Companies need to face up to the realities of climate change and the risks that it poses to their long term interests. Environment and Climate Change Minister Ian Pearson, addressing a meeting of US businesses in New York on 9 May, said that a business's vulnerability to the threats of climate change is of increasing concern to investors and shareholders. Companies need to respond to this to stay ahead.

He commented: "In the future I expect a company's carbon statement to be as prominent as its financial statement. That is because investors are increasingly demanding reliable information about a company's global carbon footprint, as well what it's doing to reduce its CO2 emissions. Proper financial reporting is a no-brainer. Carbon reporting must be the same.

“Climate change already poses risks to businesses - and these will only increase. Climate change can affect a corporation's profitability, and investors are right to be asking questions about how businesses are facing up to the reality, as well as the business opportunities, of climate change. This is not a box-ticking exercise. 'Green wash' is of no use to investors when making financial decisions.

Environment and Climate Change Minister Ian Pearson

"Climate change already poses risks to businesses - and these will only increase. Climate change can affect a corporation's profitability, and investors are right to be asking questions about how businesses are facing up to the reality, as well as the business opportunities, of climate change. This is not a box-ticking exercise. 'Green wash' is of no use to investors when making financial decisions."

The UK's Department for Environment, Food and Rural Affairs (DEFRA) is supporting the Carbon Disclosure Project (CDP), and will work as secretariat to the Climate Disclosure Standards Board to agree and advocate a generally accepted international framework for carbon reporting by corporations. CDP already acts on behalf of institutional investors to request information from corporations about their greenhouse gas emissions and plans to manage those emissions.

“Climate change knows no borders. A company's emissions in Africa may soon reflect on its profitability in the US.

Environment and Climate Change Minister Ian Pearson

Pearson warned that: "Climate change knows no borders. A company's emissions in Africa may soon reflect on its profitability in the US."

The launch of the Climate Disclosure Standards Board (CDSB) was announced at the annual meeting of the World Economic Forum at Davos, Switzerland on 26 January 2007. The CDSB aims to agree and advocate with relevant stakeholders a generally accepted international framework for reporting by corporations with respect to climate risks and opportunities, carbon footprints and carbon reduction strategies.