Businesses will be forced to report their greenhouse gas emissions from next year, putting the environmental performance of fleets under greater scrutiny.

The UK is the first country to make it compulsory for companies to include emissions data for their entire organisation, including cars and vans, in their annual reports.

Initially, the new legislation will affect only 1,000 businesses listed on the main market of the London Stock Exchange from April 2013.

The new regulations will then be reviewed in 2015, before ministers decide whether to extend the approach to all large companies from 2016.

Deputy Prime Minister Nick Clegg said: “British companies need to reduce their harmful emissions for the benefit of the planet, but many back our plans because being energy efficient makes good business sense too.

“It saves businesses money on energy bills, improves their reputation with customers and helps them manage long-term costs.”

The new level of bureaucracy comes on top of the Carbon Reduction Commitment, an environmental tax that the Treasury plans to introduce next year. What was significant for fleets in those plans was that emissions generated by transport were not included.

However, this new scheme from the Department for Environment, Food and Rural Affairs (Defra) will insist that transport emissions are included, putting the environmental performance of cars, vans and trucks centre stage.

Employees using their own cars on business will not be included.

The announcement comes in the wake of a survey from Lex Autolease which revealed more than one-third (38%) of financial directors opposes the introduction of mandatory carbon reporting.

Mark Chessman, commercial director with responsibility for sustainability at Lex Autolease, said: “Fleet managers must prompt board members to sit up and take notice, because the process of changing the fleet mix and its governing policy will take time.

“This will be a serious undertaking, requiring an important and active role for the fleet manager in many organisations.”

Defra says that greenhouse gases, such as carbon dioxide, nitrous oxide and methane, are causing climate change leading to global temperature increases, sea level rises and dangerous changes to patterns of drought and flooding.

More than 30 billion tonnes of CO2 are emitted globally each year by burning fossil fuels and the concentration of CO2 in the Earth’s atmosphere is now higher than at any time in at least the past 800,000 years. The UK is committed to cutting its carbon emissions to 50% of 1990 levels by 2025.

Reporting is the first vital step for companies to make reductions in these emissions, according to Defra, which estimates it will have reduced CO2 emissions by four million tonnes by 2021.

BVRLA chief executive John Lewis said: “We will be working with Defra to try and ensure that carbon reporting of vehicles is handled fairly and doesn’t present a huge administrative burden for companies.”

However, the BVRLA believes it should include all business mileage, including grey fleet.

Secretary of state for the environment Caroline Spelman said: “We will collect evidence from the first two years of reporting by quoted companies and take a further decision from 2016 on whether the reporting requirement should be extended to all large companies.”

 

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