Large listed firms will have to report levels of greenhouse gas emissions under plans announced by the government.
All businesses listed on the main market of the London Stock Exchange will be under the obligation from the start of the next financial year. Deputy prime minister Nick Clegg announced the plans the Rio+ 20 Summit.
The new regulations will be reviewed in 2015, before ministers decide whether to extend the approach to all large companies from 2016. It is estimated it will save four million tonnes of CO2 emissions by 2021.
The Government said reporting emissions will allow investors to see how effectively companies are managing the cost of greenhouse gas emissions. The plans have been introduced following consultation with businesses, the CBI and the sustainable business organisation Aldersgate Group.
The UK is the first country to make it compulsory for companies to include emissions data for their entire organisation in their annual reports.
Clegg said that counting business costs while hiding greenhouse gas emissions was a false economy.
“British companies need to reduce their harmful emissions for the benefit of the planet, but many back our plans because being energy efficient makes good business sense too,” he said. “It saves companies money on energy bills, improves their reputation with customers and helps them manage their long-term costs too.
“Climate change is one of the gravest threats we face. The UK is leading the urgent action needed at home and abroad.”
More than 30 billion tonnes of CO2 are emitted globally each year by burning fossil fuels. The UK is committed to cutting UK carbon emissions to 50% of 1990 levels by 2025.