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UK Government Carbon Reporting Guidance Goes Largely Ignored

<p>The U.K. government released carbon accounting guidance last year to help organizations measure and disclose their greenhouse gas emissions, but just one in 10 companies in a recent survey is actually using it.</p>

The U.K. government released carbon accounting guidance last year to help organizations measure and disclose their greenhouse gas emissions.

Reporting isn't mandatory, but the government will say in April whether it will require companies to disclose carbon footprints, or explain why it declined to mandate the practice.

A year later, just a fraction of the country's largest companies are following the guidance, according to a new survey from Deloitte, and even fewer companies had their reporting information assured by a third party. Taken together, the results show many U.K. companies may face a wholesale shift in carbon accounting practices should the reporting rules become law.

"Deloitte's survey shows a high degree of variation in carbon reporting practices, and many companies, particularly those outside the top tier of FTSE companies, could do better," Jenny Harrison, director in Deloitte's energy practice and carbon reporting and assurance team, said in a statement Monday.

"The wide variety of both formal and informal carbon reporting practices identified does not facilitate comparison between companies or industry sectors," she said, "making it difficult to evaluate the relative performance of companies in monitoring and reducing their carbon footprint, a primary goal of the government in publishing the Defra guidance."

Deloitte surveyed 100 U.K. companies on the FTSE index for the report "Carbon Reporting to Date: Seeing the wood for the trees." The companies were also broken up into three groups based on market capitalization, with "Tier 1" companies being the biggest and "Tier 3" companies being the smallest.

The survey found that overall, 57 percent of all companies reported carbon data. By size, 97 percent of Tier 1 companies reported emissions, compared to 58 percent of Tier 2 companies, and 15 percent of smaller Tier 3 companies.

Just 10 percent of companies referred to the U.K. government guidelines released by the Department for Environment, Food and Rural Affairs (Defra). Eight percent of companies tapped a third party to verify the information.

Twenty percent of companies reported their Scope 3 indirect emissions, most commonly impacts related to business travel. About half of companies reported an absolute emissions reduction target, while 30 percent disclosed an intensity target. Five percent reported both.

The survey found that companies seldom disclosed how they calculated their numerical carbon data, making it hard to make comparisons. And although the survey suggests UK companies lag in following the Defra guidance, not all agree with it. For example, telecommunications giant BT objected its rules for reporting renewable energy purchases in its recent sustainability report.

"This year the UK Government published new voluntary company reporting guidelines," BT wrote in its report. "These differ from previous guidance. They now recommend that carbon emissions from electricity purchased with zero or low carbon emissions should be reported at the 'grid average' intensity. This removes any incentive for large energy consumers such as BT to purchase renewable electricity. We feel this is a retrograde step, especially given the hugely challenging targets the U.K. has for increasing the amount of renewable electricity over the next decade.

The UK has set a goal of reducing emissions between 26 percent and 32 percent by 2020.

Image CC licensed by Flickr user o5com.

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