Defra urged to close GHG reporting loophole

18th October 2012


Related Topics

Related tags

  • Reporting ,
  • Management ,
  • EMS

Author

IEMA

The government's proposed regulations mandating greenhouse-gas (GHG) reporting for businesses need to be clearer on reporting scope two emissions, says IEMA

In its formal response to Defra’s consultation on the draft GHG Reporting Regulations, IEMA has warned that there is a potential loophole where emissions between companies could be missed.

At the same time, it has urged the department to refocus its draft guidance for business on environmental key performance indicators (KPIs), saying the current approach fails to adequately capture the business and environmental benefits of reporting against such KPIs.

While broadly welcoming the draft GHG Reporting Regulations, the Institute is concerned over the lack of guidance around the purchase of “green-tariff” electricity, which leaves it unclear which firms can ultimately claim the “carbon benefit”.

IEMA has called on the environment department to amend the regulations inserting a requirement that emissions from electricity consumption should be reported using a grid average. Firms buying electricity on green tariffs would be able to also report their lower emission calculations, but requiring everyone to report grid average emissions will ensure consistency in reporting and minimise confusion, states IEMA.

IEMA also highlights potential gaps in accounting for emissions from stored sources and from land owned by the reporting company, and recommends that the final text should include a statement encouraging firms to report their scope three emissions, while acknowledging that they remain outside the formal reporting requirements.

“The regulations do not mention scope three emissions (understandably), but concerns exist that some companies may deliberately exclude such emissions if they are not referenced at all. For clarity it would be helpful to state that scope three emissions are not covered by regulations but that these can be material issues for some companies and therefore reporting is encouraged,” states IEMA’s response.

The Institute also urges the government to develop new formal guidance to help firms in meeting the reporting requirements, arguing that Defra’s 2009 guidance does not address all the issues that companies will need guidance on.

Meanwhile, in its response to Defra’s draft guidance on environmental KPIs, IEMA is critical of the document’s focus on environmental burdens.

“We do not believe that is the most appropriate method for achieving the principal benefits of reporting; more emphasis needs to be placed on how the key environmental risks and opportunities of a business are being managed,” states the response.

IEMA argues that the guidance should be aligned with the business department’s (BIS) proposals to amend reporting requirements under the Companies Act to have a more strategic focus, and strongly advocates greater collaboration between DECC, Defra and BIS.

Other changes recommended by IEMA include more comprehensive guidance on supply chains and a greater focus upon environmental performance – energy efficiency is identified in particular as an important measure missing from the guidance.

The Institute is also critical of the inclusion of a breakdown of KPIs that are “significant” to the Industrial Classification Benchmark sectors and the International Standard Industrial Classification sectors, highlighting that the table includes no reference to biodiversity and ecosystem services.

“The current draft environmental reporting KPIs looks at the environment through too narrow a lens – focusing on KPIs that reflect absolute emissions,” said Martin Baxter, IEMA’s executive director of policy. “A broader perspective is needed which puts much more emphasis on how the key environmental risks and opportunities of a business are being managed.

“At Rio+20, British companies and government helped secure international support to encourage businesses to include sustainability information in their annual reports. The UK government has an opportunity to achieve this by delivering mandatory GHG reporting and by providing a broader set of KPIs in business environmental reporting.”
IEMA’s responses to both consultations are available to download in full from iema.net.

Subscribe

Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.


Transform articles

EU and UK citizens fear net-zero delivery deficit

Support for net zero remains high across the UK and the EU, but the majority of citizens don't believe that major emitters and governments will reach their climate targets in time.

16th May 2024

Read more

There is strong support for renewable energy as a source of economic growth among UK voters, particularly among those intending to switch their support for a political party.

16th May 2024

Read more

Taxing the extraction of fossil fuels in the world’s most advanced economies could raise $720bn (£575bn) by 2030 to support vulnerable countries facing climate damages, analysis has found.

2nd May 2024

Read more

The largest-ever research initiative of its kind has been launched this week to establish a benchmark for the private sector’s contribution to the UK’s 2050 net-zero target.

2nd May 2024

Read more

Weather-related damage to homes and businesses saw insurance claims hit a record high in the UK last year following a succession of storms.

18th April 2024

Read more

The Scottish government has today conceded that its goal to reduce carbon emissions by 75% by 2030 is now “out of reach” following analysis by the Climate Change Committee (CCC).

18th April 2024

Read more

The Science Based Targets initiative (SBTi) has issued a statement clarifying that no changes have been made to its stance on offsetting scope 3 emissions following a backlash.

16th April 2024

Read more

While there is no silver bullet for tackling climate change and social injustice, there is one controversial solution: the abolition of the super-rich. Chris Seekings explains more

4th April 2024

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close