Support for mandatory GHG reporting rises

18th July 2011


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IEMA

IEMA'S response to Defra consultation on mandatory greenhouse-gas (GHG) reporting reveals the measure in increasingly popular, but is critical of Defra's impact assessment

Support for mandatory GHG reporting has increased from 80% to 90% among the almost 900 environment professionals responding to the latest IEMA survey.

Survey respondents overwhelmingly back “option 3” in the Defra consultation on reporting, which closed on 5 July. More than 86% support this option, which will place an obligation to report on between 17,000 and 31,000 companies.

Option 3 is also the preferred choice among companies participating in the workshops and meetings held by Defra officials during the consultation period.

Lindsay Harris, the environment department official leading the team looking at mandatory GHG reporting, told a recent roundtable on the issue held by the environmentalist and consultancy WSP (full report next month) that “the majority view is that the government should be regulating all large companies, which is option 3 in the consultation.”

He acknowledged that a fairly significant minority are not convinced that GHG reporting should be mandatory, however.

The IEMA research also uncovered some of the potential business and environmental benefits of requiring companies to disclose their GHG emissions.

More than two-thirds (69%) of respondents say that GHG reporting will deliver cost savings, while more than three-quarters (77%) claim it will lead to environmental benefits – those reporting benefits indicate an average of 4.5% CO2 savings a year. And 92% say a legal obligation to disclose will provide a simplified reporting framework and level playing field for businesses to report on their carbon emissions.

“IEMA’s research clearly demonstrates that the long-term savings and environmental benefits of reporting on GHG emissions clearly outweigh the initial costs needed to establish reporting systems within companies,” says Martin Baxter, policy director at IEMA.

IEMA has also submitted its response to the consultation. It is critical of the regulatory impact assessment (RIA) that accompanied the consultation document. IEMA says that the RIA wrongly assesses the costs of GHG reporting and does not give sufficient weight to “intangibles”, such as improved reputation and enhanced competitiveness, when estimating the benefits.

“The RIA allocates a standard annual cost to reporting over a 10-year period. In reality, the costs are larger at the outset, as systems are set up, before declining as processes become embedded. So, over time, costs will fall and net benefits will follow. Defra’s own research on the resource efficiency shows no-cost/low-cost annual savings opportunities from greater efficiencies of about £23 billion for UK businesses,” says Baxter.

The CBI has also given its backing to mandatory reporting. As the Defra consultation closed, the employers’ body reiterated its call for its introduction, arguing that mandatory carbon reporting would help firms monitor and manage their emissions effectively.

“Mandatory carbon reporting is a great way of making boardrooms aware of the savings possible through energy efficiency,” said director of business environment Rhian Kelly. “To be effective, it is important that the government phases in the introduction of mandatory reporting and makes the process simple for companies to follow.”

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