Companies listed on the London Stock Exchange’s main market will have to disclose their greenhouse gas emissions from 2013, British Deputy Prime Minister Nick Clegg has announced.
The British government will introduce legislation bringing in the new regulations from April 2013. The Carbon Disclosure Project welcomed the news, and recommended that the British government adopt a climate change reporting framework developed by the Climate Disclosure Standards Board (CDSB), a project of CDP. CDSB has been developing its climate change reporting framework with the support of the UK Department for Environment, Food and Rural Affairs (DEFRA) and “input and advice of the global accounting profession”, the CDP said in a press release.
“This latest move from the government is a much-needed response to market needs and an important step towards improved valuation of environmental risk,” said Paul Dickinson, CDP executive chairman. “After ten years of driving forward corporate disclosure on ghg emissions and climate change information, I’m delighted that the UK government recognises the value of disclosure in accelerating emissions reductions. Regulation is essential in moving us towards a low carbon economy.”
The regulations will be reviewed in 2015, and ministers will assess if the approach should be extended to all British large companies from 2016. Clegg announced the plan at the United Nations Conference on Sustainable Development – otherwise known as the Rio+20 Summit.
The Australian Stock Exchange does not require disclosure of greenhouse gas emissions. ESG reporting is introduced via Principle 7 of the ASX Corporate Governance Council Corporate Governance Principles and Recommendations. Principle 7 establishes how companies should disclose and communicate “material” business risks, including: operational, environmental, sustainability, compliance, strategic, ethical, reputation or brand, technological, product or service quality, human capital, financial reporting and market-related risks.