In June 2012 we reported on Government plans for mandatory reporting of greenhouse gas (GHG) emissions for UK quoted companies from April 2013. The proposal is for this reporting to be included in the directors’ report in the annual reports. The Government intends to make a decision in 2016 whether to extend the requirement to all large companies.

On 25 July 2012 the Department for Environment Food and Rural Affairs issued a consultation on the draft regulations which are intended to implement this GHG reporting. The consultation, which covers the UK, is open until 17 October 2012. 

Proposed regulations

The draft regulations, to be made under the Companies Act 2006, propose that:-

  • The annual reporting will come into force for years ending after 6 April 2013. (The consultation recognises that separate regulations on other aspects of reporting are expected later this year and these regulations may propose changes for reporting years ending after 1 October 2013. Therefore the consultation expressly asks whether implementation of these regulations should be timed to coincide with each other).
  • The GHG covered are carbon dioxide, methane, hydrofluorocarbons, nitrous oxide, perfluorocarbons and sulphur hexafluoride. These are to be reported in the well known form of tonnes of carbon dioxide equivalent.
  • Annual GHG emissions to be reported are those resulting:
  1. directly from the:-
  • combustion of fuel in any premises, machinery or equipment operated, owned or controlled by the company;
  • the use of any means of transport, machinery or equipment operated, owned or controlled by the company;
  • the operation or control of any manufacturing process undertaken by the company.

The emissions reported must include the leakage or other escape of emissions (i.e. fugitive emissions) resulting directly or indirectly from any of the activities referred to above.


  1. from the purchase of electricity, heat, steam or cooling by the company. 
  • The methodology used to calculate emissions must be stated. It is not obligatory to follow government guidance.
  • The use of data from specified schemes i.e. the CRC Energy Efficiency Scheme, the EU ETS or Climate Change Agreements is allowed (but must be declared).
  • The report must include a ratio which expresses annual emissions in relation to a quantifiable factor associated with the company’s activities (an intensity ratio) e.g. emissions per £ turnover, or per tonne of production.
  • There will be flexibility to report emissions via a reporting year which differs to the company’s financial year, if this is expressly stated.
  • The regulations shall be reviewed in 5 years.


The Conduct Committee of the Financial Reporting Council is the body which will enforce the provisions.

Separate relevant consultation launched

Also on 25 July a consultation was issued on revised voluntary guidance for UK businesses and public bodies on measuring and reporting their environmental impacts using environmental key performance indicators (KPIs).  The KPIs identified are air quality and emissions, water, biodiversity and ecosystem services, natural materials and waste.

Responses to both consultations must be submitted by 17 October 2012.


For access to our earlier Lawnow on mandatory reporting for quoted companies click here

For access to the consultation document click here

For access to the draft regulations click here

The consultation on reporting guidance for business on Environmental KPIs is available here