Share your carbon-adjusted earnings per share, underpants • CableFree TV

Published by
Peter Kavinsky

To judge by my inbox (trust me, it is), companies, and especially the listed mega-corporations, are struggling to ennoble each other with tales of how the planet will breathe a sigh of relief because glorious governance that they provide for our slowly warming planet. Eenvironmental, social and governance (ESG) goals are reported with great enthusiasm, but few companies link them directly to profits.

There is an old truth in journalism that people cannot understand distances longer than a football field and cannot understand numbers larger than their mortgage. PR professionals know this. again and again the public is excited by the numbers. “Wow, company X has invested 10 million dollars in the fight against climate change!” means that we collectively treat company X with warmth and fuzziness. Few of us stop to consider how Company X could have spent that $10 million, and when it turns out it’s only part of the marketing budget, it often becomes clear that “green initiatives” are marketing costs, not planetary improvements. .

For people who believe we’re on a timeline as we approach the late stage of a post-apocalyptic capitalist hell where humans are cogs and the planet is about to be looted, the only meaningful measurement of climate is when it balances out the only real measure that matters. corporations: profit. And, in particular, profit as an intermediate indicator of the value of the company’s shares.

A few years ago, Danone began to report your carbon-adjusted earnings per share (CAEPS, very catchy) by directly linking your carbon emissions to earnings with an easy-to-understand formula: Calculate the “cost” of your greenhouse gas emissions, divide it by the number of shares, and subtract that from your earnings . This is bold, especially if top management is willing to stick with those numbers for the long haul.

“Danone has released voluntary carbon-adjusted earnings per share (EPS) reporting for the first time, demonstrating to shareholders that our carbon-adjusted earnings per share (EPS) will grow faster than expected as peak emissions are behind us – and faster than ours. earnings per share would rise without adjusting for carbon emissions. ” wrote former Danone CEO Emmanuel Faber in an article about The B Team. “This expanded our ability to pay dividends without compromising the company’s long-term investment in regenerative agriculture. Yet, three years later, this attempt remains a relative anomaly in the business landscape.”

It seems that Faber went a little too far, because he fired as CEOreported due to its strong climate and environmental slope, after four years at the helm of the French food giant.

The lead in implementing CAEPS was strong, but it certainly didn’t catch on – there are only three mentions of it in the Financial Times. site-wide climate-adjusted earnings per share, and they are all associated with Danone. Other companies report this as well; S&P Global does, and many other companies have other ways to report their carbon emissions. The specifics of the metric and how it’s called may have failed, but it’s extremely telling that there seemed to be little desire in the industry to adopt a standardized, profit-linked metric for greenhouse gas emissions. It’s hard to interpret this as anything other than a staggering lack of appetite for really signing on to the triple principle approach (planet, people, profit) and indicates an extreme amount of hot air compared to the desire to do something real. , meaningful. change.

Sure, measuring carbon emissions up and down your supply chain can be difficult, but “difficult” is no excuse for not trying and getting enough data to be able to make educated guesses about the parts of the supply chain you use. full visibility is not enabled. By measuring—and insisting on reporting from your suppliers as part of the purchasing and billing process—companies have the opportunity to be part of a cultural change chain. And over time, I hope it will be more difficult to significantly underreport (Amazon, I’m looking at you…) as soon as companies normalize reporting standards, it becomes easier to compare similar indicators.

If you are starting a startup, you have the opportunity to incorporate carbon into your KPIs and report regularly to your board of directors. As your company grows, stay the course and keep communicating it. This is one of the perks of being a startup founder: you have the opportunity to show that you care and run a carbon neutral (or hell, set yourself higher goals and try to be carbon positive) company. it’s a pretty decent place to start.

Peter Kavinsky

Peter Kavinsky is the Executive Editor at

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