Larger private and listed companies are required by the Companies Act 2006 to report on greenhouse gas emissions. For smaller companies reporting greenhouse gas emissions is currently voluntary but this is likely to change if the UK is to meet emissions targets.
In the freight sector, larger and listed companies must already file directors’ reports stating the annual quantity of greenhouse gas emissions created by the company.
The UK government is keen for smaller companies, including freight forwarders not caught by the current mandatory requirements to follow them. There may be an advantage to those smaller companies who do so if it helps them assess their own compliance with current and proposed environmental regulation or use green credentials as an effective marketing tool. However there are also risks.
The Financial Reporting Council (the body responsible for enforcing compliance with financial reporting obligations under the Companies Act 2006) has the power to impose sanctions for failing to compile company reports properly, even where the error relates to a voluntary disclosure.
Reporting emissions should therefore be approached with caution but there is an opportunity here to gain a market advantage. The calculations are relatively straightforward but specialist advice should be sought on:
- the FRC reporting requirements
- how to identify the scope of what needs to be reported – for example third party’s emissions caused by your activities may be within scope
- using green credentials in marketing – there opportunities but also pitfalls
To find out more contact Tozers on 01392 207020 or [email protected]