UK Deputy Prime Minister Nick Clegg has said
more than 1,800 companies are going to be mandatorily required to
report greenhouse gas emission levels from April 2013.
Clegg’s confirmation comes as he is expected
to attend the Rio +20 summit and demonstrate the UK government’s
commitment for increased sustainability.
In an article for the Guardian, Clegg wrote
that while nine out of ten chief executives say sustainability is
fundamental to the success of their business only two out of ten
record the resources they consume.
“So, the UK will press for governments to come
together, working with those companies already blazing a trail, to
give ‘sustainability reporting’ a global push. And in the UK, from
the start of next financial year, all firms listed on the London
Stock Exchange will have to report the levels of greenhouse gases
they emit,” Clegg said.
PwC UK sustainability and climate change
partner Alan McGill said this requirement shouldn’t be too much of
an extra burden, but the timetable for financial reporting may be a
challenge, and there are issues around coherence of reporting and
materiality.
“Companies that aren’t already reporting may
worry about the additional regulatory burden. But this isn’t just
about reporting. It’s about setting targets and driving efficiency,
which should save money, as well as carbon,” McGill explained.
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By GlobalData“For government and investors, it lifts the
lid on environmental efficiency and carbon productivity in UK
business.”
He added that the main surprise is it’s not
just all large companies who will have to comply with the new
regulation but all listed ones.
“But it’s a bit early to see the government
going much further than listed companies at this stage. There may
be fears that extending it beyond large listed companies, into
private small or medium sized enterprises could be too much of a
burden,” McGill said.
Deloitte UK head of sustainability Guy Battle
said increased regulation will create a step change in carbon
measurement and reporting and add value for businesses. “This isn’t
purely about compliance. It’s about ‘good’ business sense and
taking this regulatory push as an opportunity to identify new
carbon strategies and potential cost savings,” he said.
Institute of Chartered Accountants of England
and Wales (ICAEW) chief executive
Michael Izza said that by this move the
argument as to whether reporting should be mandatory or not has
passed. But warned a method and system is needed “that works” and
will “drive behaviour change from business, which is why this
reporting is to be introduced”.
“We believe the Climate Disclosure Standards
Board (CDSB) framework which links carbon footprint to strategy
risk and performance is the best way to achieve this,” Izza
recommended.
