More UK companies need to be setting emissions reduction targets by law to accelerate the transition to a low carbon economy, according to an environmental lobby coalition.
The Aldersgate Group call for firms to disclose their carbon emissions comes after the publication of the Carbon Disclosure Project report FTSE 350 Report (8 October). The CDP is a not-for-profit company, which represents some 475 global institutional investors. It collects key climate change data from some 2,500 firms around the globe and claims to have assembled the largest corporate greenhouse gas emissions database in the world.
The report shows that only 55 per cent of UK firms are disclosing their GHG emissions generated through the direct burning of fossil fuels and purchased electricity. But not indirect ones such as supply chain emissions.
Aldersgate Group chairman Peter Young said: Carbon emissions now represent a significant financial risk for companies and investors. While the CDP has played a crucial role in encouraging companies to report their carbon emissions, this should now become mandatory. Only then can we see how to reduce the UKs corporate carbon footprint, driving transparency and the change to low carbon options.
Deputy director Andrew Raingold said that increasing recycling and reducing waste had a significant role to play in reducing carbon emissions. He said: Waste is extremely important and the Government should do as much as they can to encourage reporting of waste reductions.
At this stage we are arguing to get the legislation in place to make carbon emissions reporting mandatory in the short-term.
More than 230 firms contributed responses to the CDP report.
Environment Secretary Hilary Benn said the CDP was the gold standard for carbon reporting. He added that the Department for Environment, Food and Rural Affairs is conducting a review of the effectiveness of company reporting in helping the UK to meet its climate change objectives. The review will be published in December 2010 and will help the Government to consider whether the reporting of GHG emissions should become a mandatory part of corporate reporting.
Firms disclosing their carbon emissions include big names such as Dominos Pizza, media group Daily Mail and General Trust, Sainsburys and Tesco.
Bank of America Merrill Lynch is one of CDPs sponsors. Speaking at the launch of the report, BoA Merill Lynch for Europe, the Middle East and Africa president Jonathan Moulds said it was crucial that firms disclosed their carbon emissions. He explained: The health of our economy is intrinsically linked to the health of the overall environment.
CDP chief executive Paul Dickinson said a new global deal at Copenhagen would help UK firms set their emissions reduction targets.