UK businesses have called for swifter action from the government to expedite plans for mandatory carbon reporting (MCR) rules for large companies.
In the wake of an influential group of leading companies - including M&S, National Grid, Philips, and Sky - taking the government to task for delaying its long awaited decision on emission reporting rules, Sabien Technology chief executive Alan O'Brien said he supported the view that reporting would have “a wide range of benefits.”
He added, “We can understand the frustrations of our clients and UK business over the continuing delays in this matter. However, I don't expect to see guidance from the government on this issue until at least the end of this year or early 2013. The major sticking point on issuing MCR guidelines is the cost of implementation and administering the scheme. DEFRA has based its cost assumptions for this on those applied to the carbon reduction commitment (CRC), a scheme that we now know will be watered down and simplified later in the year. So we'll probably have to wait for this revision first before we see any further clarity and guidance on MCR from the government.”
He continued, “‘Self regulation’ and thus ‘self determination’ is the preferred approach by responsible business, so why do you need the government to legislate for good housekeeping practices anyway? The government doesn't legislate in other dimensions to optimise efficiencies and thus profit margins.”
O'Brien added that, from working closely with partner organisations such as the Carbon Disclosure Project (CDP), it was patently clear that an efficiently run, mandatory carbon reporting system would facilitate and promote change for the good of both the economy and the environment.
“The recent survey conducted by The Aldersgate Group revealed that more than 75% of the 2,044 adults surveyed across the UK said large businesses should be required to report carbon emissions - so there is clearly a proven, public appetite for this legislation, along with a desire by businesses to get on with it,” said O'Brien.
“The power of the consumer and the extended supply chain should not be underestimated in expecting this from business as a ‘hygiene factor’ - just as you would with other facets of good business practice. Why should energy conservation be any different? However, any catalyst or stimulus that government can provide to accelerate uptake is welcomed.
“Major blue chips are under significant pressure to trim costs over the longer term, and by investing now in technologies designed to reduce energy bills going forward, corporations can ensure sustainable long term growth and competitive advantage - the sooner the government gets on-side with mandatory carbon reduction legislation, the better,” said O'Brien.
A month has now gone by since the original ‘deadline’ imposed by the Climate Change Act - supported by the coalition. The act required ministers to reach a decision on whether to introduce carbon reporting rules by April this year - but now Defra (The Department for Environment, Food and Rural Affairs) has said ministers need additional time to come to a decision.”
A letter sent by the Aldersgate Group to deputy prime minister Nick Clegg in May 2012 underlined the fact that large numbers of businesses want to see emission reduction rules introduced. It argued that they would ‘further encourage business, which is responsible for nearly a third of total UK GHG emissions, to manage and reduce its carbon footprint, leading to reduced energy costs, increased transparency and a greater understanding of material climate risks and opportunities’.
“It is a welcome stimulus - but the real driver needs to be the enhancement of shareholder value and the mitigation of risk i.e. the risk of price volatility for fossil fuels and the reduction of exposure to punitive taxation schemes based on energy intensity and carbon emissions,” said O'Brien.
Supporting the argument for businesses, the CBI also weighed into the debate, with Rhian Kelly, its director for business environment policy highlighting many examples of how effective energy use lowers costs for companies.
“Given the current economic challenges, setting a regulatory framework that encourages greater energy efficiency can bring genuine rewards for UK business,” he said.