Isra-Mart srl:Business leaders demand coalition triggers mandatory carbon reporting rules

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The government has been urged to enact legislation requiring large firms to report annually on their greenhouse gas emissions (GHG) in a bid to boost investor confidence in the UK's emerging low-carbon economy.

A coalition of 150 organisations and firms including BAA, Nestle and Oxfam, wrote last week to the three government departments in charge of business, energy and the environment, urging them to take advantage of a clause in the 2008 Climate Change Act that would allow them to introduce mandatory carbon reporting by April 2012.

Under the clause, the government is obliged to either impose greenhouse gas reporting rules or provide an explanation for failing to introduce new rules.

The campaign has also been backed by 116 MPs under an Early Day Motion tabled by Martin Horwood.

The government is expected to make an announcement in the coming weeks on how it plans to establish widespread GHG reporting.

However, the Co-operative Group, which is leading the campaign, believes the government is currently edging away from the introduction of mandatory reporting rules.

"We thought it was a shoe in," Colin Baines, campaign manager of Co-op's Combating Climate Change initiative told BusinessGreen. "But when Defra announced its voluntary guidance on emissions reporting and then another report in November last year, they didn't give any indication of it."

Baines said he has since met with Whitehall officials, again receiving no positive signals that government will introduce mandatory reporting. However, he said one option being considered would see GHG reporting folded into an upcoming review of non-financial reporting, by the Department for Business, Innovation and Skills (BIS).

The letter forms part of the Co-op's larger Toxic Fuels campaign in partnership with WWF, which aims to raise awareness of an emerging global trend to extract oil from unconventional fuels, such as tar sands and shale oil.

Unlike the Carbon Reduction Commitment, mandatory reporting would require businesses to publicly disclose emissions covering all GHGs, not just carbon emissions.

Supporters of the approach argue it would allow potential investors to assess the level of risk firms face from carbon legislation and determine whether they were linked to carbon intensive projects, such as the extraction of oil from tar sands in Canada.