The government should strengthen mandatory carbon reporting now that it has pledged to retain it, business and investor organisations have said.
The regulation, introduced in 2013, requires all quoted companies to report greenhouse-gas (GHG) emissions. The government had threatened to scrap it as part of a review of business energy efficiency taxes due to a desire to create a more simplified reporting system.
Although continued disclosure of emissions was supported by the energy and climate change department and the Treasury, the business department (BIS) wanted to remove it to reduce the regulatory burden on business, sources said. But, in a document released alongside the Budget, the Treasury said the regulation would be retained.
The creation of a taskforce to develop recommendations for the G20 on disclosure of climate-related risk, announced by Bank of England governor Mark Carney at the Paris climate talks, was ‘definitely one of the reasons’ the government changed its mind on the issue, according to Paul Simpson, chief executive of the CDP.
Pressure also came from businesses and organisations including IEMA, the Aldersgate Group and the Institutional Investors Group on Climate Change. They wrote to chancellor George Osborne stressing the value of disclosure.
‘It’s great that the government is listening to corporations and investors. Normally it is driven by ideology,’ Simpson said.
Changes to the reporting obligations could come through either a Treasury consultation later this year on a single energy and carbon reporting system for business or a current consultation by BIS on non-financial reporting, which will close on 15 April.
Michael Zimonyi, senior project officer at the Climate Disclosure Standards Board, said the current GHG reporting requirement should be expanded by clarifying what firms should report, so investors can compare data from different companies.
Kate Levick, director of policy and regulation at the CDP, said qualitative information, such as exposure to climate change-related risk, should be included.
The Treasury also outlined proposals for a single reporting framework, the detail of which will be consulted on later this year. It plans to abolish the carbon reduction commitment from 2019, and integrate the compliance and reporting requirements of climate change agreements, the energy savings opportunity scheme and the EU emissions trading system.
