The Government have published new guidance for corporate sustainability reporting.
According to an article published in Business Green, the Government launched consultation on sustainability key performance indicators and new regulations requiring listed firms to disclose carbon emissions.
The article read that the government will unveil new proposals designed to make it easier for businesses to demonstrate their sustainability performance to customers and investors, whilst also complying with soon-to-be introduced carbon reporting rules.
The Department of Environment, Food and rural Affairs (Defra) are still to launch two consultation exercises on new guidance for corporate sustainability reporting and mandatory emission reporting requirements, which were announced by the government at last month’s Rio +20 Earth Summit.
In a workshop released by Defra, Sustainability Reporting: developments in corporate reporting, it discusses the background, reporting and next steps to ensure adequate reporting.
Discussing the background of the reporting, the primary objectives are to improve the number of companies reporting and also the quality and consistency of what these companies are reporting. Further, it is also important that owners and investors have relevant information, that the Companies Act 2006 sets framework of requirements and that the BIS are currently looking into improving narrative reporting in Annual Reports.
Within the workshop presentation it discusses the Companies Act 2006, saying that it is now dated and revised guidance will be issued for consultation soon. Guidance is given on Environmental Key Performance Indicators, covering the 5 main issues water, waste, emissions (not GHGs), biodiversity and materials.
The new guidance, which builds on existing government guidelines for reporting on a wide range of environmental issues, sets out proposals for how businesses should report on a wide range of green “key performance indicators”, including air quality and emissions, water, biodiversity and ecosystem services, natural materials and waste.
According to Defra, for the first time, the voluntary guidance would provide “detailed advice on how firms can measure and report on their impact on wildlife and natural services such as clean air, clean water, food, timber, flood protection and welfare benefits.”
Meanwhile, the draft regulation on mandatory carbon reporting requirements confirms that from April next year listed companies in the UK will have to report on their greenhouse gas emission each year in line with government standards.
Environment Minister Lord Taylor of Holbeach, spoke to Business Green and said both the KPI guidance and the new carbon reporting rules could provide a boost to UK firms.
“Sustainability reporting is an area where we can provide business with a really useful tool with which they can impress investors and markets. A lot of British companies are quite far down the track in this area, and are now exporting this around the world. It’s a really good policy to have been able to set up.”
He also rejected criticism from some quarters suggesting mandatory carbon reporting rules would impose unnecessary red tape on businesses.
“That view is based on a misreading of carbon reporting. This is an issue where investors want assurance that the companies they invest in understand this issue and it is not a marginalised back room issue handled buy a few specialists in the business, but a main boardroom issue. The requirement to report on this is something that will engage all senior management and I think it is a prerequisite for businesses today.”
The next steps laid out in the Defra workshop presentation are:
- Government decision on whether to introduce regulations for companies due soon
- Sustainability reporting an issue for Rio+20 Summit
- Consistency project on sustainability reporting
- Consultation on environmental KPIs
- WRI currently looking at how companies account for Green Energy. Review of Defra guidance on what counts as an emission reduction.
- Review of conversion factors
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