12 August 2013 – From 1 October 2013 under new regulations all UK quoted companies (approximately 2,400 businesses) will have to report on the amount of greenhouse gases (GHG) they are emitting. According to Ian Wallbank, Head of Legal & Corporate Services at IMServ, the UK’s largest independent energy management provider, streamlining energy use via the use of smart metering is a critical part of the process.
Ian explains, “The UK is the first country to make it compulsory for quoted companies to report on their emissions data in their annual Directors report. The regulations will come into effect in October this year.
“This brings into the open, and crucially before shareholders, a new metric. Shareholders will equate greater emissions with higher costs, leaving management vulnerable to questions regarding energy usage.
“Further, companies must disclose the methodology used to calculate emissions and the guidance makes clear that you need to state the statutory scheme as one of the methodologies used.”
Under the new regime, greenhouse gas emissions compliance will involve a significant and long term commitment. Shareholders will be increasingly looking for year-on-year reductions.
“This puts a new emphasis on the need for companies to address energy consumption,” warns Ian. “Smart metering technologies provide accurate Real-Time consumption data, flagging up unusual peaks in energy use which enable organisations to change consumption behaviours, introduce monitoring devices and thus realise the energy savings and emissions reductions.
“Being smarter about consumption and communicating year-on-year savings in annual reports will be both beneficial to blue-chip businesses and stakeholders. Increasingly, stakeholders are filing sustainability related resolutions, asking companies to set out greenhouse gas emission reduction goals, publish sustainability reports and pursue energy efficiency.”
Ian concluded, “From discussions at various recent legal networking events, the profession seems to be concentrating on what needs to be done in order to comply with the reporting requirements. To my mind, the real emphasis needs to be on what is actually being reported, the story behind it, the planning for the future and perhaps more importantly, the likely impact all of this is going to have on key stakeholders and shareholders. Although shareholder resolutions on sustainability don’t typically receive a majority vote, they can still prompt companies to take action to avoid any risks to their reputation. Directors should be wary.”
According to the regulations, a business’ strategic report must cover the six main GHG’s (Greenhouse Gases) highlighted in the Kyoto Protocol: carbon dioxide (Co2), methane (CH4), hydro fluorocarbons (HRCs), nitrous oxide (N2), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6).
The annual report must include the annual quantity of emissions in tonnes of ‘carbon dioxide equivalent from activities for which that company is responsible’. These activities include the combustion of fuel and the operation of any facility, including those that are mobile, temporary and marine-based.
IMServ works closely with many FTSE 250 organisations and companies within the commercial and industrial sectors, processing around 20 million data items per day. The company offers an all-inclusive portfolio that covers data collection, analysis, reporting and carbon management. For help and advice on how to use smart metering to support emissions data reporting please contact firstname.lastname@example.org.
IMServ Europe Ltd is one of the UK’s largest independent energy data management providers. The company offers carbon and energy management solutions, helping organisations across all sectors to save energy, reduce costs and control carbon emissions.
IMServ offers an all-inclusive portfolio that covers data collection, analysis, reporting and carbon management. To date over 180,000 sites in England, Scotland and Wales are benefiting from its solutions.