Duty to disclose

Companies face obligation to report CO2 after amendment to Climate Change Bill

Binding rules on carbon disclosure will put companies on a level playing field, where consumers and investors alike can make meaningful comparisons between the leaders – and the laggards. That’s the avowed purpose of Lord Whitty’s amendment to the Climate Change Bill currently going through parliament.

Approved unanimously in the House of Lords at the end of March (but not yet debated in the Commons), the amendment would open the way to making emission reports a mandatory element in the annual business reviews now expected from all company directors under the 2006 Companies Act - with only small enterprises excluded.

The new clause could help achieve the Bill’s main target of cutting UK carbon dioxide emissions by 3% each year between 2010 and 2050. Andrew Raingold, public affairs manager of the Aldersgate Group of which Lord Whitty is a member, explains how: “Together with a common protocol, mandatory carbon disclosure would be a significant driver for change and competitive advantage in the corporate sector.”

It’s a proven technique too, dating back to at least the mid 1980s; ten years after the Toxic Release Inventory (TRI) laws were passed in 1986, US toxic chemical emissions from companies had been slashed by over 60%, a feat widely attributed to their emissions being open to public scrutiny.

Opposition to the amendment is likely from some business quarters – but Paul Dickinson, CEO of the Carbon Disclosure Project, is keen to stress the business case for such legislation: “Some companies may find the process of reporting onerous to begin with, but they will also benefit from the process of measuring and reporting emissions, which can identify scope within their business for emissions reductions. Emissions reductions and energy savings is good for cutting costs and that is good for business.” - Jon Wallace

15 April 2008

Jon Wallace