Emission control: we have a problem
Will Defra require companies to measure and report greenhouse gas emissions? With a consultation now underway, the sorry state of corporate responsibility is revealed in a new Carbon Trust report: 40 of the FTSE top 100 companies don’t publish environmental targets. For the rest, there are “significant differences in the rigour and quality of those targets which have been publicly set and reported.” Defra’s somewhat flawed consultation – undervaluing the benefits and over –egging the costs carbon disclosure – points to more of the same.
At stake is the company-level contributions to our mandatory climate change targets. Odd for the greenest government etc to adopt binding CO2 targets, but then leave it to companies to volunteer to take part. One unintended consequence is the excessive focus on those big energy players, in sectors like steel and power supply, that must monitor and report their energy and carbon usage as participants in the EU emissions trading scheme. There is growing concern over burden sharing, or the lack of it, among the rest of corporate Britain, putting excessive pressure on our core manufacturing industries.
The Aldersgate Group, a leading voice for mandatory reporting, argues that the pace and scale of GHG emission reductions required under UK law mean that voluntary approaches outlined in the Defra consultation are inadequate. The Carbon Disclosure Project (CDP), a not for profit organisation that collects information on carbon disclosure on behalf of 534 institutional investors with assets over US$64 trillion, reports that under two thirds (59%) of the FTSE 350 disclosed GHG emissions in 2010. Only 36% of the environmental disclosures appear in audited sections of annual reports. A survey by Deloite of 100 listed companies finds that only 9% disclosed carbon emissions in line with Defra’s guidance.
Defra’s impact suggests that energy measurement will cost staff £500 a day, an unlikely high salary for the personnel involved. And it does not appear to have recognised the potential for cost savings. Take the case of the Magor Brewery, South Wales, a TUC greenworkplace project. Union members working for the worlds’ biggest brewer initiated a project to cut resource use and carbon in a project that has achieved significant results in two years: water usage fell by 46%; electricity usage fell by 49%; heating bills by 23%; and an overall 40% reduction in CO2 emissions. The project has saved £2m in costs and helped increased the level of job security.
With growing stakeholder and investor interest in environmental sustainability, it is likely that many large organisations will come under more pressure to publish targets in the near future.