MPs support tough bill on CO2 reporting

By Alex Barker and Fiona Harvey
Published: October 29 2008 02:00

Mid-sized companies face mandatory reporting of their carbon emissions from 2012 after MPs last night passed sweeping legislation setting ambitious targets to tackle climate change.
The climate change bill, approved by a clear Commons majority, commits Britain to slashing greenhouse gas emissions by 80 per cent by 2050, in what is the world's first legally binding national emissions reduction target.
The measures passed relatively smoothly after the government defused controversy through a series of critical concessions to placate backbenchers and environmental campaigners.
Most significantly, ministers halted a growing revolt over the proposed exemption of aviation and shipping from the targets by saying the sectors would be "taken into account" once a method of measuring "international" emissions was found.
Ed Miliband, energy secretary, also gave ground by raising the emissions reduction target from 60 to 80 per cent and including all six of the main greenhouse gases, not just carbon dioxide.
The law places new responsibilities on large and medium-sized companies to disclose their carbon emissions and sets out a process for establishing more rigorous common reporting standards. It does not define exactly how big a company has to be to fall within the rules.
Under the bill, corporate reporting will be mandated from 2012. But before then ministers plan to review how it should be implemented and will retain the power to introduce a voluntary scheme, if that is considered more effective. A consultation will also begin on whether smaller businesses should face the same reporting requirements.
Many companies already disclose their carbon dioxide output, either under existing regulations or voluntarily. Heavy industry covered by the European Union's emissions trading scheme must monitor their discharges, while thousands of retail outlets, banks and other commercial premises will have to begin emissions trading from 2010 under government regulations called the "carbon reduction commitment".
Joan Ruddock, minister for energy and climate change, said the move would be valuable to shareholders by allowing companies to demonstrate "their green credentials".
The CBI employers' organisation welcomed the move. Neil Bentley, director of business environment, said reporting would help provide "a clear picture of . . . environmental impact" to company stakeholders.
But he added: "There will inevitably be a cost associated with mandating carbon reporting and that is why it is so important that a simple and standard method is devised."
The inclusion of aviation and shipping in the emissions targets was attacked by the airline industry. Michelle Di Leo, director of the pro-aviation group FlyingMatters, described it as a "hollow victory" for environmentalists that was both "ineffective and unfair".
* Companies should find it easier to put carbon labels on their products with the publication of a new standard today.
The government has worked with BSI British Standards to create a labelling formula, by which companies can work out the emissions resulting from the manufacture of their goods.
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Copyright The Financial Times Limited 2008