The clock is ticking on carbon emissions reporting – from October, companies will need to include global carbon dioxide equivalent emissions in their financial reports.
At the same time, there are growing calls for the Government to radically reassess its environmental policies and we have two questions – are UK businesses ready for carbon emissions reporting, and, can the complex green business strategy be brought back on course?
Mandatory carbon reporting only applies to companies listed on the London Stock Exchange and is another step along the road mapped out on October 16th 2008 by Ed Miliband, then Secretary of State for Energy and Climate Change. At the time, he announced that the Climate Change Act would mandate an 80% cut overall in six greenhouse gases by 2050 on 1990 baselines.
Further government policy since then has included the CRC Energy Efficiency Scheme and mandatory carbon reporting was announced in June last year. It’s complex and there are some details still to be teased out. However, in five weeks’ time, publically listed companies in the UK will have to disclose greenhouse gas emissions.
“Carbon dioxide equivalent” (CO2e) is defined as emissions data from the six main Kyoto gases (carbon dioxide, methane, nitrous oxide, perfluorocarbons, sulfur hexafluoride, and hydrofluorocarbons). The Department for Environment, Food and Rural Affairs (DEFRA) has a methodology for converting, for example, litres of fuel used, number of miles driven or tonnes of waste into kilograms of CO2e.
The Companies Act also makes it the legal responsibility of a board of directors to “state the annual quantity of emissions in tonnes of carbon dioxide equivalent from activities for which that company is responsible”, with up to six months in prison for any director who makes a misleading or false statement.
We think that the logistical and financial challenges these present are huge, from collating the needed data across multiple business sites and even countries as well as working with suppliers and partners to assess their carbon footprints. The Guardian is holding a live chat event next Wednesday (September 4th, 1-3pm) on the topic, which should be very informative.
In this context, calls this week by UK business for the Government to reassess its green strategies are significant. The CBI appealed for this in a report published on Wednesday, Shining a Light – Uncovering the Business Energy Efficiency Opportunity and a story in Utility Week magazine reveals that the business organisation wants the Coalition to untangle its confusing environmental policies.
Rhian Kelly, CBI director for business environment policy, is reported as saying: “Businesses are frustrated with the tangle of overlapping policies that are bureaucratic, complex and costly.”
He added that the government needs to “come up with a simpler approach” and that the Energy Efficiency Deployment office “will need to make its mark quickly”.
Utility Week also reports climate change minister Greg Barker as saying: “I’m determined to do even more to create the right conditions for businesses to cut energy waste, and take advantage of the energy efficiency opportunity.That is why we launched the Energy Efficiency Deployment Office in February 2012 to help businesses overcome a range of barriers to making considerable cost savings.”
There does seem to be a lack of direction and clear vision at the heart of the Coalition’s climate policies and one that we think needs to be addressed urgently. We argue that national policies promoting simple, effective carbon-cutting solutions, together with better support for businesses trying to ‘go green’, are needed right now. If you need advice on cost-saving, carbon-cutting solutions, why not give us a call on 0333 123 5464 or email us.