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UK companies miss carbon reporting targets

UK listed companies are not ready to report on their carbon footprint, according to a Deloitte UK report.

Deloitte’s energy practice and carbon reporting and assurance team director Jenny Harrison told the The Accountant that many companies need to improve information they disclose if they are going to be ready for mandatory reporting requirements.

The comments follow the publication of the report, Seeing the wood for the trees, which found only a handful of 100 listed companies who participated partially complied with current UK Department for Environment, Food and Rural Affairs (Defra) guidance.

While more than half (57%) of listed companies report carbon footprint information to some degree, only 37% formally report numerical data and only 9% disclose this information in line with the Defra guidance.

Deloitte’s report also found many companies failed to make basic disclosures around the reporting methodology used, or accounting principles applied, highlighting a lack of transparency around measurement principles and reporting of carbon footprints.

None of the information currently has to be assured, independently reviewed or audited meaning it is up to the company to make sure it is sufficiently accurate, which could be a risk to stakeholders, according to Harrison.

 “If reporting is in line with the Defra guidance it needs to be both quantitative and qualitative so the question is when you are pulling together quantitative information about your emissions, how robust is that information and how good are your systems and processes to make sure it has been consistently prepared and is quality information?

“Currently because the guidelines and frameworks are at an early stage most companies need a review of the controls and process rather then a review of the information,” Harrison said.

The Deloitte report found less than 10% of respondents stated that their reporting information had been assured by a third party.

 “Carbon reporting doesn’t need to be reams and reams of disclosure but there should be a short, succinct and clear story of a carbon performance included within an annual report,” Harrison said.

A report from the UK Government is due to be published on 1 December, which will be an initial response to whether reporting against guidance is actually encouraging reduction in emissions.

This will be the government’s first step in deciding on whether the information should be mandatorily reported as part of either the annual financial report or sustainability report. The final decision is expected to be made in April 2012.

Seeing the wood for the trees compared carbon reporting of 100 listed companies in the UK against Defra guidelines.

 

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