Calls for global standard on carbon reporting increase

News Article - 15 December 2009
Category: Environment

Top accounting institutes are stepping up pressure on governments to develop a global standard for climate change related disclosure. Many of the World's biggest institutes - including the ICAEW and the Carbon Disclosures Standards Board - have signed an open letter to the Copenhagen Summit attendees asking them to produce a single carbon reporting model.

The impetus behind the move has been increasing recently as governments make optimistic pledges to cut carbon emissions in the coming decades. Many pressure groups believe the UK Government's target of an 80% reduction in carbon emissions by 2050 will be untenable unless global standards on carbon disclosure are agreed.

Companies also argue a global reporting standard will allow upcoming compliance regulations to be more easily fulfilled. In April 2010, companies based in the UK will be affected by the compulsory Carbon Reduction Commitment, where the most energy-intensive producers will be required to cut carbon emissions by around 1.2 million tonnes a year. Comparison and communication problems between industries, due to a lack of carbon reporting standards, are likely to make this difficult.

Experts suggest a global carbon reporting model will improve these communication shortfalls, and solve many of the problems that are seen to slow the development of a low carbon economy. One of the biggest issues is the lack of boardroom confidence in financial disclosure related to climate change. A global reporting model is expected to ease this discomfort, and increase the ability of stakeholders to make the behavioural changes necessary to reduce company carbon emissions.

As the calls for a global reporting standard grow, businesses may find themselves under increasing pressure to show a commitment to a low carbon economy. Compliance regulations are expected to toughen as carbon-reduction targets gain visibility, and finance directors may bear the burden as boardrooms demand solid financial disclosure regarding the most carbon-intensive areas of the business.

Implementing company-wide carbon reporting functionality is one of the best ways companies can prepare for increased compliance regulations and a global carbon reporting model. Access carbon reporting software seamlessly integrates with current business models, and gives carbon-reporting functionality across all departments.

Given the support of many of the World's most respected accounting institutes, the introduction of a global carbon reporting model has grown more likely. As carbon-reduction targets become more aggressive, companies preparing early will find adapting to new standards and compliance regulations far easier.

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