Mandatory Carbon Reporting Interim Advisory Briefing

7/31/2019 Mandatory Carbon Reporting Interim Advisory Briefing

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Envido Ltd | 71-81 Whitfield Street, London W1T 4HG | T: 020 7199 0090 | E: [email protected] | W: www.envido.co.uk

London Birmingham Glasgow Ipswich Manchester Leeds

Mandatory Carbon (GHG)Reporting

Interim energy professionals briefing.

17.07.2012


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Mandatory Carbon (GHG) Reporting | Interim client briefing


London Birmingham Glasgow Ipswich Manchester Leeds 2

About Envido

Envido is the UKs leading provider of

energy, low-carbon and sustainabilitysolutions for private and public sector

organisations.

Our unique integrated solutions are

delivered through the three divisions of

our business:

Opportunity

Consultancy and carbon assessment

services that put a cost figure against

your business carbon emissions and

identify what action is needed to reduce

Technology

Technology design and installation

services that improve energy-efficiency

within the organisational infrastructure

Change

Training and communications

programmes that help staff know what

they can do to reduce carbon in the

workplace

Working with Envido means you will

have access to all the expertise,

resources and technologies you need to

manage energy more efficiently, helping

you to improve your organisations

carbon footprint and bottom line.

Helping our

clients conserveenergy, save money

and boost business

performance

Contents

1. Who will need to report? 3

2. What will they need to report on? 3

3. What will be the first (required) reporting year? 3

4. What methodology will be required? 4

5. What other requirements are included? 4

6. Will audit / verification be required? 4

7. When will we see further details? 4

8. Action for environment and sustainability

professionals 4


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Government has announced that regulations will be introduced to require UK listed companies to

report on their greenhouse gas (GHG) emissions. This interim briefing sets out key points to

support your preparation. Further communication will follow when draft regulations are published

by Government (due at the end of July 2012).

1. Who will need to report?

All UK companies quoted on the main market

of the London Stock Exchange, approximately

1,100 companies (Defra estimate). Around

60% of these companies are already reporting

(Environment Agency estimate), although

most do not do so in line with Defra/DECC

guidance1. Government will undertake a

review and decide in 2016 whether to extend

the regulations to all large companies; thiscould bring a further 24,000 companies into

the reporting regime.

Non-listed large companies and SMEs will all

initially be outside the scope of the

regulations. However, many are being asked

to provide data by larger supply-chain client

companies as time progresses and therefore

would be best advised to start preparing for

GHG accounting as appropriate.

2. What will they need to report on?

Regulations are likely to require reporting of

material Scope 1 and Scope 2 emissions

incorporating the six primary Kyoto gases2

(and converted to CO2 equivalent):

Scope 1 (direct) emissions: i.e. from

activities owned or controlled by an

organisation that releases emissions straight

into the atmosphere. Examples include

emissions from combustion in owned or

controlled boilers, furnaces, vehicles and

emissions from chemical production in owned

or controlled process equipment

1Defra/ DECC (2009) Guidance on how to measureand report your greenhouse gas emissions

http://archive.defra.gov.uk/environment/business/reporti

ng/pdf/ghg-guidance.pdf

2Carbon dioxide, methane, hydrofluorocarbons, nitrousoxide, perfluorocarbons and sulphur

hexafluoride

Scope 2 (Indirect) emissions from energy:

i.e. emissions being released into the

atmosphere associated with an organisation's

consumption of purchased electricity, heat,

steam and cooling. These are indirect

emissions that are a consequence of the

organisation's activity but which occur at

sources which the organisation does not own

or control.

Companies will not be able to choose their

organisational boundary for reporting. As the

requirement to report will fall under the

Companies Act, the organisational boundary

for reporting will need to be that for their

financial reporting, including all non-UK

emissions.

Reporting Scope 3 emissions is not anticipated

to be a requirement. Some environment and

sustainability professionals are supportive of

the regulations requiring specific business

travel scope 3 emissions to be included.

Companies with significant indirect emissions

(e.g. within their supply chains) may decide to

report on such material scope 3 emissions

voluntarily, although they will need to

consider whether this should be in the

directors report.

3. What will be the first (required) reporting

year?

Regulations are expected to come into force

from April 2013 and will set the date from

which companies will need to report.

Companies reporting years for GHG

emissions will be that covered by their

financial report and accounts, these vary

between companies (e.g. some companies

report on a financial year, others on a

calendar year).


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4. What methodology will be required?

It is anticipated that the regulations will not

be over prescriptive on setting a single

methodology. Flexibility is expected to bebuilt in to allow existing reporting to be

incorporated (e.g. returns from the Carbon

Reduction Commitment and Carbon

Disclosure Project schemes). The key

requirement will be for transparent

disclosure.

Defra has already issued voluntary GHG

reporting guidance (2009)3

based upon the

GHG Protocols reporting principles. Defra

also regularly updates and publishes emissionfactors

4 to support companies with GHG

reporting.

5. What other requirements are included?

The regulations will require companies to

report both their gross emissions and also

emissions based on an intensity ratio.

Flexibility will allow companies to select an

intensity ratio that is suitable and relevant to

their business. Companies will also need to

set and report against a base year (of theirchoice)

6. Will audit / verification be required?

Section 496 of the Companies Act provides

that the financial auditor must state in his

report on the companys annual accounts

whether in his opinion the information given

in the directors report for the financial year

for which the accounts are prepared is

consistent with those accounts. As the

regulations will require GHG emissions to bereported in the directors report, they will be

included in the scope of this audit

requirement.

3Defra/ DECC (2009) Guidance on how to measureand report your greenhouse gas emissions

http://archive.defra.gov.uk/environment/business/reporti

ng/pdf/ghg-guidance.pdf4Defra GHG emission factors are available from:

http://www.defra.gov.uk/publications/2012/05/30/pb1

3773-2012-ghg-conversion/

Assurance and verification has an important

role to play in improving the quality of data

published and, for that reason, many

companies choose to carry out some level ofassurance or verification (i.e. for their own

benefit and for that of stakeholders). This will

continue to be possible under the new

regulations

7. When will we see further details?

Companies preparing to meet the new GHG

reporting requirements will be able to review

both the draft and final regulations to confirm

key details5

.Draft regulations are expected to

be published at the end of July 2012 and atwelve week consultation will be held.

Following this consultation period the

regulations will be finalised and introduced by

April 2013.

8. Action for environment and sustainability

professionals

Environment and sustainability professionals

need to liaise with their Finance Director/

Company Secretary to establish whether their

company falls within the scope of the

proposed regulations. Companies that are

covered by the regulations need to ensure

they have a robust data management and

reporting framework that covers i) the GHGs

that will need to be reported and ii) the full

scope of their organisation based on their

financial reporting.

5

http://www.defra.gov.uk/environment/economy/busin

ess-efficiency/reporting/


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Eastleigh Borough Council | Voltage Optimisation




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Mandatory Carbon Reporting Interim Advisory Briefing