With the focus of the globe’s developed economic powerhouses increasingly turned to the plight of our natural world, and with the British Government’s commitment to net-zero emissions by 2050, carbon accounting has risen to the top of the corporate reporting agenda.
Increasingly, stakeholders, governmental bodies not least among them, are demanding greater transparency and clarity with regards to a firm’s emissions. As of April 2019, government imposed Streamlined Energy and Carbon Reporting regulations were extended to an estimated 12,000 businesses.
With that considered, our team at Emitwise, have partnered with the excellent and analytical minds of Mazars International to consider current trends in emission reporting.
This report, compiled of Greenhouse Gas disclosure records from FTSE 350 companies that have had to disclose their emissions since 2013, considers records disclosed as part of 2017 and 2018 year-end reports.
It is our hope that this report will shed light on current inadequacies in the sphere of carbon accounting, that it will help inform and predict the evolution of the practice and that it might provide a helpful schematic on reporting for companies that will have to report on their emissions for the first time.
Our findings suggest room for improvement. Broadly speaking, larger companies who are principle emitters in this country, should do more to improve transparency. Businesses of this scale could improve the quality of the information that is relayed alongside their carbon reports. Smaller businesses could improve the consistency of their information.
Across the board, businesses large or small, should be expected to be able to produce comprehensive explanations of year-on-year variations in their accounts. Our study often found large changes, from one year’s emission accounts to the next. These variations, without qualitative explanations, suggest a cause for concern as to how raw data is being collated and converted.
The Biggest Emitters. Are Emissions Decreasing?
It should be noted that our report only considers the 2017 and 2018 year-end Director’s reports. Furthermore, our reservations about the transparency and accountability of the data must be considered alongside our results.
The data collected suggests an average decline of 5-6% in the total scope 1 and 2 emissions amongst FTSE 350 companies.
The largest emitters, by sector of industry and in order of descending CO2e emissions, are Energy, Basic Materials, Consumer Discretionary and Industrials.
The new SECR regulations represent a renewal of our country’s commitment to a greener future. In order to comply with the new carbon accounting expectations, our analysts suggest three areas for improvement.
In order to account for and control emissions comprehensively, companies must:
- Consistently implement systems, processes and controls that will ensure the reliability of primary data.
- Integrate the management of emissions with business operations to ensure the relevance of collated data.
- If data is to be mappable and accreditable to different sectors of a business’ operation, then integrated internal systems should be created.
The summary above provides a brief overview of our report’s findings. If you want to access the document in full, you can do so here.