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Reports must show carbon use

UK companies will have to disclose their carbon emissions in their annual
reports when changes are made to the climate change bill, following backbench
pressure.

Expected to go onto the statute books this summer, the additional legislation
requires companies that file business reviews with their annual reports to state
their carbon emissions.

Information on how emissions are generated, such as business travel, fleet
emissions and energy use, among others, will need to be included.

The new rule is sure to be approved now the House of Lords has made the
amendment to the climate change bill, following pressure from backbench MPs and
non-governmental organisations such as Christian Aid and the WWF.

Currently, under the Companies Act, UK-quoted companies must provide a
business review alongside their accounts. The business review should include the
environmental and social impact of the company, but the amount of information
disclosed is left to the discretion of the company.

Late last year, environment secretary Hilary Benn introduced a set of
amendments and targets that the climate change bill should aim to achieve. They
include:
• The introduction of a carbon-reduction commitment – a cap-and-trade scheme for
large organisations not already covered by other schemes; and
• Ensuring the renewable transport fuel obligation delivers environmental
benefits – a scheme that aims to increase carbon savings through the road
transport sector.

These changes and targets are to become law later this year when they go
through the Commons. Observers believe that current environmental reporting
requirements are too weak to meet the climate change bill target of reductions –
between 26% and 32% by 2020 and 60% by 2050.

Chancellor Alistair Darling announced in this year’s Budget that the climate
change bill could be further amended to incorporate an increased emission
reduction of 80% by 2050, putting further pressure on businesses to adapt.

Useful links
For more information, go to
http://services.parliament.uk/bills
and click on climate change bill.

DEFRA is at
www.defra.gov.uk

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