An Analysis of the Effectiveness and Impact of Mandatory Company Greenhouse Gas Emission Reporting Under The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013

Abstract

The intent of this research is to examine the effectiveness and impact of the UK’s mandatory reporting of company greenhouse gas emissions, otherwise known as carbon dioxide equivalent (CO2e) emissions, in accordance to The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, especially regarding the regulations’ influence on quality of a company’s CO2e emission reporting, setting of CO2e emission reduction targets, and the comparability to other companies’ CO2e emission measurement. To examine these questions, an analysis and comparison of fifty companies’ CO2e emissions reporting preceding and succeeding their compliance to The Companies Act regulations is conducted. The research finds The Companies Act regulations likely cause smaller companies to begin CO2e measurement, improve companies’ accuracy of CO2e emission source reporting, and cause the majority of companies to create an emission intensity ratio for their emission reporting. There are also indications The Companies Act regulations encourage companies to improve the format of emissions reporting in their annual reports, which allows for greater transparency and readability to company stakeholders. Finally, the research finds indications The Companies Act regulations encourage companies to either set stronger emission reduction targets or maintain existing targets, while comparability of CO2e emissions between companies does not appear to significantly improve due to The Companies Act regulations. These research results may be important when the UK is considering expansion of The Companies Act’s CO2e emission reporting regulations to additional UK companies; research findings indicate The Companies Act regulations improve companies’ awareness and accountability of their emissions, but just as noteworthy are additional findings which raise opportunities of consideration for improvement before the expansion of the regulations.