Sustainability reporting clearly becomes de facto law for any business. Some businesses may already report e.g. their greenhouse gas emissions but it would be a misconception that there is little to do. As in the aforementioned evolving environment there are often still more questions than answers.
There is work to be done to conclude on the relevant reporting standards and decisions on the position in the annual report and the scope of mandatory assurance (if any) to be provided. There is likely to be a major increase in management focus required.
We would advise business to begin working now on a more robust standard of emissions measurement and wider sustainability reporting. We can help you do this.
It is clear that the reporting will be focused on by investors and other important stakeholders. Early adoption is likely to be strongly encouraged. Getting the numbers wrong and needing to restate them in the future will not be acceptable.
Compared to mainstream financial reporting, greenhouse gas and sustainability reporting generally is however less well controlled.
KPMG has 20 years’ experience meanwhile, having scoped e.g. the first ever greenhouse gas emissions assurance.
We can provide you with a number of services, tailored to suit your level of maturity. These could range from a readiness review through to external assurance on your reporting.
It is likely that part of your financial reporting teams will be taking increasing ownership of this area of reporting. You also may want to seek assurance over both your greenhouse gase reporting and wider sustainability reporting.
KPMG Sustainability is here to help: please further explore our website for more information and feel free to contact us any time.
The new regulations will be introduced from April 2013. They will be reviewed in 2015, before ministers decide whether to extend the approach to all large companies from 2016.
KPMG’s Climate Change and Sustainability Practice has been tracking this legislation closely and was one of the respondees to the consultation process last year.
At the Rio+20 Earth Summit last week, the UK’s deputy prime minister announced plans which will see the UK as the first country to make it compulsory for companies to include emissions data for their entire organisation in their annual reports.
Greenhouse gases, such as carbon dioxide, nitrous oxide and methane are causing climate change, leading to global temperature increases, sea level rises and dangerous changes to patterns of drought and flooding. More than 30 billion tonnes of CO2 are emitted globally each year by burning fossil fuels and the concentration of CO2 in the Earth’s atmosphere is now higher than at any time in at least the last 800,000 years. The UK is committed to cutting UK carbon emissions to 50% of 1990 levels by 2025 whereas Belgium is confident to reduce those to 80% by 2020 in first instance having committed to the EU 20/20/20 climate plan.
UK Deputy Prime Minister, Nick Clegg said: “Counting your business costs while hiding your greenhouse gas emissions is a false economy.” Secretary of State for the Environment, Caroline Spelman said: “Investors are now looking hard at the green credentials of businesses, and the reporting of greenhouse gas emissions will give them vital information as they decide where to invest their money.”