Smokestack and Gas Emissions Against Blue Sky

Regulations are due to come into force on 1 October, which will require UK quoted companies to report their year-on-year emissions. Under the reforms, companies – particularly those in energy intensive industries – will have to declare GHG emissions associated with business activities as part of their annual directors’ report – or face stiff financial penalties for non-compliance.

The changes are part of the draft Greenhouse Gas Emissions (Directors’ Report) Regulations 2013 and affect a number of activities. These include: the combustion of fuel in any premises, machinery or equipment; the use of any means of transport, machinery or equipment; the operation or control of any manufacturing process; and the purchase of electricity, heat, steam or cooling.

There will be stiff financial penalties for non-compliance. Yet, feedback from clients indicates that companies in the region remain totally in the dark about when mandatory reporting needs to be carried out, and what will be required of them under the legislation.

To clarify, the duty to report applies to the year ending on or after 1 October 2013. Companies will be expected to report on a ‘comply or explain’ basis – either to confirm their co-operation, or explain their failure to do so in their published accounts, stating what steps are being taken to ensure compliance in the future.

The true impact of the legislation – in terms of the cost of non compliance, the burden on jobs and the investment required to comply – is still very much uncertain. However, there is a clear need for the Government to raise awareness of the reforms amongst affected companies. It is likely that, from these reforms, an entire secondary industry will emerge, with a myriad of consultancy services likely to enter the North West market over the coming years.


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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.