The carbon footprint reporting of the UK’s top 100 listed companies is highly variable claims Deloitte and only a handful of companies come close to complying with current UK government guidance [1]. According to Deloitte’s analysis, published today, many companies failed to make basic disclosures around the reporting methodology used, or accounting principles applied, highlighting a lack of transparency around measurement principles and reporting of carbon footprints.
Jenny Harrison, director in Deloitte’s energy practice and carbon reporting and assurance team, said: “The wide variety of both formal and informal carbon reporting practices identified does not facilitate comparison between companies or industry sectors, making it difficult to evaluate the relative performance of companies in monitoring and reducing their carbon footprint, a primary goal of the government in publishing the Defra guidance. According to Deloitte, the results highlight the need for a significant overhaul of existing carbon reporting practices if DEFRA guidelines become mandatory[2].
“Few companies made disclosures explaining year-on-year movements in sufficient depth to enable readers to gain a real understanding of a company’s performance in the year in reducing their carbon footprint, or the appropriateness of targets set.
Highlights from the survey include:
- 57% of companies reported carbon information to some degree and all but one company in Tier 1[3] did so;
- 37% of companies formally reported numerical data on their carbon footprint;
- 20% of companies formally reported a specific target in relation to carbon reduction;
- Only 9% of companies disclosed that information on carbon had been reported in line with the Defra guidance; and
- Only 8% of companies stated that their reporting information had been assured by a third party.
The survey highlights a number of ‘best practice’ disclosures to show how leading companies are reporting elements of their carbon footprint. It also includes a reporting checklist and illustrative carbon disclosures for an annual report which draws on the report’s findings. -ends-
Background Notes
[1] In September 2009 the Department of the Environment, Food and Rural Affairs (‘Defra’) published guidance on how to measure and report greenhouse gas emissions.
[2] The UK Climate Change Act 2008 (CCA08) requires government to determine whether to mandate reporting on greenhouse gas emissions from April 2012.
[3] The sample was stratified into three categories based on market capitalisation; the top 35- companies (Tier 1), companies ranking from 351-750 (Tier 2) and the smallest 350 listed companies (Tier 3).
Last Updated: 8 November 2010