the reporting process carry?

                It’s a primary responsibility of the board and the CEO to determine the implications of their company’s future climate risks and (a) report them and (b) mitigate them. Companies are adept at assessing their financial performance, but too many are afraid to look in the mirror and face potential risks that could damage their business. Directors want to know that a company will be as competitive over time as it is in the short run. That requires looking beyond the quarterly financial results.

                Financial reporting of course allows you to understand only a certain slice of a company’s true market capitalization. Consider Coca-Cola: 2096 of its market cap can be attributed to its book value, that is, its hard assets. Eighty percent of its value is attributed to intangibles—brand, R&D, risk management, ability to innovate in a globalizing and resource-constrained world—all things that are not captured in a financial statement. Sustainability reporting focuses squarely on those areas, which businesses traditionally have not done a good job of understanding and managing.                 

Christina Bortz is an editor at Harvard Business Review.

Leading Change in Latin America

While it may be tempting for companies in developing countries to focus on growth and profits before they even begin to address climate change, our organization is finding that sustainability actually confers competitive advantage. At Masisa, the $886-million forestry and wood manufacturing company in Chile where I oversee social and environmental responsibility, a key part of our strategy is to engage business-to-business customers in our efforts to become greener.

CONVERSATION:  Alyson Slater, Global Reporting Initiative’s director of strategy, on how disclosing emissions benefits companies

Carbon-emissions reporting is a laborious undertaking that publicly exposes potentially serious liabilities and risks facing your business—and it’s voluntary. So why do it? We explored that question with Alyson Slater, the director of strategy at Global Reporting Initiative, an Amsterdam-based organization that has developed the most widely used framework of reporting principles, guidance and standard disclosures on environmental, social and economic performance.

UPS at 1OO

On the occasion of United Parcel Service’s (UPS) 100th birthday, many people have asked me how a company that began as a small US messenger service evolved to become a world leader in transportation and logistics.

Winning: The long road from public sector to private business

Q: I have a master’s degree in Public Administration and have worked in government for 13 years, but I am thinking about making the leap to the private sector. Any advice? Cynthia Whitbred-Spanoulis, Virginia Beach, Virginia                 

A: Forget everything you know.

Crackdown

BANGKOK—Myanmar’s military rulers imposed a nighttime curfew and banned assemblies Tuesday after thousands of Buddhist monks defied their warnings and mounted another day of prodemocracy protests to the cheers of crowds in the streets of Yangon.

Lawfare doctrine

MAJOR General Charles J. Dunlap Jr., the US Air Force’s deputy advocate general, defined lawfare as “the strategy of using or misusing law as a substitute for traditional military means to achieve an operational objective.” 

48 hours in China with Tony Meloto

I am writing this article on a Philippine Airlines (PAL) flight from Beijing to Manila after a two-day whirlwind trip to Shanghai and Beijing with Antonio Meloto, the moving spirit behind the Gawad Kalinga (GK) movement.

Meloto Reflections

Tony Meloto’s moment of truth occurred in 1999, as he was agonizing on whether he had reached a point when he was denying his family precious time as he dedicated increasingly more of his life to Gawad Kalinga (GK).

Innovate faster by melding design and strategy

If they’re to do their job most effectively, designers should be brought into the innovation process at the very earliest stages. Too many companies still make the mistake of keeping business strategy and design activities separate.

CONVERSATION:  Outdoor-apparel start-up Ceo Chris Van Dyke on new ways to feed customers’ passions

Nau, a fledgling US retailer of high-performance outdoor apparel, does everything backward. It designed its web site before building a single store; it encourages customers to buy less; and it markets by not talking about itself.

Best practices Green Bag it

The bayong became relevant once more when SM and Unilever Philippines recently joined hands to introduce to the public a reusable shopping bag as part of their campaign to promote environmentalism in the country.

Winning: Creative employees need creative management

Q: What’s the best approach for leading creative people, and does it really differ from leading everyone else? Joe Burke, Los Angeles                 

A: In a word, yes.

Entrepreneur: The dish on Rai Rai Ken

Rai Rai Ken Ramen House and Sushi Bar has come a long way from its humble beginnings as a small and modest tea house in Makati City. It now boasts of 30 outlets all over the Philippines, and still growing. It takes pride in its tradition of serving authentic Japanese food, especially ramen or Japanese noodles, which is really its specialty.

SOS CHILDREN’S VILLAGES PHILIPPINES

Tommy was just a day old when he was found at the entrance of a town church in Batangas, wrapped in newspapers and placed in a box. His finder could tell he was newly born from the fresh umbilical cord dangling from his tiny body.

Confessions of a Sociopath

The author of the above quotation is either a physician who doesn’t want to be suspected of professional jealousy or a cynic who doesn’t want to be taken to a mental institution.

The grace of being Lean Alejandro

How does one write about a man whom one hardly knew beyond the official and professional? How does one tell his story especially to a generation 20 years removed from the time he walked this earth? How does one even venture to share what and how he thought of a world that changes so much and yet remains ever so the same? 

Block that defense: how to make sure your constructive criticism works

Why do top executives have difficulty receiving and responding to constructive criticism? Because so many high-fliers have received little criticism in their careers. As Chris Argyris, director emeritus of the Monitor Group (Cambridge, Massachusetts) and the James Bryant Conant Professor of Education and Organizational Behavior Emeritus at Harvard Business School, writes in “Teaching Smart People How to Learn,” a 1991 Harvard Business Review article, “Because they have rarely failed, they have never learned how to learn from failure.”

How they did it: charge what your products are worth

In a world with too many choices, aligning a product’s price with its perceived benefits is critical—but many companies seem to miss this simple point. A good question for any company to ask itself is “What would Goldilocks think?” Instead of offering too few benefits—or too many—for a stated price, they must perfectly align benefits and price across the product category and the brand portfolio, finding the combination that is “just right.”

Brain gain

(Last of five parts)

It’s easy for Filipinos to decide to leave the country to seek greener pastures. It’s much harder for these Filipinos, used to working abroad and earning sizeable sums, to come back.

Talent Search

(Fourth of five parts) 

Today’s companies face five critical business challenges: globalization, technology, the quest for profitability through growth, intellectual capital constraints and the exigencies of continuous change. Regardless of their industry, size or location, these challenges require these organizations to continuously build new capabilities—a responsibility which, University of Michigan School of Business professor Dave Ulrich writes, human resources (HR) should embrace for these organizations to last.

Civil Servants No More

(Third of five parts)

Jenny Balatbat left for the United States to teach kindergarten pupils, leaving behind her job as a teacher at the San Gabriel Elementary School in Bulacan.

Employee-Retention Strategies

(Second of five parts)

MANAGING talent has become more essential to the private sector than it used to be. Companies are now beginning to dig up insights into managing talent that should allow them to deal with brain drain in a more organized way. What is bold, they say, is to make lemonades when life gives you lemons.

THE WAR FOR TALENT

(First of five parts)

When the management of Fairchild Semiconductors, a global electronics firm, offered industrial engineer Manuel Villa, 32, a management job in Singapore three years ago, he didn’t hesitate to grab the offer.