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Measuring and reporting environmental impacts

In September 2009, Defra, in partnership with the Department for Energy and Climate Change (DECC), published guidance for businesses and organisations on how to measure and report their greenhouse gas (GHG) emissions: Guidance on how to measure and report your greenhouse gas emissions

The guidance explains how businesses and organisations can measure and report their GHG emissions as well as set targets to reduce them. The guidance is aimed at all sizes of business as well as public and third sector organisations.

Environmental Reporting Guidelines – Key Performance Indicators (KPIs) (PDF 347 KB). These guidelines to help companies to identify and address their most significant environmental impacts.  The guidelines outline how companies might begin to set targets/KPIs to measure environmental performance against. Companies can make use of standard business data already collected, for example, from Environmental Management Systems and utilities bills.  The environmental guidelines provide guidance on how data could be reported.

Why report?

Companies that measure, manage and communicate their environmental performance are inherently well placed.  They understand how to:

  • improve their processes,
  • reduce their costs,
  • comply with regulatory requirements and stakeholder expectations,
  • and take advantages of new market opportunities.

Failure to plan for a future in which environmental factors are likely to be increasingly significant may risk the long-term future of a business.

Good environmental performance makes good business sense. Environmental risks and uncertainties impact to some extent on all companies, and affect investment decisions, consumer behavior and Government policy.

Companies that currently report on their environmental performance can be found listed on the CorporateRegister.com.

Future decisions being made

As part of its obligations under the Climate Change Act (2008), Defra has published a report on how measuring and reporting of greenhouse gas (GHG) emissions by companies is helping the UK meet its climate change objectives.  The report reviews recent evidence which looks at why companies report emissions and the use of such information by companies and other users such as investors.   It includes some specially commissioned research on the contribution that reporting makes to emission reductions and the associated costs and benefits. This report will help inform the Government’s decision on whether to make regulations requiring businesses to report their GHG emissions.  An announcement on how the Government intends to proceed will be made in early 2011.  

Narrative reporting requirements

The Companies Act (2006), recently made changes to the narrative reporting requirements for UK companies.  All companies, other than small, are already required to produce a business review.  In the case of quoted companies, the directors will be required – to the extent necessary for an understanding of the business – to report on environmental matters, employees and social/community issues. Further information is available on the BERR website.

Amendment to Pensions Act (2001)

In 2001, a new mandatory requirement was introduced for UK Pension fund trustees to disclose how they have considered social, economic and environmental matters. Those companies that disclose this information for example, in environmental reports are in a better position to be considered in investment decisions by trustees.

Sustainability indices

The emergence of ethical indices such as the Dow Jones Sustainability Index and the FTSE4Good index have also helped drive environmental reporting, as companies reporting on their environmental performance are in a better position to be considered for inclusion in the index.

Global reporting initiative (GRI)

In 2000, the GRI produced broader sustainability reporting guidelines for organisations to report on the economic, social and environmental dimensions of their activities products and services and also provides stakeholders with a universally-applicable, comparable framework in which to understand disclosed information.

Page last modified: 30 November 2010
Page published: 16 June 2009