Business Carbon Reporting to Become Law

07 April 2008

An amendment added to the Climate Change Bill last week is expected to go on the statute books this summer. It requires quoted companies to include carbon emission information as part of their annual business reviews. These would list emissions from company cars, boilers and on-site equipment.

Lord Rooker, the environment minister, bowed to pressure from a coalition of backbench MPs and non-governmental organisations – among them Christian Aid and the WWF – to include the amendment at the end of the third reading in the House of Lords.

However, there is criticism that the amendment will add to what some see as the burden of regulation on British business. Alan Duncan, Conservative spokesman for business, enterprise and regulatory reform, said that it was “heavy-handed bureaucracy”.

Mr Duncan added: “The idea of carbon reporting sounds a good idea but we don’t currently have a standard auditing process for carbon. So until such a mechanism is established, it’s impossible to expect businesses to comply – particularly smaller businesses that are already overwhelmed by heaps of red tape.”

But the coalition between backbench MPS and other bodies argued that existing requirements on environmental reporting were too weak. Under the Companies Act, quoted companies have a responsibility to provide a business review alongside their annual reports. This should include information on the environmental and social impacts of their work, if any, but the amount of information is at the company’s discretion.

Eliot Whittington, political adviser at Christian Aid, said: “We want government to make environmental reporting mandatory, not voluntary. The level of reporting is a power we want the Government to control.”

Mr Whittington said that about 90 per cent of current reporting was satisfactory, but added that it was vital to capture that last 10 per cent.

Jon Trickett, a backbench Labour MP who has championed the amendment, added: “Corporations have been allowed to get away with green-washing their annual reports for too long.”

The CBI said on Friday in response to the news that although it endorsed mandatory reporting and would like to see it implemented by 2013, the definition of carbon emissions was not sufficiently developed for the move to be introduced this year.

Many businesses are not going to like the obligations.

The Bill will be presented to the Commons later this month. The Government could drop the amendment but a Whitehall source suggested this was unlikely as it would be seen to be “highly embarrassing”.

T The Corporate Manslaughter and Corporate Homicide Act that comes into force today is expected to make it easier to secure corporate convictions. There have been seven in the past 40 years, but the Government believes the legislation could result in 12 convictions a year.

Adrian Bever, a partner at law firm Addleshaw Goddard, said that although fines for those found guilty of corporate man- slaughter could be unlimited, the likelihood was that it could average between 2.5 and 10 per cent of the company’s turnover from the past three years.


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