UK becomes first country to introduce mandatory carbon reporting for big companies

Is this a good thing??? or just another added cost for busniesses to increase income Tax??

The Government’s announcement to introduce mandatory carbon reporting for publicly listed companies has been welcomed by business leaders and campaign groups.

All businesses listed on the Main Market of the London Stock Exchange will have to report their levels of greenhouse gas emissions from the start of the next financial year under plans announced by the Deputy Prime Minister at the Rio+ 20 Summit today.

The UK is the first country to make it compulsory for companies to include emissions data for their entire organisation in their annual reports.

The introduction of the reports, following consultations with leading businesses, will enable investors to see which companies are effectively managing the hidden long-term costs of greenhouse gas emissions.

According to the Government, the majority of businesses responding to the consultation support the change and government plans are also backed by leading employer and environmental organisations including the CBI and the Aldersgate Group.

The new regulations will be introduced from April 2013.  They will be reviewed in 2015, before ministers decide whether to extend the approach to all large companies from 2016.

Greenhouse gases, such as carbon dioxide, nitrous oxide and methane are causing climate change leading to global temperature increases, sea level rises and dangerous changes to patterns of drought and flooding.

More than 30 billion tonnes of CO2 are emitted globally each year by burning fossil fuels and the concentration of CO2 in the Earth’s atmosphere is now higher than at any time in at least the last 800,000 years. The UK is committed to cutting UK carbon emissions to 50% of 1990 levels by 2025.

The UK Government says reporting is the first vital step for companies to make reductions in these dangerous emissions. It is estimated it will save four million tonnes of CO2 emissions by 2021.

Deputy Prime Minister, Nick Clegg said: “Counting your business costs while hiding your greenhouse gas emissions is a false economy.

“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.

“Climate change is one of the gravest threats we face. The UK is leading the urgent action needed at home and abroad.”

Rhian Kelly, CBI Director for Business Environment policy, said: “We have been calling for mandatory carbon reporting for some time. It is an important way to help businesses save money and emissions.

“Provided this is done in a sensible way, this announcement is to be applauded.

“To avoid unnecessary duplication, the Government now needs to scrap the Carbon Reduction Commitment.”

And Tom Delay, Chief Executive of the Carbon Trust added: “This announcement is welcome news. Mandatory carbon reporting for companies listed on the London Stock Exchange from April 2013 will encourage even more businesses to reap the benefits of accurately understanding their carbon emissions.

“Measurement helps businesses to gain insight to help them take the right strategic decisions to ensure long term success. The Carbon Trust’s ten-year experience footprinting the carbon emissions of companies shows that reporting, far from being a burden, can help deliver significant cost saving and enhance corporate reputation and new revenue opportunities.

“Over the last decade the Carbon Trust has worked with 75% of the FTSE 100 and carbon-footprinted hundreds of companies globally to help identify risks and opportunities. This work has resulted in 38 million tonnes less carbon emission and £3.7bn costs saving for the companies we have worked with.”

WWF-UK today said that the Government’s plans to introduce carbon reporting for listed companies were a positive step, but that carbon emissions still needed to be tackled with a much greater sense of urgency.

Responding to the announcement David Nussbaum, Chief Executive of WWF-UK, who is attending the Rio+20 summit with the official UK delegation, said: “We’re pleased that the Government has eventually caught up with the requirement in the Climate Change Act to introduce carbon reporting for businesses.

“It’s encouraging that the Government has gone for a mandatory approach, though it is slightly surprising that the Government didn’t extend this to all large companies as the overwhelming business response indicated that they should.

“This is symptomatic of wider foot-dragging on the issue of carbon emissions.  The Rio+20 talks are highlighting governments around the world failing to recognise the scale of the environmental problems we face and not going far enough, and fast enough, to address them.”

The group said moving from voluntary to mandatory reporting was an important symbolic move; but there was a way to go before it addressed the urgency and scope of a true climate-credible response in the face of an ever-accelerating pace of global warming.

Secretary of State for the Environment, Caroline Spelman said: “The discussions we’ve had with businesses show that they want to cut down their greenhouse gas emissions, and they want to be open and transparent about it. What they have asked for is a level playing field so that they can be fairly judged against one another, and we have delivered that today.

“Investors are now looking hard at the green credentials of businesses, and the reporting of green house gas emissions will give them vital information as they decide where to invest their money.”

Secretary of State for Department of Energy and Climate Change, Edward Davey said:

“Energy efficiency is a no brainer. It saves money for businesses whilst cutting carbon to help us meet our climate targets. The introduction of mandatory reporting will build on the regulatory framework established by the CRC Energy Efficiency Scheme for the largest energy users.”

Andrew Raingold, Executive Director for the Aldersgate Group, said: “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.

“This statement should pave the way to extend the requirements to all large companies in due   course and demonstrates genuine UK leadership at the Rio+20 Earth Summit.”

The decision follows the consideration of extensive evidence and the detailed analysis of consultation responses to gain the views of businesses and individuals, the majority of which opted for a mandatory reporting approach.

Businesses said a compulsory approach would:

• Provide the first step in enabling companies to manage and reduce emissions;

• Mean more transparency from companies;

• Provide a single consistent standard; and

• Provide information to the business that could save them money through reduced energy costs.

Leave a Reply

You can use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>