Mandatory Carbon Reporting Services

Sustainable Direction are pleased to see the Greenhouse Gas Emissions (Directors' Report) Regulations 2013, also known as Mandatory Carbon Reporting regulations, are in full swing.

UK Incorporated companies that are listed on the main market of the London Stock Exchange, listed in a European Economic Area State, or dealing on either the New York Stock Exchange or NASDAQ will need to report the carbon emissions that they are responsible for in their annual Directors' Report.

"This will be good for driving behaviour change", John Henry of Sustainable Direction said. "A recent poll of energy managers of those affected for a 2degrees event found that 39% of them felt that the regulations would result in change in their organisation. Only 12% said they did not believe it would lead to change, and 21% said they were doing it already!

"There's risk here - Section 397 of the Companies Act says directors can be jailed for fraudulent statements in their Report - but also opportunity. The carbon reporting element will be considered for consistency with the financial statement but you can also use this to crate internal momentum, benchmark against competition and even take a leadership position".

The affected companies must report on the emissions they are "responsible" for. This can be interpreted to mean financial and / or operational control. Organisations will report on the six Kyoto Agreement gas emissions in the form of tonnes of carbon dioxide equivalent (TCO2eq). Companies will also need to report at least one intensity ratio.

"Intensity ratio selection will need to be carefully done. There's no clear guidance about what is required, so you are free to select the factor that matters to you and to your business growth, such as turnover, or production, or floor area. You can also select more than one, which we recommend", John Henry says.

You are not required to report emissions from your supply chain, use phase of products or end of life from your products, but you will need to report on your global undertakings. "Anything you have financial or operational control over will need to be reported. If you have no access to data then you will need to get this in place", John Henry warns.

Companies will need to report in the next Directors' Report after 30th September 2013. If you have any questions please, contact us.

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