This article is sponsored by HP.

For stakeholders to assess and compare the risks and opportunities of companies operating amid intensifying threats of climate change, there must be measures of accountability underpinned by transparent, standardized reporting.

The regulatory regime is quickly evolving around the world as investors, customers, employees and other stakeholders increasingly demand this higher degree of corporate transparency. For example, the EU’s proposed Corporate Sustainability Reporting Directive would give "comparable status" to sustainability and financial reporting. In the U.S., the Securities and Exchange Commission’s (SEC) proposed climate disclosures would require disclosure about material financial risk posed by climate change, assured greenhouse gas (GHG) emissions and more.

These emerging regulations can be important levers in holding companies accountable for helping address the threats of climate change. They are especially relevant in understanding the totality of emissions that are upstream and downstream in a company’s value chain (known as Scope 3 emissions).

By their nature, Scope 3 emissions are significantly harder to measure and disclose reliably, often making their reporting less transparent and comparable. This matters because they are often, by far, the largest part of a company’s total footprint.

HP strongly supports greater transparency and standardization to provide investors with consistent, comparable and reliable climate-related disclosures. Standardization isn’t just important for transparency about a company’s risks — at HP, we also see a role for standards that facilitate the reporting of opportunities for innovation, transformation and market entry presented by the low-carbon transition. We believe this would give interested stakeholders a fuller understanding of a company’s total climate exposure and resilience — as well as its potential for growth.

We also want to see new standards leverage existing robust and accepted frameworks, such as those provided by the Task Force on Climate-Related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB).

Standardizing reporting for better comparability

As sustainability leaders, we know that disclosure can, at times, be challenging, but it is vital if we are to achieve the shared accountability and scale of change needed in this truly critical decade. The process itself also enables us to properly understand our own impacts and identify where we need to invest and accelerate our actions.

In June, HP published its 2021 Sustainable Impact Report, marking our company’s 21st year of sustainability reporting. With each passing year, the need and expectation for urgent and measurable action by companies such as ours grows stronger. We recognize the need to respond with more transparency regarding HP’s operations, more precise metrics about the company’s impact and more targeted work to address any gaps.

For 10 years, EY has assured HP’s Sustainable Impact Report, in 2021 verifying 10 metrics spanning Scope 1, 2, and 3 emissions. HP continues to align its reporting with frameworks such as the Global Reporting Initiative Sustainability Reporting Standards, UN Global Compact, SASB, TCFD and World Economic Forum’s Stakeholder Capitalism Metrics. And this year, HP is implementing even more robust auditing for HP’s disclosures, leaning on our company’s approach to financial reporting.

To make sure HP responds to the right issues, we carry out a biennial materiality assessment. In 2021, we employed "double materiality," which looks both at how an issue affects a company and at how the company affects it. This allows us to better identify the ways HP can make a meaningful impact on the issues of most importance to our business.

Embedding purpose into your business

Wherever your company is on this journey, one of the first and most important steps you can take is to ensure that you have purpose firmly embedded into the core of your business strategy. Next, it’s important that everyone — from the C-suite through every job function — understands your company’s vision, has a role in delivering on the strategy to achieve that vision, and considers it a business imperative. In this way, proper investments can be made that align with your business purpose while better preparing your company to meet heightening regulatory requirements.

HP’s vision is to become the world’s most sustainable and just technology company. It’s a bold, audacious aspiration backed by a comprehensive goals agenda that spans climate action, human rights and digital equity. Among these goals is a commitment to reduce HP’s entire value chain GHG emissions by 50 percent by 2030, compared to 2019, and to reach net zero by 2040. Through 2021, HP had achieved a 9 percent reduction — even as the company’s net revenue increased by 8 percent in the same period.

For leaders who are still skeptical that doing well and doing good can be synonymous, consider this: HP’s Sustainable Impact initiatives helped the company win more than $3.5 billion in new sales in fiscal year 2021—a threefold increase over the prior year. We know when we innovate with purpose, we create the conditions for both business and society to thrive.

On the road to net zero, we have set interim 2025 targets at HP, including goals to reduce the company’s Scope 1 and 2 GHG emissions by 60 percent, use 100 percent renewable electricity in HP operations, and reduce HP product-use GHG emissions intensity by 30 percent. Tracking and reporting progress against these goals — 59 percent, 54 percent and 39 percent, respectively — enables us to demonstrate impact from the company’s investment and more readily identify any potential gaps.

Beyond HP’s own operations and those of product use, which combined account for about one-third of the company’s carbon footprint, we extend our efforts to HP’s supply chain so that we can address the larger share of HP’s footprint. One way we do this is by engaging closely with HP’s suppliers to set their own science-based targets, using Supplier Responsibility Scorecards to set expectations and drive improvement. We also request 98 percent of HP’s production suppliers, by spend, as well as strategic nonproduction suppliers, to disclose through CDP.

To drive broader change, we also engage in advocacy and join others in emissions-reduction efforts, policy engagement and goal setting. For example, to support local demand for renewable energy in countries where some of HP’s suppliers are based, we worked with the U.S. Department of State through the Clean Energy Demand Initiative to encourage the governments in these target countries to increase investment and innovation to make clean energy more available and affordable.

To ensure these efforts — and those of companies everywhere — are driving toward the impact we need in this critical decade, we believe that consistent and comparable reporting is necessary. By holding ourselves and others accountable for progress using common measures, we can meet the challenges with better clarity and understanding, drive innovative solutions rooted in insights aligned with the best climate science, and close the gaps that inhibit progress toward achieving a more sustainable and just future for all.