Shakespeare wrote in The Merry Wives of Windsor that "the world's my oyster, which I with a sword will open ". The literary genius of the Elizabethan era clearly was not writing about the global warming of today, but his words do provide a useful analogy.
For the past 12 000 years or so, depending on whom you believe, since the last ice age the world has been an oyster with a healthy, "closed" environment that has maintained this most wonderful and precious pearl and has produced the conditions required for fauna, flora and, of course, the human race to flourish.
This happy arrangement continued arguably until the Industrial Revolution began in Europe in the 19th century and humans set about, among other things, opening the oyster with mining and other extraction methods to provide material and fuel to build and power the new age. Deforestation, on a scale never seen before, has taken place to provide room for agriculture and habitation.
Many of us, alive to the threat of global warming, are playing our part in slowing down the process by recycling glass, paper and cans, developing compost heaps and attempting to limit our waste, while governments bicker about who is to blame and what is to be done.
Investors' roles
As shareholders and investors, is there anything that we can do, or should be doing, about global warming? The simple answer is a resounding yes.
I am not a proponent of vast amounts of regulation that are difficult to enforce and costly for companies to implement, but the time has come for public and private companies to apply their minds to issues around global warming and environmental reporting.
It is appropriate for all companies to voluntarily institute some kind of environmental reporting to help shareholders make informed investment decisions. In fact, this is something that shareholders should insist on.
Most companies' activities affect the environment, and companies should thus disclose their major environmental risks. Where possible, companies should set measurable targets - in rands or quantity - to reduce their harmful impact on the environment. Performance should be measured against a company's benchmark, and the results should be reported on a regular basis.
Environmental costs
It would also be useful for companies to provide information on the costs that relate to categories such as energy consumption, toxic releases, the treatment and disposal of waste, the rehabilitation of land, compliance with environmental law, recycling, packaging and the like. Consideration could also be given to whether these disclosures require auditing.
A company's annual report is the ideal place to furnish such information. It could be incorporated into the chairman's or directors' report, the management overview or the notes to the financial statements, or the information could be more prominently featured in a separate section dedicated to environmental issues.
As time passes, people are going to become more and more concerned about climate change and its causes.
Shareholders are increasingly going to look for information about a company's environmental policies when deciding whether to buy, hold or sell its shares.
Environmental reporting is also a way for companies to defend their management of the environment.
Billiton's climate change policy
Many companies are alive to the challenge of environment stewardship.
In June it was reported that multinational corporation BHP Billiton has committed $300 million (about R2.1 billion) over the next five years to developing technology and implementing programmes that will help it to reduce its energy use and greenhouse gas emissions. Billiton's new policy on climate change aims to reduce the energy intensity and the greenhouse gas intensity of its products by 13 percent and six percent respectively by 2012. This follows the 12-percent reduction in greenhouse gas intensity that it achieved in the four years to 2000.
Billiton's announcement came hard on the heels of the decision by European countries, Japan and Canada at the Group of Eight summit last month to halve their greenhouse gas emissions by 2050 to combat global warming.
It is wonderful to see Billiton's commitment to increasing its understanding of its products' emissions over their life cycle; to improving the management of its energy consumption and greenhouse gas emissions; to working with customers, communities and employees to support emission reductions; and to working with governments and other stakeholders on appropriate policies.
Billiton is not operating in a vacuum, and many companies are embracing a similar approach to the environment. This is to be welcomed, and shareholders should be pleased to read about these developments in the annual reports of the companies in which they are invested.
The world is indeed our oyster, which has been prised open, and all that is left for us to do is damage control. Corporates need to come to the party to avert the catastrophe that future generations will have to confront if we do not act now.
- David Sylvester is the chairman of the Shareholders' Association, telephone 021 686 7567.