Clegg orders mandatory reporting from 2013

18th July 2012


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  • Mitigation ,
  • Management/saving ,
  • Reporting



After months of delay, the deputy prime minister has confirmed that new legislation will be created requiring some of the UK's largest businesses to reveal the amount of greenhouse gases their operations emit

In a speech at the UN Earth summit in Rio, Nick Clegg announced that from April next year all 1,200 companies listed on the London Stock Exchange will be required to include data on greenhouse-gas (GHG) emissions in their annual reports, with the obligation likely to apply to some 24,000 large UK businesses from 2016.

The government hopes the introduction of mandatory disclosure will encourage companies to improve their energy efficiency.

“Counting your business costs while hiding your greenhouse-gas emissions is a false economy,” said Clegg.

“Being energy efficient makes good business sense. It saves companies money on energy bills, improves their reputation with customers and helps them manage their long-term costs too.”

The new regulation, the first of its type in the world, should save four million tonnes of CO2 by 2021, according to Defra.

Business and environment groups, including the CBI, the Aldersgate Group and Friends of the Earth, many of which have lobbied the government in favour of mandatory reporting over the past year, welcomed the news.

The measure was also supported by more than 90% of IEMA members surveyed in 2010, who argued that forcing firms to report their GHG output would be an important tool to motivate businesses to better manage their emissions.

Martin Baxter, IEMA’s executive director of policy, said: “Mandatory reporting will deliver benefits for both the UK economy and the environment, and turn the environment into a mainstream business opportunity.”

However, he warned that the real benefits of mandating GHG disclosure will not be seen until it is introduced for all large businesses, as the majority of listed businesses already report their emissions.

“We strongly urge government to speed up the process of introducing mandatory reporting on GHG emissions to all large companies as soon as possible,” he said.

IEMA expects draft regulations implementing the policy to be published by the end of July.

Confirmation of the regulatory change has also prompted renewed calls for the Carbon Reduction Commitment Energy Efficiency scheme (CRC) to be scrapped.

David Workman, director-general of the Confederation of Paper Industries, which previously argued against the introduction of mandatory reporting, warned of the dangers of increasing the regulatory burden on businesses.

“The paper industry already has a climate change agreement, we are within the EU emissions trading scheme and we’re subject to the CRC. There is a very real danger of overkill here,” he said. “At a time when Whitehall is supposed to be reducing red tape, we want to know whether mandatory reporting is something new or if it will replace the CRC.”

Rhian Kelly, the CBI’s director for business environment policy, agreed: “To avoid unnecessary duplication, the government now needs to scrap the CRC.”

In a new report on UK environment legislation, the CBI strongly criticised the CRC. “The overwhelming business view is that it is damaging, rather than driving, business investment,” it states.

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