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.
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By GlobalData “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.
