UK to impose mandatory GHG reporting

20th June 2012

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FTSE-listed firms will have to reveal their annual greenhouse-gas (GHG) emissions from April 2013 Nick Clegg has confirmed, with all large businesses likely to report from 2016

Ahead of his arrival at the Rio+20 Earth Summit, the deputy prime minister has revealed that all companies listed on the London Stock Exchange will be required to report the amount of GHGs they emit annually from the start of the next financial year.

The move is part of government plans to encourage private sector companies to make better use of resources and lower their GHG emissions, says Clegg.

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

Clegg will formally announce the plans to introduce mandatory GHG reporting at Rio+20, confirming that the government aims to roll out the requirement to all 24,000 large businesses operating in the UK from 2016.

“The UK will press for governments to come together, working with those companies already blazing a trail, to give 'sustainability reporting' a global push. By agreeing common standards and practices we can get many more firms on board,” he said.

The announcement means the UK will be the first country in the world to require firms to report on their GHG emissions, a move Defra claims will save four million tonnes of carbon emissions by 2021.

Representatives from the business sector and environmental groups have welcomed the news, after Defra delayed making a decision on mandating GHG reporting in March.

Andrew Raingold, executive director for the Aldersgate Group, which has campaigned in favour of mandatory reporting, said: “The vast majority of businesses strongly welcome the introduction of mandatory carbon reporting...this will lead to huge cost savings for businesses as opportunities to reduce their energy use become more apparent.”

While welcoming the announcement IEMA urged the government to speed up the broader application of GHG reporting.

“We will not see the full benefits of mandatory reporting until it is introduced for all large businesses,” warned Martin Baxter, executive director of policy at IEMA. “Currently the majority of listed businesses already report on their GHG emissions, so until this legislation is broadened out it will not achieve its full potential for environment and business.

“More than 90% of IEMA members we surveyed supported the introduction of GHG reporting for all large companies. We strongly urge government to introduce mandatory reporting to all large companies as soon as possible.”

Paul Dickinson, chair of the Carbon Disclosure Project through which two-thirds of FTSE-350 companies voluntarily reported on their GHG emissions in 2011, described the move as an important step.

“I’m delighted the UK government recognises the value of disclosure in accelerating emissions reductions. Regulation is essential in moving us towards a low carbon economy,” he said.

However, manufacturing body, the EEF, has argued that the government’s decision to introduce mandatory reporting doesn’t take into account other policies aimed at reducing carbon emissions and risks being seen as an “add-on”.

“The government has missed an opportunity by rushing its decision on mandatory greenhouse gas reporting. We believe the government should have waited and taken a much wider view in the context of the future of other related policies, such as the Carbon Reduction Commitment Energy Efficiency scheme and Climate Change Agreements,” commented Gareth Stace, head of climate and environment policy at EEF.

“Greenhouse-gas reporting can be a powerful tool to further reduce emissions from the business sector. However, it should not be seen as an add-on but as a strategic part of the wider policy landscape.”


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