Leading environmental consultancy Ricardo-AEA is advising companies preparing for new carbon reporting rules to act on transport emissions or risk damaging their corporate reputation. The UK is the first country to make it compulsory for companies to include emissions data in their annual reports. The introduction of the reporting rules will enable investors to see which companies are effectively measuring the magnitude of their greenhouse gas emissions.
Companies are required to report ‘scope 1’ GHG emissions that relate to the direct outputs of the business, as well as ‘scope 2’ emissions that are the consequence of the activities of the business but which occur at other sources, such as the consumption of purchased electricity. The reporting requirement also includes some transport emissions and its scope extends to the overseas operations of the organization. Neither transport nor overseas emissions are covered by most current schemes so determining their scope will be one of the major challenges faced by reporting companies.
“Transport emissions are likely to be a new consideration for many businesses and it can be a challenge to determine those which fall within the scope of the new rules,” commented Christine St John Cox, Ricardo-AEA’s carbon management knowledge leader. “Companies should therefore act now to identify which transport emissions they are responsible for, and which they will need to report.
“This can be particularly complicated for vehicles used in the transportation of materials, products, waste and employees. It’s very easy to assume that these emissions are not covered by the new regulations, when in actual fact they could be. Unfortunately, getting this classification wrong could risk damaging the reputation of your company.”
Where a company has either financial or operational control of the transportation of good and services, then emissions would fall under Scope 1 and be reported, Christine St John Cox advised. “However this needs careful consideration and is just one example of the many issues businesses face,” she added. “As one of the UK’s leading environmental consultancies backed by the resources of a global organization, Ricardo-AEA is ideally placed to assist companies in meeting the requirements of the new regulations.
“The good news for businesses is that monitoring and reporting in this way helps to identify opportunities to cut emissions. And as transport accounts for a significant proportion of operational costs for many organizations, there is the potential to make significant financial savings, alongside the reductions in carbon.”
Companies can download a free Ricardo-AEA guide on mandatory reporting here.