UK Environment Department consults on carbon reporting rules
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One of four options proposed in the UK Government's consultation on mandatory carbon reporting is to require all large public and private companies to report emissions. Up to 31,000 companies could meet two or more of the Companies Act 2006 criteria to qualify as large: turnover at least £25.9 million, a balance sheet of at least £12.9 million and/or at least 250 employees.
However, the UK Government has also proposed an option to limit reporting requirements to around 1,100 quoted companies, because information on their GHG emissions is likely to be of most interest to investors. A third option is to limit mandatory reporting to companies whose UK electricity consumption exceeds a threshold. This would likely cover more than 2,780 companies that use at least 6,000 MWh of electricity and are registered for the CRC Energy Efficiency Scheme.
A fourth option is to encourage voluntary carbon reporting. Trucost's latest study on environmental reporting in the FTSE-All Share, for the Environment Agency, shows that while 62% of companies analysed provided quantitative carbon data, just 22% of disclosures were in line with the Government's voluntary carbon reporting guidelines.
Colin Baines, Campaign Manager at The Co-operative Group, said that "voluntarism has run its course," during a debate organised by the Aldersgate Group on 7 June. "If the Government wants to see market solutions to a low-carbon economy, it needs to provide the tools," said Baines.
Emma Howard Boyd, Director at Jupiter Asset Management, said that a regulatory push was needed "to embed carbon reporting in the financial process." Howard Boyd added: "Carbon reporting is only the start. We need to have this data to meet challenges."
The consultation closes on 5 July 2011 and the Government expects to decide in the autumn whether or not to make carbon reporting mandatory.
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