The benefits of greenhouse-gas (GHG) reporting are much greater than the government claims they are, says a new report highlighting the flaws in the impact assessment (IA) that accompanied Defra's recent consultation on corporate GHG reporting.
According to research commissioned by the Aldersgate Group, the Co-operative Group, Christian Aid and WWF, the IA overestimated the total costs of mandatory carbon reporting for large companies by up to £4,600 million (more than 420%).
The environment department estimates that the total costs over 10 years of mandatory reporting for large companies could be as much as £6,025 million and the total benefits a maximum of £1,355 million. But the report claims the IA did not factor in the benefits that carbon reporting would bring over time, while some of the cost assumptions are questionable.
“Defra’s IA has taken a fairly narrow focus when looking at benefits, rarely taking into account wider social and environmental benefits that arise,” says the report. It highlights the cost assumptions made by Defra, which it claims are inflated.
“By only taking into account the activities that would be required for mandatory carbon reporting and making widely differing day rates more consistent, this reduces associated annual costs for a large company to a range of £2,460 to £7,684 in year zero, compared with £5,820 to £31,120 in the Defra IA.”
Lindsay Harris, the Defra official leading the team looking at GHG reporting, told the recent WSP/the environmentalist roundtable on GHG reporting that the department is “conscious of the limitations” of the IA. “I would accept that our IA probably does under-catch the benefits,” he said.
The Aldersgate Group findings suggest that the mandatory carbon reporting would be good for business.
Paul Monaghan, head of social goals and sustainability at the Co-operative Group, says: “Mandatory reporting would help companies to manage and reduce their emissions and help investors to factor carbon risk into their investment decisions.”
Learn more about IEMA's response to Defra's consultation here
