Tech

Share your carbon-adjusted earnings per share, coward


If my PR inbox doesn’t matter (trust me, it does), corporations, especially stock market-listed megacorporations, tell stories about what causes the planet to breathe a sigh of relief. So, they are fighting each other to take the green.They are the glorious custodians who provide for our slowly heating planet.Environmental, social and governance (ESG) goals are reported with great joy, but few companies directly link them to bottom line.

There’s an old truism in journalism that people can’t comprehend distances longer than a football field, and numbers bigger than a mortgage. Again and again, the public is fed up with numbers. “Wow, Company X is investing $10 million in climate change!” This means that we are collectively being positive and obscure about Company X. Few people stop to think about how Company X was able to spend him $10 million. Clarify that “green initiatives” are marketing costs, not global environmental remediation costs.

We are in a timeline where we think humanity is a cog and heading towards a late apocalyptic capitalist hellscape where the earth is out there to be mined bare For those who believe, the only meaningful climate measure is the one that balances it.The only real metric that companies care about is profits. Specifically, earnings as an intermediate indicator of a company’s stock price.

2-3 years ago, Danone starts reporting Carbon Adjusted Earnings Per Share (CAEPS, very catchy) ties carbon emissions directly to earnings in an easy-to-understand formula. Calculate the “cost” of your greenhouse gas emissions, divide it by the number of shares, and subtract it from your income. Bold, especially if the senior leadership team is willing to stand by these numbers over the long term.

“Danone has pioneered voluntary ‘carbon-adjusted’ earnings per share (EPS) reporting, showing shareholders that carbon-adjusted EPS is growing faster than expected. Because the peak of emissions has already passed.” I have written Former CEO of Danone, Emmanuel Faber, speaks in an article for The B Team. “This has increased our dividend capacity without compromising the company’s long-term investment in regenerative agriculture. But three years later, the effort remains a relative anomaly across the business environment.”

It just seems like Faber went a little overboard. ousted as CEOreportedly due to his strong climate and environmental penchant after four years at the helm of a French food giant.

The leadership in the introduction of CAEPS was strong but not entrenched — the Financial Times Climate-adjusted earnings per share for the entire site, and all related to Danone. There are other companies reporting it. S&P Global do, and many other companies have different ways of reporting their carbon emissions. Details of the metric and what it is called may have been a failure, but that there seems to be little industry appetite for adopting a standardized revenue-linked metric of greenhouse gas emissions. It’s nothing short of an astounding lack of desire to actually sign up for the triple bottom line approach (planet, people, profit) to make it real and meaningful. It’s hard to read as referring to an unusual amount of enthusiasm for the desire to change.

Of course, measuring carbon emissions upstream and downstream in the supply chain can be difficult, but “difficult” is no excuse not to try. Nor can we get enough data to make an educated guess about which part of the supply chain. No full visibility. By measuring, and by requiring reports from suppliers as part of the procurement and billing process, companies have the opportunity to become part of the chain of cultural change. , hopefully making it harder to underreport significantly (Amazon, I’m watching you…) when companies standardize their reporting standards, it facilitates like-for-like comparisons.

If you run a startup, you have the option to incorporate carbon metrics into your KPIs and report back to your board on a regular basis. As your company grows, stay on course and keep reporting on it. This is his one of the perks of being a startup founder. You have the opportunity to show what you care about and run a carbon neutral company (or, oh my god, aim high and do it to be carbon positive). A pretty decent place to start.



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