The UK government is currently consulting on proposals that will require quoted companies to report on their greenhouse gas emissions in their directors’ reports. Quoted companies will need to report the emissions arising from their activities as a carbon dioxide tonnage equivalent.

The precise date when this will come into effect is being consulted on.  The original intention was that it would apply to all reporting years ending after 6 April 2013.  However, other changes planned in relation to company reporting may mean this is delayed and only affects reporting years ending after 1 October 2013.

In 2015 there will be a review which will consider whether this obligation should be extended to all “large” private companies.

If you are  already reporting emissions data on a voluntary basis then you will be well placed to meet these new requirements.  If not, you need to make preparations now to be able to comply with this new obligation.

Key Points:

  • All 6 Kyoto greenhouse gases must be reported on;
  • Emissions resulting directly from:
    • the combustion of fuel;
    • the use of any transport, machinery or equipment owned or operated by the company; or
    • the operation of any manufacturing process (together known as Scope 1 emissions)

must be reported.

  • In addition emissions arising from the purchase of electricity, heat, steam or cooling must be reported (known as scope 2 emissions). This will be in addition to your obligations under The CRC Energy Efficiency Scheme.
  • At present other indirect emissions e.g. business travel in non company vehicles do not have to be reported.
  • If you are collecting data to comply with your Climate Change Agreement, the EU ETS scheme or the CRC Scheme you will be able to use this data provided you make clear where the data has come from.
  • Companies must state the methodology used to calculate their emissions data. DEFRA has published guidance on how to calculate emissions however there is no obligation to use this.  If you are already using another standard you can continue to do so.
  • The report must also include an “intensity ratio” of your choice which expresses your emissions by reference to a quantifiable factor e.g. emissions per unit of turnover.
  • You will need to disclose this information annually and the first year’s information will be repeated each year in order that stakeholders can monitor whether your overall emissions are reducing.

The Consultation is open until 17 October 2012 if you wish to respond.  If you are a quoted company you should start preparing to comply.  If you are a large private company we would recommend you monitor this issue since you may be caught in future.