Firms need to get ready for reporting

One-third of the UK's top 350 firms still need to put in place systems to capture and report their emissions data ahead of the introduction of mandatory greenhouse-gas (GHG) emissions reporting next year

The latest findings from the Carbon Disclosure Project (CDP) on reporting by companies in the FTSE350 index reveals that currently 64% include GHG emissions data in their financial reports, leaving 36% still to act.

The CDP’s results come as IEMA responded to the government’s consultation on proposed regulations requiring the disclosure of GHG emissions in companies’ annual reports.

It warns that a lack of clarity over green-tariff electricity in the draft legislation means it is unclear which firms can ultimately claim the “carbon benefit”.

It wants the final regulations to include a requirement that emissions from electricity consumption should be reported using a grid average. Firms buying electricity on green tariffs would be able also to report their lower emission calculations, but requiring all firms to report grid-average emissions will ensure consistency in reporting and minimise confusion, according to IEMA.

The Institute also highlights potential gaps in accounting for emissions from stored sources and from land owned by the reporting company. And, although scope three emissions are currently outside the reporting framework, IEMA recommends that the final text should include a statement encouraging firms to report such emissions.

“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,” states the response. “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.”

IEMA also notes that the existing Defra guidance on measuring and reporting GHG emissions will not by itself address all issues that companies will need help with in meeting their obligations, and advises the government to provide more support ahead of the regulations coming into force.

Under the government’s plans, more than 1,000 FTSE listed companies will have to report their GHG emissions from 2013.