Under new regulations, from 1st October 2013 all UK quoted companies (approximately 2400 businesses) will have to report on the amount of greenhouse gases (GHG) they are emitting.
According to Ian Wallbank, Head of Legal & Corporate Services at IMServ, the UK’s largest independent energy management provider, streamlining energy use via the use of smart metering is a critical part of the process.
The UK is the first country to make it compulsory for quoted companies to report their emissions date in their annual Directors report.
According to regulations, a business’ strategic report must cover the six main GHG’s highlighted in the Kyoto Protocol: carbon dioxide, methane, hydrofluorocarbons, nitrous oxide, perfluorocarbons, and sulphur hexafluoride.
The annual report must also include the annual quantity of emissions of carbon dioxide equivalent from activities for which that company is responsible. These activities include the combustion of fuel and the operation of any facility, including those that are mobile, temporary and marine based.
Wallbank has elaborated that ‘this brings into the open, and crucially before shareholders, a new metric. Shareholders will equate greater emissions with higher costs, leaving management vulnerable to questions regarding energy usage’.
‘Further, companies must disclose the methodology used to calculate emissions and the guidance makes clear that you need to state the statutory scheme as one of the methodologies used’.
The new regime will require significant and long term commitment to greenhouse gas emissions compliance. Shareholders will increasingly be looking for year on year reductions.
‘This puts a new emphasis on the need for companies to address energy consumption’, indicates Wallbank. ‘Smart metering technologies provide accurate Real-Time consumption data, flagging up unusual peaks in energy use which enable organisations to change consumption behaviours, introduce monitoring devices and thus realise the energy savings and emissions reductions’.
‘Being smarter about consumption and communicating year on year savings in annual reports will be both beneficial to blue chip businesses and stakeholders. Increasingly, stakeholders are filing sustainability related resolutions, asking companies to set out greenhouse gas emission reduction goals, publish sustainability reports and pursue energy efficiency’.
In conclusion, Wallbank said that ‘from discussion at various networking events, the profession seems to be concentrated on what needs to be done in order to comply with reporting requirements. To my mind, the real emphasis needs to be on what is actually being reported, the story behind it, the planning for the future and perhaps more importantly, the likely impact all of this is going to have on key stakeholders and shareholders. Although shareholder resolutions on sustainability don’t typically receive a majority vote, they can still prompt companies to take action to avoid risks to their reputation. Directors should be wary’.
Adapted from a press release by Emma McAleavey.
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/12082013/smart_metering_essential547/