The regulations for mandatory GHG reporting for quoted companies have recently been finalised and we have updated our guidance to reflect the current state of play.
Our revised guide is available here and here are the key points:
- The regulations come in to force for year ends on or after 1 October 2013.
- In the first year companies can either extrapolate to 12 months if they do not have data for the full year, or they can report the they have and explain why this is less than 12 months.
- Detailed guidance on materiality is not yet available but similar general principles apply as to other areas of corporate reporting.
- Companies should report for the same period as the financials but can be it different if the majority of the GHG reporting period falls within the financial year and the difference is disclosed.
- Reporting requirements are for the emissions for which the company is responsible. Where this differs from the consolidated financials, for example by including those of an associate company that is equity accounted for, this must be disclosed and the reasons explained.
- Emissions must be reported for Scopes 1 and 2 emissions in tonnes CO2e. A split between types is required but this is not required fo rthe different Kyoto gases.
- Responsibility is not necessarily the same as what the company pays for directly. Therefore the lessee of a building may have to report the emissions even if they do not pay directly for energy. Where this data is unavailable then companies can either estimate the emissions or state that the building is excluded and explain why.
- Comply or explain: If material emissions are omitted then companies must state what they are and why they are left out.
- As before, there is no prescribed methodology. The GHG Protocol, ISO 14064 and UK Government guidance are all given as examples. The methology(ies) used must be disclosed.
- Information from regulatory schemes can be used but this should be stated as a methodology and may not provide full coverage. E.g. the CRC only covers CO2 and other gases emitted during electricty generation may be material.
- Comparatives are required, except for the first year.
- Emissions must also be stated using at least one intensity ratio relevant to the business.
- There is no requirement for specific assurance or audit. But statutory auditors will have the same requirements as for any other information disclosed in the Directors’ Report.