Companies must ensure 'data is robust' when reporting GHG emissions
Companies that are affected by the carbon reporting regulation must establish robust systems to measure their greenhouse gas emissions, or risk heavy scrutiny, says WSP.
In July 2012, the Government announced that companies quoted on the main London Stock Exchange, which accounts for over 1300 companies, will have to report on GHG emissions from April 1 this year, reporting from the first financial year and thereafter.
The requirements include reporting total level emissions, including overseas operations and companies must report alongside financial accounts.
Speaking at today's Environmental Legislation Update briefing in London today, WSP associate director, Dan Grandage, told companies: "You first need to establish whether you're affected. If you are, you need to start collecting data and put systems in place to start measuring your carbon emissions and establish a baseline year".
Grandage also encouraged companies to ensure data is robust enough to avoid significant inaccuracies, that could possibly lead to re-evaluating methodology if not to the appropriate standard.
Many companies have expressed uncertainty on exactly what is required and how the data should be gathered. Currently, no standard methodology has been issued and whatever process of reporting is used must be disclosed.
Carbon reporting legislation also excludes a verification requirement, which many could argue will add great discrepancies amongst companies.
Talking to edie, Grandage said because verification is currently not required when reporting on GHG emissions, the potential for inconsistency and inaccuracy is high.
"Although not currently dictated in the legislation or guidance, external verification is quite likely in the future, so be prepared. Make sure the systems you put in place will stand up to external verification. As quite rightly this information will be audited by the proper accountants or external verifiers," said Grandage.
Yesterday, edie reported that many of Europe's major electric utility companies are not following reporting guidelines for environmental and social performance, despite claiming to abide by the Global Reporting Initiative (GRI).
According to a study looking at the sustainability reporting of 19 European electricity utility companies against 10 labour-related indicators, there are significant discrepancies between what companies claim they are reporting on within the GRI Framework and what they actually report on.
However, having to state what reporting protocol a company uses will limit discrepency when it comes to the carbon reporting legislation, added Grandage.
"The recording of GHG's is going to go through the directors report and will probably go out into the public domain. So there is potential risk of discrepancy but these factors mentioned should curb that".
Another aspect, relating to the importance of accurately reporting a company's GHG emissions, was research, released yesterday, by the Carbon Disclosure Projects (CDP), which shows that the select few multinational companies who are successfully reporting on carbon emissions are making substantial savings financially and in terms of emissions.
The study shows that these companies are more than twice as likely to accomplish year-on-year emissions reductions, with 63% who report compared to 29% who don't, and are better positioned to capitalize on the financial benefits of carbon management.
It found that 70% of companies believe that climate change has the potential to affect their revenue significantly.