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This year is set to see a major change in the way businesses are run, as well as a shift in the way companies see corporate responsibility. For the first time ever, UK listed companies will not only have to reveal their greenhouse gas emissions in their annual reports but they will also have to report on how environmental and social issues will impact their business.
But are British companies ready for the move? According to Business Green, most businesses seem to be comfortable with the impending changes to reporting rules. Douglas Johnstone, head of clean tech and sustainability in the UK for Ernst & Young, commented that managers are increasingly seeing carbon emissions as a key business issue and are recognising the importance of disclosing information related to environmental matters. Moreover, the change did not happen overnight and managers were able to see it coming for a long time, so they have had the time to embrace it and come up with strategies, he added.
Not everyone shares this optimism. According to Simon Corley, CFO at carbon software specialist Cloudapps, managers lack a clear understanding of what they are required to do. They have had some experience in Carbon Reduction Commitment (CRC) reporting and they assume that mandatory carbon reporting will basically be the same, but actually these are two very different things, he claims.
Whatever the truth is, businesses should keep in mind that the legislation is due to be presented in parliament over the next few weeks and it is predicted that it will be accompanied by wider changes to the Companies Act, aiming to promote more advanced environmental reporting.