New Year Update on Mandatory Greenhouse Gas Reporting

The year of mandatory greenhouse gas reporting has arrived! Ecometrica attended a workshop hosted by Defra shortly before Christmas, and there are a few updates on the timeline and nature of the Regulations.

Timeline – 1 October 2013 Start Date

It is increasingly likely that the Regulations will first apply to reporting years ending on or after 1 October 2013.

So, for example, if a company reports its accounts by calendar year then the first year for which it must collect data and report its greenhouse gas emissions is the current year, 2013.

The final version of the Regulations is expected to be laid before Parliament and enter into law in the next three months (Q1 2013), and Defra’s accompanying guidance document is expected at the same time. Once the exact requirements of the Regulations are known it will be important for reporting companies to ensure they are collecting the right data, and have set their assessment boundaries in accordance with the Regulations.

Flexible Operational Boundary

Something else that is apparent from the draft guidance document that Defra will publish alongside the Regulations is that there will be a highly flexible approach to establishing which emission sources must be reported. Companies will be required to include emissions from premises and vehicles over which they have “operational control”, but exactly what constitutes operational control will be at the discretion of the reporting company. There will also be flexibility on materiality thresholds (i.e. the level of emissions below which the emission source can be excluded).

Ecometrica broadly supports this flexible approach, as mandating precise rules and boundaries would make the implementing the Regulations far more difficult and burdensome. However, the trade off is that it will be difficult to make meaningful comparisons between reporting companies’ results – as different companies will set their operational boundaries in different ways.

With this in mind, the primary aim of the Regulations should be seen as encouraging the measurement and management of individual companies’ greenhouse gas emissions (rather than for making direct comparisons between companies).