UK Carbon Reporting: Why It Matters for Your Company & How to Report
The United Kingdom is committed to fighting climate change. To do so, the UK government has set very ambitious targets into law to reduce emissions by 78% by 2035 compared to 1990 levels.
Businesses will now need to quickly get to grips with carbon reporting and identify and reduce their emissions. Since the Streamlined Energy and Carbon Reporting (SECR) came into force on 1 April 2019, 11,900 large companies in the UK were already required to report on their energy use and carbon emissions as part of their annual reporting.
New legislation and proposals issued by the Financial Conduct Authority (FCA) and the Department for Business, Energy & Industrial Strategy (BEIS) will require mandatory climate-related disclosures (including carbon reporting) aligned with the Task Force on Climate related Financial Disclosures (TCFD) for around 480 Premium listed Companies and more than 1,500 UK registered companies with more than 500 employees and more than £500m in annual turnover.
Focusing on best practices, companies can turn what may seem like a complex and tedious task into opportunities to reduce costs, improve their reputation and demonstrate improving performance over the long term.
Here is everything UK companies need to know about measuring, reporting and reducing carbon emissions.
The benefits of carbon reporting
Next to the legal requirement to report on emissions and the intrinsic motivation to improve your environmental impact, carbon reporting actually comes with a variety of benefits for companies.
Companies that have been quick to adapt manage to save millions of pounds. How? By reporting on their emissions, they were able to increase carbon efficiency and significantly reduce operational costs.
Demonstrating commitment to reduce your company’s environmental impact also helps your overall brand and reputation and helps to develop stakeholder relations by demonstrating value to partners and investors.
Last but not least, in the already existing war for talent, the question of whether your business takes care of our planet will impact your recruitment and retention of staff.
Now that the benefits are clear, how do you get started?
Carbon Reporting: What Companies Have to Do
UK corporate environmental regulations such as SECR have increased the requirements for energy and carbon emissions reporting and placed more responsibility on organisations to measure and disclose their emissions.
If your company is entering the carbon reporting space for the first time, it can be difficult to know where to start. But don’t worry, we’ve got you covered with an overview of two of the most relevant UK carbon reporting frameworks: SECR and TCFD.
Overview of UK SECR regulations
The Streamlined Energy and Carbon Reporting (SECR) regulations is a mandatory framework that requires companies in scope to disclose their GHG emissions and energy use for every financial year starting on 1 January 2019.
Overview of UK TCFD
The Task Force on Climate related Financial Disclosures (TCFD) is an international initiative that allows entities to disclose climate-related risks and opportunities and provides the necessary information to investors to help them understand and manage their own climate-related financial risks.
It is based on four thematic areas/pillars:
- Risk Management
- Metrics and Targets.
These standards will become of mandatory character for the following entities:
4 essential steps of carbon measurement & reporting
The carbon reporting process can be broken down into four essential steps that will help your company gain transparency on emissions across your business, create effective reduction strategies and monitor and report on your progress:
Step 1: Analyse your carbon footprint
Step 2: Reduce & avoid emissions
Step 3: Offset unavoidable emissions
Step 4: Communicate your progress and achievements
The future of UK carbon reporting - are you ready?
Companies that meet the SECR threshold already have to accurately report on their carbon emissions. And new legislation requiring corporate climate-related disclosures aligned with the TCFD recommendations is already on the way, making carbon reporting mandatory for even more companies. The task might seem complex, but by following the best practices your company can make sure to get the most out of carbon reporting and benefit from reducing emissions.
Planetly can help you measure, reduce and report your carbon emissions, to not only comply with SECR & TCFD, but to also create real business value. Contact us today to get started.