Mandatory carbon reporting ‘good for business’, say companies and campaigners
1 Aug 2011 02:26 PM
New research reveals that the benefits of mandatory carbon reporting for large businesses are much greater - and the costs lower - than the Government has suggested.
The new report, commissioned by Aldersgate Group, The Co-operative Group, Christian Aid and WWF found that Defra’s impact assessment (IA) of mandatory greenhouse gas reporting overestimated the total costs of MCR for large companies by up to £4,600m (over 420%), and underestimated the benefits by £980m (at least 230%).
Defra’s impact assessment, carried out as part of its recent consultation on MCR which closed on 5 July, estimated that the total costs (over ten years) of MCR for large companies could be as much as £6,025m and the total benefits a maximum of £1,355m.
The new research suggests that the official impact assessment has not factored in the benefits that carbon reporting would bring over time, questions some of the costs assumptions and it argues that some benefits and costs have been omitted.
The groups that commissioned the report argued that the findings show that mandatory carbon reporting would be good for business and play a vital part in our transition to a low-carbon economy.
Even though the new analysis shows that MCR will benefit UK businesses the groups that commissioned the report are concerned that major benefits to society and the environment will be missed in the final decision because they cannot be quantified as a benefit to UK business. The groups urge the Secretary of State for Defra, Caroline Spelman, to factor in these less measurable but real benefits in her final decision this coming autumn.
Sue Charman, One Planet Finance Leader at WWF-UK said: “The best companies are already measuring and managing their carbon as a matter of best practice, and it’s time the laggards were made to do so as well. Voluntary carbon reporting has played its part but now it’s time for mandatory carbon reporting to be brought in to really drive efficiency savings and drive down greenhouse gas emissions.”
Peter Young, Chairman of the Aldersgate Group, said: "For any company, it is clear that what gets measured gets managed. That is why mandatory carbon reporting has the support of mainstream businesses in the UK, who demand a more consistent and transparent reporting framework. Both the Conservatives and Liberal Democrats pushed for mandatory carbon reporting in opposition and it is vital that they hold their resolve."
Paul Monaghan, Head of Social Goals and Sustainability, at the Co-operative Group said: “Voluntary initiatives have achieved much in recent years but have now run their course with plateaued participation. Mandatory reporting must now be introduced as the only way to deliver the necessary improvements in disclosure. This would help companies to manage and reduce their emissions and help investors to factor carbon risk into their investment decisions. Such is the level of expectation that reporting will be made mandatory for large companies that any delay could be seen as a backward step and place at risk some of the gains made in reporting in recent years.”
Paul Brannen, Head of Advocacy and Influence at Christian Aid, said: “UK companies are responsible for a very significant share of global emissions – and fuelling climate change which is having a devastating effect on people living in poverty around the world. Those people need the Government to introduce a robust version of mandatory reporting that will give companies and investors all the information and the incentives they need to clean up their acts – and help solve the climate crisis.”
The coalition say that MCR has huge business support, noting that in January a letter to the Secretaries of State at Defra, DECC and BISwas signed by 190 businesses, NGOs and civil society organisations.
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