Government introduces mandatory carbon reporting
The government announced this week that listed companies will have to report their greenhouse gas emissions from next year – a move that will affect more than 50 UK property companies, says the British Property Federation.
The data must be included in companies’ annual reports from April 2013. Non-domestic buildings account for 17% of the UK’s total emissions, the BPF notes. The federation had been concerned that the measure would be introduced initially only to ‘large companies’ based on a Companies Act definition – it said many smaller property companies would have been caught by this definition “without having appropriate resource to devote to reporting activities”. The government has confirmed that the measure will be introduced for companies listed on the Main Market of the London Stock Exchange, which BPF chief executive Liz Peace says is a “welcome step”. The policy will be reviewed in 2015 and could be extended to additional companies at that point.
However, the BPF remains concerned about the need for an emissions league table under the CRC Energy Efficiency Scheme. “The aim of the emissions league table was to raise energy efficiency considerations to board level, and there’s a strong argument to be made that this will be more effectively achieved via today’s announcement,” she added.
The federation is concerned that Defra’s voluntary reporting standards – which it expects to be used to inform mandatory reporting standards – use international accounting standards. “International accounting standards concerning the treatment of leased assets have been subject to a significant level of debate over the past two years, and financial ownership can be a poor proxy for control over emissions,” she notes. The BPF intends to work with the Green Construction Board to continue work on producing reporting standards that take account of different spheres of control and influence over resource use in leased commercial properties.
Abigail Dean, director of upstream sustainability services at Jones Lang LaSalle, says: “Listed companies who are not already collecting this information will need to move fast to ensure they are prepared come next April. There are many large players in the property sector who are not listed but these organisations may find that their stakeholders have increased expectations of them to publicly report their emissions. Those who are already recording their emissions for the CRC will be well prepared, although the dual reporting requirements will be viewed as onerous by many.”
