Ethical Performance
inside intelligence for responsible business


Reporting delay under fire as UK government risks CSR reputation

May 2012

The UK government has been accused of betraying commitments to enforce compulsory corporate emissions reporting and of introducing a ‘polluters’ charter’ in its latest budget.

The decision of the Department for the Environment, Food & Rural Affairs (Defra) to delay mandatory greenhouse gas disclosure rules, even though the Climate Change Act of 2007 requires its introduction, has sparked widespread condemnation from business leaders and commentators.

The government says it is still considering the results of a public consultation exercise last summer, but industry groups and NGOs have warned that this will undermine the UK’s attempts to turn itself into a low-carbon economy, as well as significantly confuse the legislative landscape around climate change for business.

Defra has merely indicated that it intends to make a final decision on the issue ‘in the coming months’, after ‘some additional time’ spent thinking it over.

Rhian Kelly, director for business environment policy at the CBI, the employers’ organisation, said she was ‘frustrated’ by the decision, and the Institute for Environmental Management & Assessment, a professional body with more than 15,000 members, said it was ‘unacceptable’.

Mandatory reporting is already in place in many economies around the world, including in the US following its introduction in 2010. A recent report by the Global Reporting Initiative and the UN Environment Programme estimated that, of the 142 countries with sustainability disclosure laws, around two thirds made some form of mandatory reporting demand on companies.

Many have suggested the delay may cost the UK its leadership credentials in the area of emissions disclosure and reduction, and that the government is lagging far behind British businesses already pressing ahead with reporting – many of whom are now demanding a more level playing field on the issue.

Vincent Neate, head of climate change and sustainability at KPMG in the UK, told EP that business will want action on the issue “to be as international as it can be”.

He added: “Business will want three things – a level playing field, as low an administrative burden as possible and protection for commercially sensitive information. One concern business will have will be where boundaries are drawn. Not many will readily be able to footprint beyond their immediately controlled operations so standard setters need to take this into account.”

Richard Spencer, head of sustainability at the Institute of Chartered Accountants, added: “I think most people now accept the case for mandatory disclosure of greenhouse gas emissions. This indecision just creates uncertainty for businesses.”

While stalling on mandatory reporting, the government also appears intent on scrapping the Carbon Reduction Commitment. George Osborne, the chancellor, said in his March budget that it is “cumbersome, bureaucratic and imposes unnecessary cost on business”.

The annual budget also provoked controversy because it was considered to be back-pedalling on its much-vaunted environmental ambitions as the ‘greenest government ever’.

Greenpeace said the government’s new position represented “a carbon-belching U-turn” and the Climate Group, a non-profit body that works with businesses, said “the fiscal opportunities for the implementation of clean technology” were missed in favour of tax breaks for oil companies.

Defra | UK & NI Ireland | Political Disclosure

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