UK Mandatory Carbon Reporting
What is Mandatory Carbon Reporting?
On 12 June 2013, the UK department for Business, Innovation and Skills (BIS) laid before Parliament The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, requiring around 1,100 of the UK’s largest listed companies to report their greenhouse gas emissions every year.
The new regulations require all reports produced in relation to financial years ending on or after 30th September 2013 to disclose GHG emissions. The regulations themselves come into force from 1st October 2013.
If your company is quoted, then it will be required to include a greenhouse gas emissions statement in its directors’ report for the first financial year ending on or after 30th September 2013. “Quoted companies” are those that are UK incorporated and listed on either the main market of the London Stock Exchange, in a European Economic Area, or has been admitted to dealing on NASDAQ or the New York Stock Exchange (NYSE).
What do I need to know?
The most important features of the Regulation are:
- Global emissions, not just those in the UK. All emissions sources for which the reporting company is responsible are included, not just those in the UK. This means reporting companies will have to have efficient data collection systems for gathering information from global operations, as well as a set of global emission factors.
- All greenhouse gases, not just CO2. The requirement is for all Kyoto greenhouse gases. Greenhouse gas is defined in section 92 of the Climate Change Act 2008 (c. 27) as carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCS), perfluorocarbons (PFCS) and sulphur hexafluoride (SF6).
- Equivalent to scopes 1 and 2. The regulations are not prescriptive about companies having to report specifically to scopes 1 and 2, but the guidance document indicates that the totals you will arrive at will be similar – this was the underlying intention. However, there is also room to interpret some other emissions sources as being relevant for inclusion that would normally fall under scope 3 – emissions from leased assets, for example.
- In force from 1st October 2013. The new regulations require all reports produced in relation to financial years ending on or after 30th September 2013 to disclose GHG emissions. This means that companies need to think about collecting data and their method for calculating emissions now, while some will already need to have data available if they are to comply properly with the regulations in time for a 30th September year-end.
Audit-Ready Outputs for Mandatory Carbon Reporting
Companies affected by the Greenhouse Gas Emissions (Directors’ Reports) Regulations 2013 will be particularly interested in Our Impacts’ audit-ready outputs. With the prospect of having to include all organisational scope one and two GHG emissions in Directors’ Reports from 30th September 2013, it is vital that the correct emission and conversion factors are used to calculate results, or they may not stand up to scrutiny.
Our Impacts takes care of this process as you enter your data, giving you fully audit-ready reports and results in a range of formats at the push of a button. Plus, the pre-audit cost savings you’ll enjoy will make Our Impacts return on investment within a year. Enter your details below now to get a free demo of Our Impacts:
What does Mandatory Carbon Reporting mean for me?
If your company falls within the 1,100 companies mentioned above, then it will be required to include a greenhouse gas emissions statement in its directors’ report for the first financial year ending after 30 September 2013.
Ecometrica’s Our Impacts software already helps many FTSE 100, 250 and SmallCap companies, such as National Express, Aggreko and RSA, to blaze the carbon reporting trail. It is the only environmental accounting solution that accounts for all greenhouse gases, all GHG scopes, and has all emission and conversion factors for every country. Take a look at how Our Impacts can help you.
How do I comply?
We understand that you will want to comply with the new mandatory carbon reporting regulations in the most cost-effective and hassle-free way possible.
We have good news for you. Ecometrica has released versions of Our Impacts, our best-of-breed sustainability software, specifically for the FTSE 350 and Small Cap markets. Better still, Our Impacts audit-ready outputs are assured by PwC and fully compliant with the new regulations, removing any risk of non-compliance for your company.