GHG Reporting and Rio+20 – an international context

Institute of Environmental Management & Assessment (IEMA) executive director of policy, Martin Baxter, considers how delaying the decision on mandatory carbon reporting will impact on international sustainability commitments.

Government’s failure to make a decision on mandatory carbon reporting last week rightly drew widespread criticism from business and environment groups alike. The claim that ministers needed more time to decide – as if the four years that’s elapsed since the 2008 Climate Change Act received Royal Assent wasn’t enough – was met with deep scepticism and frustration.

The failure to decide is disappointing, not least because the clear business and environmental benefits that would flow from a positive decision are at best delayed if not lost altogether. However, when viewed in a broader context, then the decision not to go ahead is even more concerning.

This summer will see world leaders coming together at the United Nations Rio+20 Earth Summit. The focus of discussions will be around two main themes:

·how to build a green economy to achieve sustainable development and lift people out of poverty, including support for developing countries that will allow them to find a green path for development; and

·how to improve international coordination for sustainable development.

The first draft of the Rio+20 agreement contains a series of commitments which countries will be invited to sign up to. Under the section on Renewing Political Commitment is the call for: “a global policy framework requiring all listed and large private companies to consider sustainability issues and to integrate sustainability information within the reporting cycle.”

However, since the so called ‘Draft Zero’ commitments have been published, there have been growing calls for the text to be strengthened, including that relating to reporting. The World Business Council for Sustainable Development (WBCSD) has called for the inclusion of “the explicit requirement for companies to adopt standardised, rules-based sustainability reporting.”.

The UN Secretary General’s High Level Panel on Global Sustainability
takes it much further in its report Resilient People Resilient Planet – A Future Worth Choosing, including the recommendation that “business groups should work with governments and international agencies to develop a framework for sustainable development reporting, and should consider mandatory reporting by corporations with market capitalizations larger than $100 million”.

But we don’t need to look to the international community for support for corporate reporting, political support can be found much closer to home.

In setting out the UK Government’s aims for Rio+20 on February 9 2012 , Caroline Spelman said in a speech that “We want action to ensure that businesses and governments factor sustainability into every decision they make- and for this to be transparent. So we will join the call for Rio to drive uptake of sustainable business practices – in particular transparent and coherent sustainability reporting.”

So that’s clear then. On the world stage, the Government is happy to extol the virtues of corporate accountability and transparency and key elements of ‘responsible capitalism’ ….but when it comes to deciding on whether to introduce a requirement on companies to report on their carbon emissions… needs more time.

The consequence of this is clear – the UK’s influence and credibility in International negotiations is being eroded, if not being fundamentally undermined, by the approach it is taking on this issue domestically.

While there are some who believe that a decision on GHG reporting needs to be considered in the context of the announcements to simplify, or scrap, the Carbon Reduction Commitment (CRC), in its report to parliament explaining why it hadn’t brought forward regulations no mention of the CRC was made.

Interestingly, the parliamentary report makes clear that a final cost benefit analysis on the options for reporting has been completed following the consultation process. Given that Government has the evidence on which to make a decision, it’s difficult to understand the reasons for the delay.

Of course, there is time before the Rio+20 Earth Summit in June for the government to put forward proposals for the introduction of mandatory reporting of GHG emissions for companies….it just requires political leadership.

IEMA’s Climate Change Position Statement can be viewed here.

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