Mixed reaction to mandatory GHG reporting

14th June 2011

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A Defra consultation on whether companies should be forced to report their greenhouse-gas (GHG) emissions has sparked a debate as to the effectiveness of the approach.

While many business and environmental organisations have responded enthusiastically to the consultation, the manufacturers’ body the EEF has warned that the government needs to consider its approach to climate change policy more strategically.

“With ongoing discussions about the future of climate change agreements and the Carbon Reduction Commitment Energy Efficiency scheme, as well as the requirements of the EU emissions trading scheme to consider, our concern is that mandatory reporting isn’t seen in isolation,” said Susanne Barker, EEF senior climate and environment policy adviser.

“A holistic view must be taken on how these mechanisms will slot together to drive the right behaviour, but not be overly onerous, expensive and there for its own sake.”

Doug Parr, Greenpeace’s director of policy, also remains unconvinced. “Carbon footprinting has an important role to play, but I’m not sure that making it mandatory is the best option,” he said. “The danger is that businesses will spend too much time measuring and not enough time managing.”

However, the Carbon Disclosure Project (CDP) disagrees, arguing that “what gets measured gets managed.”

“Mandatory carbon reporting is a win-win-win situation,” said Cassie Chessum, CDP’s head of government relations.

“It provides transparency for shareholders, encourages behaviour change in businesses and supports government objectives to mitigate climate change. The government should seize this opportunity and introduce the required regulations.”

With more than 80% of IEMA members believing mandatory reporting should be introduced, the Institute has also welcomed the consultation.

“UK plc is at a turning point with environmental reporting; with the right support from government we can move GHG reporting into the mainstream and turn this into a business opportunity by helping companies to reduce costs and improve their competitiveness,” said policy director Martin Baxter.

The launch of the consultation came as the Environment Agency published its disclosures report which revealed that only 25% of FTSE listed companies reporting on their carbon dioxide emissions, water use or waste creation provided figures in line with government guidance.

The consultation closes on 5 July.

Puma leads the pack

International sportswear firm Puma has become the first company to publish the cost of the greenhouse gas (GHG) it produces and the water it wastes, in a ground-breaking environmental profit and loss statement.

Puma has calculated its overall environmental impact in 2010 as costing £82.7 million, with GHG emissions accounting for just under half of the total (£40.8 million).

“The environment profit and loss statement is an essential tool and a shift in how companies can account for and integrate into business models the true costs of their reliance on ecosystem services,” said Jochen Zeitz, chair of Puma.

The report reveals that Puma’s supply chain accounted for 85% of its GHG emissions and more than 99.9% of its water consumption.

Zeitz, who has come out in favour of mandating GHG emissions reporting, confirmed that Puma will be collaborating with the industry to adopt the profit and loss approach.

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