Defra (Department for Environment, Food and Rural Affairs) has now published a draft of the GHG reporting regulations for consultation. It gives more information on what companies will need to disclose in their reports.
Greenstone Carbon Management, which provides carbon management software, has produced a summary of what it sees as the important points in the draft regulations:
While the regulation is due to come into effect from April 6 2013, the consultation includes the possibility of moving the start date to coincide with the expected new regulations on corporate reporting from the Department of Business, Innovation and Skills, expected to come into force from October 2013.
Scope 1 (direct) and Scope 2 (indirect, e.g. electricity) greenhouse gas emissions will be included, but not other indirect emissions (Scope 3) such as business travel and outsourced activities.
The methodology used to calculate the CO2 emissions must be included in the report. Companies can use calculations from other reporting schemes, such as the CRC Energy Efficiency Scheme or the EU Emissions Trading Scheme, but must say so in the report.
Some form of intensity ratio must be included, i.e. a figure that expresses emissions in relation to a quantifiable factor that reflects business activity, such as carbon emissions per employee or per £m turnover.
There will be a five year review period for the legislation, but the Government will also review the first two years of reporting in 2015 and then take a further decision in 2016 on whether to extend the coverage to all large companies
There are some aspects worth discussing here. For example, it would be better to have some Scope 3 emissions included initially, particularly business travel, which could uncover some wasteful practices and perhaps dampen demand for air travel. And while carbon intensity should not be the overall benchmark – we need to make absolute reductions in emissions – it will at least allow for comparisons between companies and exert some competitive pressure. You can give your views (until October 17th) via the Defra website.
Whatever the detail, it does open up additional opportunities for suppliers of carbon management software solutions. Greenstone, for example, has developed a programme to support affected companies, including an initial Readiness Assessment and a fixed cost outsourced carbon reporting service. It won’t be the only supplier gearing up for the opportunities.