Green build NEWS

All companies listed on the London Stock Exchange’s Main Market must report their greenhouse gas emissions from the beginning of the next financial year.

Britain is the first country to introduce compulsory disclosure of a company’s total carbon emissions in its annual report. The move will affect around 1,600 businesses.

The decision has been taken following consultations with businesses and business representatives, such as the CBI, as well as with environmental organisations. The scheme aims to allow investors to see whether companies are managing the long term costs of greenhouse emissions effectively.

The new regulations will be introduced from April 2013.  They will then be reviewed in 2015 and government will decide whether to apply the compulsory disclosure policy to all large businesses from 2016. Britain is committed to reducing carbon emissions by 50% of 1990 levels by 2025.

Deputy prime minister Nick Clegg made the announcement at this week’s Rio+20 Summit. He said: “Counting your business costs while hiding your greenhouse gas emissions is a false economy.

“British companies need to reduce their harmful emissions for the benefit of the planet, but many back our plans because being energy efficient makes good business sense too. It saves companies money on energy bills, improves their reputation with customers and helps them manage their long-term costs too.”

Businesses which backed the mandatory reporting approach stated that it would result in: the first step in enabling companies to manage and reduce emissions; more transparency from companies; a single consistent standard and businesses being able to access information that could save them money through reduced energy costs.

The government has stated that the scheme ‘builds on’ the existing Carbon Reduction Commitment (CRC). Secretary of state for Department of Energy and Climate Change, Edward Davey said: “Energy efficiency is a no brainer. It saves money for businesses whilst cutting carbon to help us meet our climate targets. The introduction of mandatory reporting will build on the regulatory framework established by the CRC Energy Efficiency Scheme for the largest energy users.”

However, many voices from the business community questioned the relevance of the CRC once the new policy comes into play in April 2013.