legal updates
Friday, 11 Apr 2008
climate change bill provisions for companies
The Climate Change Bill currently going through parliament provides a framework for moving the UK to a low carbon economy. The Government is already taking forward a wide range of policies, impacting on all sectors of the economy, to achieve the targets in the Bill. It is crucial, therefore, that all companies understand these policies and the impact they will have on their businesses.
A newly introduced clause to the Bill could, if enacted, have a significant impact on all companies (other than those that are subject to the small companies’ regime for accounts and reports). It requires all companies to include a report on their greenhouse gas emissions in their business review, if they are required to have one in their directors' report under the new Companies Act, which should be publicly disclosed.
Reporting will have to be done in accordance with the Secretary of State’s guidance, which is yet to be published. However, it is likely that the guidance will set out the appropriate content and form of disclosures or any matter necessary to promote the provision of transparent and comparable data regarding the greenhouse gas emissions of companies.
This will require many companies to measure their carbon emissions and make that information publicly available in their annual reports, inevitably leading to even more pressure (and costs) to adopt practices that reduce environmental impact.
Although there is no guarantee that this amendment will be enacted, it is very important to be aware of even potential responsibilities as early as possible. Although some companies already have adequate strategies and procedures in place to reduce and measure carbon emissions, many do not. As there would be financial penalties for non-compliance, it would be wise to take note of this potential statutory obligation and review environmental policies going forward.
If you need any further information or advice on this issue, please contact Jennifer McMullan.