Carbon emissions reporting to be mandatory for listed companies
Confirmation last night by Deputy PM, Nick Clegg, that companies listed on the London Stock Exchange will be required to report on their carbon emissions from next year has been welcomed by organisations such as the CBI, Aldersgate Group and the Institute of Environmental Management and Assessment (IEMA).
All FTSE businesses will have to report their levels of greenhouse gas emissions from the start of the next financial year under plans announced by the Deputy PM at the Rio+ 20 Summit. The UK is the first country to make it compulsory for companies to include emissions data in their annual reports.
The new regulations will be introduced from April 2013 and then reviewed in 2015, before ministers decide whether to extend the approach to all large companies from 2016.
CBI director for business environment policy Rhian Kelly, said the announcement was to be applauded:
“We have been calling for mandatory carbon reporting for some time. It is an important way to help businesses save money and emissions." However, she continues with a call for decisive action on the CRC scheme:
“To avoid unnecessary duplication, the Government now needs to scrap the Carbon Reduction Commitment.”
Aldersgate Group executive director Andrew Raingold agreed: “The vast majority of businesses strongly welcome the introduction of mandatory carbon reporting. This is an area where corporate executives have been demanding more regulation from government to provide greater clarity and transparency.
“Our detailed analysis demonstrates that this announcement will lead to huge cost savings for businesses as opportunities to reduce their energy use become more apparent. Over three quarters of UK adults expect that businesses should be required to report their emissions, as demonstrated by a Populus poll that we published last month.”
IEMA executive director of policy, Martin Baxter said, "This is a welcome decision for UK plc and demonstrates international leadership as part of the Rio discussions. Mandatory greenhouse gas (GHG) reporting will deliver benefits for both the UK economy and the environment, and turn the environment into a mainstream business opportunity."
IEMA says that mandatory GHG reporting for listed companies will initially affect around 1,800 businesses. That's before being broadened out to all large companies by 2015.
"We will not see the full benefits of mandatory reporting until it is introduced for all large businesses, around 24,000," added Mr Baxter. "We strongly urge Government to speed up the process therefore of introducing mandatory reporting to all large companies as soon as possible."
IEMA claims that GHG reporting can deliver significant benefits with around 70% of companies surveyed saying that GHG reporting will deliver cost savings, and 77% saying it will lead to environmental benefits.
"Counting your business costs while hiding your greenhouse gas emissions is a false economy," said the Deputy PM. "British companies need to reduce their harmful emissions for the benefit of the planet, but many back our plans because being energy efficient makes good business sense too. It saves companies money on energy bills, improves their reputation with customers and helps them manage their long-term costs too."