Greenhouse gas emissions are experiencing net benefits, such as cost savings and energy efficiencies.
- Most companies believe the benefits of reporting outweigh the costs
- 65% spending up to £50,000 on reporting greenhouse gas emissions
- Government set to consider mandatory reporting requirement decision
Despite no mandatory reporting requirements or consistent measurement standards, a new research study by PwC and the Carbon Disclosure Project (CDP) shows large businesses, which are measuring and reporting their greenhouse gas emissions are experiencing net benefits, such as cost savings and energy efficiencies.
Because of the measurement and reporting process, there is now boardroom pressure to tackle climate change, reduce carbon emissions and achieve energy and operational savings, as well as creating brand building benefits.
Nearly three quarters (72%) of companies surveyed said they now have a corporate climate change strategy designed to reduce greenhouse gas emissions, which is linked to their emissions measurement and reporting programme.
Alan McGill, partner, PwC, and specialist in reporting said:
“Getting hard data on emissions is pin pointing risks and opportunities for business, and helping them understand how they deal with climate change.”
“The range and wealth of information now available to companies means the existing corporate reporting model has to change. Comparable, credible information enables businesses to be held to account on their performance, and forces them to become more economically efficient around energy and environmental impacts.”
Joanna Lee, Chief Partnerships Officer at CDP commented:
“Reporting drives the action of measuring, helping companies to identify opportunities for emission reductions. It also helps companies set meaningful and achievable reduction targets, as well as advancing better risk management and increased awareness of new market opportunities.”
The report found that most companies believed that the costs of reporting are not financially material to the business, with the majority of businesses (65%) spending up to £50,000 on reporting greenhouse gas emissions and over 50% spending less than £50,000 on measurement.
Against quantifiable business costs and benefits, 60% of companies found there to be a net cost of reporting, however when considering wider intangible benefits such as reputation and consumer awareness, 53% of companies said there was a net benefit.
Benefits were reported in energy and other resource savings. While there was no discrete pattern arising from the responses, around 14% of respondents quantified energy cost savings of over £200,000, suggesting that the benefits could be substantial for some companies.
In advance of a decision by the government on mandatory reporting legislation early next year, nearly half of the respondents identified pressure from investors as the biggest driver in measuring and reporting. Companies said the distinction between voluntary and mandatory reporting is already blurred with schemes such as CDP evolving to become quasi – mandatory. Many companies responding to the survey were also subject to the EU Emissions Trading Scheme or the Carbon Reduction Commitment, requiring measurement and reporting of emissions.
Alan McGill, partner, PwC said:
“A standard, regulatory reporting regime would mean reporting could more accurately reflects the entire scope of a company’s risk profile and attitude and encourage much more widespread use of environmental information in investment decisions.”
This report will be submitted to Parliament today as part of wider analysis commissioned to inform the government’s decision on mandatory reporting. A decision is expected in early 2011.