CARROTS AND STICKS – PROMOTING ... - Global Reporting Initiative

Country/Region Standards, Codes and Guidelines
United Kingdom Mandatory standards
The British Companies Act, 2006
� requires
all UK listed companies to provide a narrative
within their annual report on the company’s
strategies, performance and risks (“Business
Review”). Companies listed on the London Stock
Exchange should disclose in their annual review
information on environmental, workplace, social
and community matters. This is a requirement
of the EU Modernisation Directive. The Business
Review requirement was initiated instead of a
mandatory Operating and Financial Review (OFR),
which remains a voluntary standard. The result of a
lengthy public debate over the last three years, the
OFR text requires directors to consider factors such
as environment and community issues (factors and
trends) insofar as these are relevant for understanding
not only the past but also future performance of the
business.
As part of the UK listing requirements, the
� Combined
Code, 2003 requires businesses to report on
governance and internal control. The Turnbull
guidance provided further details on the requirements
for reporting on internal control. This was updated
in 2006 by the Flint Review. The Financial Reporting
Council recently undertook a review (July 09) of the
Combined Code and no changes were recommended.
The
� Climate Change Act, 2008 was introduced to
ensure that the UK accounts for all six Kyoto gases.
It mandates the UK government to issue reporting
guidance by October 2009. Additionally, by 6 April
2012 the government is required to exercise powers
under the Companies Act to require the inclusion of
GHG reporting in a company’s Directors’ Report. This
is a significant change and any company reporting
such information should follow the developments of
this legislation. http://www.defra.gov.uk/environment/
climatechange/uk/legislation/
The
� Carbon Reduction Commitment (CRC), 2010
requires companies to measure and report on all their
emissions related to energy use to the Environment
Agency, and purchase allowances. Organisations
that use more than 6,000MWh per annum (equating
approximately to an annual electricity bill of
£1,000,000) will be captured under the scheme. By
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