In current debates around carbon reporting, many businesses are supportive of making this a mandatory rather than voluntary process.  We are at a place where we can no longer rely on voluntary reporting.  Unfortunately many businesses need to be mandated and have responsibility assigned to the Finance function in order to take the issue seriously and realise the benefits of carbon reduction.

However, in a recent speech at a recent event hosted by the Aldersgate Group, Mike Anderson emphasised that the decision on whether to implement mandatory carbon reporting would come down to an assessment of the benefits versus burdens for businesses. It is not enough for business to state that they support mandatory carbon reporting.  In order to introduce the regulation, data is needed to support the case. The necessity of businesses providing data was underscored by questions raised about the assumptions made by DEFRA in its Impact Assessment.  At present the upper end cost estimation of £6 billion for mandatory carbon reporting for all large companies, the preferred option by business in DEFRA’s consultation, far outweighs the benefits proposed.

In the process of consultation, business and industry bodies must not only provide input on the structure of the regulation (eg. size of company to be included, scope to be reported on, importance of independent assurance), but must also provide quantitative detail on the benefits their businesses have gained from reporting.

It is critical DEFRA makes this message loud and clear over the coming weeks ahead of the consultation deadline of 5^th July 2011, as this is likely to be one of the last opportunities for businesses to be heard. Even though over 90%* of FTSE 100 companies measure their carbon footprint, fewer than 10 per cent report their carbon emissions to DEFRA UK standards according to a 2010 Deloitte survey⁺.

Achilles will be responding to the consultation and providing detail on its own benefits and costs from carbon reporting as well as its customers. For example, CEMARS certified Scottish Parliament is committed to becoming a low carbon organisation and reducing its carbon emissions by 42% by 2020 compared to the 2005/06 figures. If the medium term target of reducing emissions by 20% by 2015 is met, the estimated cost savings will be in the region of £245,000 for Scottish Parliament.

This is an opportunity that the UK cannot afford to miss. It should not be seen as reducing the UK’s competitiveness but improving it as businesses become more efficient and adopt a more sustainable model.

*Referenced in the meeting by Colin Baines (Campaigns Advisor at The Co-operative Group)

⁺Deloitte (2010) Carbon reporting to date: Seeing the wood for the trees. London.

Lucy d’Arville is the director of the carbonReduction programme at Achilles Information Ltd.