Greenhouse Gas Emissions Reporting

Greenhouse gas emissions reporting – what will it mean for you?

Lowering emissions of greenhouse gases, is a major issue that is not going away.  The Government has made it clear that it expects all businesses, large and small, to play a lead role in reducing the UK’s greenhouse gas (GHG) emissions.  There is a clear view in Westminster that business will be instrumental to reaching the target of reducing GHG emissions by 80% below 1990 levels by 2050.

DEFRA recently issued its guidelines on how all companies should measure and report GHGs, part of a package of measures related to legally binding commitments made in the Climate Change Act 2008.  This guidance from DEFRA is the first major milestone towards probable mandatory GHG reporting in 2012.
 
Reporting of emissions over time is seen as an important lever to ensure organisations get serious about emissions reductions.  The focus, as Ed Milliband and Hilary Benn put it, is on “what gets measured gets managed”.

Whilst DEFRA offer practical guidance on which greenhouse gases to measure, the information to collect, the calculations needed and some illustrative reporting formats, it leaves companies to work out how information should be best gathered, measured and reported accurately.  It also doesn’t provide any advice on whether companies should get their GHG reports independently audited, and how they should get ready for such scrutiny.

BDO has established a GHG Task Force to raise awareness of this issue, provide advice and support to prepare our contacts for the demands of emissions reporting or provide attestation for company reports.   The Task Force is involved in consultation with the IAASB to shape the nature of future audit and assurance requirements, most recently involving a response to the draft IAASB paper on Assurance on a Greenhouse Gas Statement. The GHG Task Force is made up of representatives from across BDOs service streams internationally.

In a recent survey by BDO, the majority of respondents felt unprepared for GHG emissions reporting, in terms of their available resources, technical skill and systems readiness.  Importantly, a clear majority of the companies surveyed expected the costs to outweigh the financial returns.  At this point, we suspect it is difficult for business to see this as anything other than more regulation.  Whilst so long as energy costs to business don’t include the real (the price society really places on) carbon cost, real behavioural change will be slower.  Nevertheless, the savvy corporates see this as an opportunity to demonstrate to increasingly greener stakeholders that they are focused on the issue.  It also enables real measurement of progress in getting the “house in order” before substantial carbon costs (either via the market or carbon taxes) become a much higher drain on each unit of production than is the case right now.

Should you wish to discuss the opportunities and challenges associated with GHG emissions reporting, please contact Marc Reinecke.