In January, policy makers, government agencies, and companies took advantage of the New Year spirt by recommitting to goals, setting targets, and measuring results in the environmental arena. Earlier this month, the Obama administration built on 2014’s advances in climate change policy—an effort the President reaffirmed during his 2015 State of the Union address— with a plan to limit methane emissions and the announcement of a federal “model rule” for states that don’t file carbon-cutting plans. In Canada, Ontario got closer to revealing its plan for carbon-pricing, and plans to unveil its strategy later this year.
In response, many companies are taking time assess their environmental impact, develop reduction strategies, and report on their performance. Those that do will not only be armed with the necessary information to shrink their carbon footprint, they will also have a better understanding of potential risks to their business and opportunities for innovation. Furthermore, companies that disclose environmental performance metrics may boost their bottom line, as research indicates that analysts are increasingly using environmental, social, and governance (ESG) information to inform their decisions. The financial benefits of transparency hold true even during market crisis, as the liquidity of transparent firms is more predictable (and thus attractive to investors).