LONDON, UK, August 10, 2012 (ENS) – More than 1,100 public companies listed on the London Stock Exchange will have to report their greenhouse gas emissions from next April under plans announced at the Rio+20 Summit that are now moving forward.
The UK is the first country to make it mandatory for companies to include emissions data for their entire organization in their annual reports. The reports will allow investors to see which companies are effectively managing the hidden long-term costs of greenhouse gas emissions.
Deputy Prime Minister Nick Clegg, who announced the new policy in Rio, said, “Counting your business costs while hiding your greenhouse gas emissions is a false economy.”
“British companies need to reduce their harmful emissions for the benefit of the planet, but many back our plans because being energy efficient makes good business sense too. It saves companies money on energy bills, improves their reputation with customers and helps them manage their long-term costs too,” said Clegg.
The new regulations will be introduced from April 2013. They will be reviewed in 2015, before ministers decide whether or not to extend the requirement to all large companies from 2016.
The UK government is committed to cutting the country’s emissions of the greenhouse gas carbon dioxide, CO2, to 50 percent of 1990 levels by 2025, Clegg said.
“Climate change is one of the gravest threats we face. The UK is leading the urgent action needed at home and abroad,” he said.
The government has issued a draft regulation for public comment. The regulation follows a public consultation last year where the majority supported making greenhouse gas emissions reporting mandatory.
The government launched two related consultations on July 25 – one on the draft regulation and the other on how to report Environmental Key Performance Indicators in a clear and concise way. Both are open for public comment until October 17, 2012.
Under the Climate Change Act 2008, the government must introduce mandatory carbon emissions reporting by April 6, 2012 or explain to Parliament why it is not doing so.
In March, Environment Secretary Caroline Spelman delayed a decision to introduce reporting, saying ministers needed more time to consider the evidence.
Now Spelman says, “The discussions we’ve had with businesses show that they want to cut down their greenhouse gas emissions, and they want to be open and transparent about it. What they have asked for is a level playing field so that they can be fairly judged against one another.”
“Investors are now looking hard at the green credentials of businesses, and the reporting of greenhouse gas emissions will give them vital information as they decide where to invest their money,” she said.
Greenhouse gases, such as carbon dioxide, methane and nitrous oxide are causing climate change leading to global temperature increases, sea level rises and dangerous changes to patterns of drought and flooding, according to the UK Department of Environment, Food and Rural Affairs, Defra.
“More than 30 billion tonnes of CO2 are emitted globally each year by burning fossil fuels and the concentration of CO2 in the Earth’s atmosphere is now higher than at any time in at least the last 800,000 years,” Defra said.
Reporting is the first vital step for companies to make reductions in these dangerous emissions. It is estimated it will save four million tonnes of CO2 emissions by 2021.
The majority of businesses responding to the consultation support the change. Government plans are also backed by employer and environmental organizations including the Confederation of British Industry and the Aldersgate Group, an alliance of leaders from business, politics and society that drives action for a sustainable economy.
Andrew Raingold, executive director for the Aldersgate Group, said, “The vast majority of businesses strongly welcome the introduction of mandatory carbon reporting. This is an area where corporate executives have been demanding more regulation from government to provide greater clarity and transparency.”
“Our detailed analysis demonstrates that this announcement will lead to huge cost savings for businesses as opportunities to reduce their energy use become more apparent,” said Raingold.
Over 75 percent of UK adults responding to a recent public opinion poll say large businesses should be required to report their emissions. The Populus poll of just over 2,000 UK adults was commissioned by the Aldersgate Group and published in May.
Said Rhian Kelly, director for business environment policy, Confederation of British Industry, “We have been calling for mandatory carbon reporting for some time. It is an important way to help businesses save money and emissions. “Provided this is done in a sensible way, this announcement is to be applauded.”
“Energy efficiency is a no brainer,” said Secretary of State for Energy and Climate Change Edward Davey. “It saves money for businesses whilst cutting carbon to help us meet our climate targets.”