UK announces carbon reporting move as Rio+20 fails to impress

Amid low expectations, political divisions and economic uncertainties, last month’s UN Conference on Sustainable Development saw $513bn (£328bn, €410bn) in funding committed to sustainable development by governments, corporations, civil society and other groups.

World leaders also pledged a long list of actions, such as planting 100 million trees, empowering 5,000 women entrepreneurs in African green economy businesses and recycling 800,000 tons of PVC.

The UK government announced the introduction of mandatory corporate carbon reporting measures for all main London stock market-listed companies, to be introduced in 2014, and a commitment to extend this to all large UK companies two years later.   

Yet, despite the signatures of 190 nations to strengthening global environmental management, scientists and NGOs denounced the ‘outcome document’, The Future We Want, with Greenpeace leading the charge by branding it a ‘failure of epic proportions’.

Business groups had criticised the UK government earlier this year for delaying a decision on its carbon reporting measures (EP, May 2012, p1), but the announcement was among the week’s highlights and promises to link a company’s share price to the cost of its emissions.

As a result, 1,800 of the UK’s largest listed companies will be required to publish data on their CO2 emissions using a universally-consistent format in their corporate earnings reports.

This process is intended to increasingly enable countries to put a value on their ‘natural capital’ – natural resources, rainforests and clean water – and include it in their GDP figures, known as GDP+.

Although some UK companies expressed concern at the resulting extra burden, the CBI business group broadly welcomed the measure as a means of standardising reporting methods.

Rhian Kelly, the CBI director for business environment policy, said: “We have been calling for mandatory carbon reporting for some time. It is an important way to help businesses save money and emissions. Provided this is done in a sensible way, this announcement is to be applauded. To avoid unnecessary duplication, the government now needs to scrap the Carbon Reduction Commitment.”

However, the conference failed to stem criticism of governments for failing to decide on meaningful climate change mitigation and adaptation measures.

Corporations have suffered similar mounting criticism. The Dialogue on a Convention for Corporate Social Responsibility and Accountability recently said: “Voluntary corporate social responsibility reporting has made significant contributions to corporations’ operation.

“However, the incremental progress of such initiatives poses environmental and societal risks.”

And Greenpeace hinted that corporate boardrooms could become the target of new direct action. Executive director Kumi Naidoo said: “We didn’t get the future we want in Rio, because we do not have the leaders we need.

“The future we want was never going to be decided in Rio. It is being decided, each and every day, in capitals and boardrooms around the world. That is where we need to turn our attention.

“Rio+20 has been a failure of epic proportions. We must now work together to form a movement to tackle the equity, ecology and economic crises being forced on our children.

“The only outcome of this summit is justifiable anger, an anger that we must turn into action.”

 Corporate disclosure of regulatory risks from carbon emissions gives reason for hope, said Mindy Lubber, president of Ceres, the sustainable business coalition, and director of the Investor Network on Climate Risk (NCR), a $10tn investor initiative.

She said Securities & Exchange Commission guidance in early 2010 has produced better corporate disclosure of regulatory risks in the US, but added: “Investors have been heard to some extent [but] companies have not done as well on physical risk disclosure.”