UK spearheads mandatory business ghg reporting

Posted on: Friday, 27 July 2012 by Rachael Dillon in category Environment

Four years ago, when the Climate Change Act came into force, plans for potential greenhouse gas reporting obligations for businesses seemed a long way off. Voluntary Government guidance was published in 2009, followed by sector-specific guide for freight. Yet by the end of next year, all UK quoted companies will be legally obliged to report their greenhouse gas emissions in annual reports. What’s more, we are the first country in the world to make it compulsory for companies to include emissions data for their entire organisation in their annual reports.

Companies will be required to report scope 1 direct emissions (such as transport, air conditioning, waste processing) and scope 2 indirect emissions (such as electricity and heat). However scope 3 emissions are not part of the regulations so things like business travel and outsourced distribution do not have to be reported. Whilst only the largest companies will be affected by the regulation, there’s no doubt there will be a trickle down affect to smaller businesses. In 2016, Government will consider whether to extend the reporting requirements to other companies.

This week, Defra has launched a public consultation seeking views on the draft regulations. When the announcement was made on mandatory reporting last month, FTA gave a cautious response as we believe the current voluntary reporting framework for greenhouse gas reporting by individual companies published in 2009 provides a strong basis on which companies of all sizes can report their emissions in a consistent way. The freight sector has also already launched a pioneering voluntary Logistics Carbon Reduction Scheme to demonstrate emission reduction progress. It remains to be seen whether taking the step towards mandatory ghg reporting obligations will actually drive down emissions and not just be a tick box exercise for companies.

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