The UK government has launched a consultation on the most effective way to improve the reporting of greenhouse gas emissions by companies.
The document from the Department for Environment, Food and Rural Affairs (Defra) sets out four options to achieve more “widespread and consistent” reporting.
The options include:
- Enhanced voluntary reporting
- Mandatory for all quoted companies
- Mandatory for all large companies
- Mandatory above a consumption threshold
Defra says option two “is likely to be of most interest to investors and potential investors”. Around 1,100 companies would be covered by this option. The consultation includes threequestions specifically for investors. “If you are an investor, we want to know if there are any cost savings to investors from having access to better information on companies GHG emissions,” Defra says.
Quoted companies are already required under the Companies Act to include information about environmental matters in their business review – although Defra is not proposing that any new requirements would form part of the business review provisions.The 2008 Climate Change Act requires the government to make regulations by April 6 2012 requiring company reports to include information about GHG emissions.
“We want to see more businesses reporting their emissions, but a balance has to be struck to ensure we are not adding any unnecessary burdens,” said Environment Minister Lord Henley.
“Our aim is to increase the number of companies which actively manage and report their emissions, so we want to hear from businesses how they think we will achieve more widespread and consistent reporting.
“More consistent reporting of emissions should help investors make better use of such data and help them incorporate climate change risk more effectively into their investment decisions.”
The consultation closes on July 5 with a decision on the direction the Government will take likely in the autumn.
The new enquiry follows a separate government consultation on companies’ narrative reporting including their coverage of social and environmental matters. “If we introduce new regulations as a result of this consultation, our approach will be aligned with the proposals for a new reporting framework,” Defra said.