All businesses listed on the Main Market of the London Stock Exchange will have mandatory carbon reporting of greenhouse gas emissions from the start of the next financial year (April 2013)under plans announced by the Government in June 2012.

The UK Government published the draft Regulation for mandatory greenhouse gas (GHG) reporting in Directors’ Reports on 25 July 2012. The draft Regulation and accompanying consultation document are available on the Defra website.  Consultation started on 25 July 2012 and will end on 17 October 2012.  They will be reviewed in 2015, before ministers decide whether to extend the approach to all large companies from 2016.

The UK is the first country to make it compulsory for companies to include emissions data for their entire organisation in their annual reports.  The introduction of the reports will enable investors to see which companies are effectively managing the hidden long-term costs of greenhouse gas emissions. The majority of businesses responding to the consultation supported the proposal.

Greenhouse gases, such as carbon dioxide, nitrous oxide and methane are causing climate change leading to global temperature increases, sea level rises and dangerous changes to patterns of drought and flooding.  The UK is committed to cutting UK carbon emissions to 50% of 1990 levels by 2025, and reporting is the first vital step for companies to make reductions in these dangerous emissions.

How does that affect my company?

(see below link to Main Market listing)

The two most important features of the draft Regulation are:

Global emissions, not just those in the UK.

All emission sources owned, operated or controlled by the reporting company are included, not just those in the UK. This means reporting companies will have to have efficient data collection systems for gathering information from global operations, as well as a set of global emission factors.

All greenhouse gases, not just CO₂.

The requirement is for all Kyoto greenhouse gases. Greenhouse gas is defined in section 92 of the Climate Change Act 2008 (c. 27) as carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), hydrofluorocarbons (HFCS), perfluorocarbons (PFCS) and sulphur hexafluoride (SF₆).

The Regulation will apply to approximately 1,400 UK quoted companies, with the possibility that it will be extended to cover all large UK companies in the future. The UK is currently leading the way in mandatory greenhouse gas reporting, but it is likely that other countries will be following the UK experience closely, with a view to replicating the requirements.

If your company falls within the to 1,400 UK companies then it will be required to include a greenhouse gas emissions statement in its directors’ report for the first financial year ending after 6 April 2013.

Now may be a good time to book your ticket for the Carbon Show at the Business Design Centre, London for 23 October

Go here for all companies on the Main Market of the London Stock Exchange (5MB Excel file)

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