Isra-Mart srl: Government urged again to deliver mandatory emissions reporting

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Isra-Mart news:

The government has today once again been urged to force large companies to submit annual greenhouse gas emission reports as its consultation on the issue draws to a close.

Defra invited views on four carbon reporting proposals, three mandatory reporting schemes and a voluntary programme, after the Climate Act committed the government to either introducing a legally-binding carbon reporting regime, or explaining to Parliament why it had not done so, by April next year.

The consultation, which closes today, aims to ascertain the most effective means of increasing the number of companies producing annual carbon reports and improving the consistency of reporting standards, acknowledging that widespread and consistent carbon reporting would help investors identify corporate risks and encourage firms to step up efforts to curb emissions.

However, the government's refusal to come out in favour of mandatory reporting during the consultation angered many green and business groups, including the CBI, who have consistently argued that legally binding emissions reporting requirements for large firms are needed to ensure reporting standards are adhered to.

Research last year by Deloitte suggested that over half of UK companies reported emissions information to some degree in 2009, but only nine per cent disclosed data to the standard recommended by Defra's own carbon reporting guidelines.

Martin Baxter, executive director of policy at the Institute of Environmental Management and Assessment (IEMA), told BusinessGreen that the research underlined the importance of moving from today's voluntary carbon reporting regime to mandatory and regulated reporting.

"As a policy, [voluntary reporting] has singularly failed," he said. "[Mandatory reporting] would level the playing field, and give a consistent standard for reporting."

Baxter said a poll of IEMA members revealed they were overwhelmingly in favour of a change, with only five per cent advocating the UK maintain its voluntary system.

IEMA is in favour of compelling all large companies to report on direct emissions (Scope I) and indirect emissions arising from consumption of electricity and heat (Scope II), which could cover between 17,000 and 31,000 companies.

"This option would keep emissions on the boardroom agenda and have environmental benefits," he said. "Also around two thirds of our members [in the poll] thought this option would deliver economic benefits for companies."

The CBI and a number of large businesses have also backed mandatory reporting for this same reason, stressing that companies can recoup significant savings from cutting down on waste and energy bills.

In January a coalition of 150 organisations, including many of the UK's most high profile firms, wrote to Defra, the Department of Energy and Climate Change (DECC) and the department for Business, Innovation and Skills (BIS), urging them to implement mandatory reporting.

However, some small businesses have voiced concerns that such a regime could impose additional administrative burdens, a view echoed by Sainsbury's boss Justin King earlier this year.

Baxter said that for the mandatory reporting regime's initial phase at least, the government should limit the administrative burden by not making external verification of emissions data a legal requirement.

"Many companies will voluntarily assure data but not all will necessarily want to," he said. "[Not requiring verification] keeps costs down and brings us in at an appropriate level."

A Defra spokeswoman told BusinessGreen the government would publish its response to the consultation in the Autumn, but could not confirm when any new reporting rules would be introduced.

Some experts have warned that given any proposed legislation would have to be drafted and consulted upon following the government response, the April 2012 deadline could be missed.