UK: The Climate Change Bill and company reporting

[Update (28 November): see here]. Yesterday the Climate Change Bill received its third reading in the House of Commons. The Bill now enters the ping-pong stage before receiving Royal Assent. The Bill contains new provisions concerning companies' reporting of their carbon emissions. New Clause 17, titled "Regulations about reporting by companies", provides:

(1) The Secretary of State must, not later than 6th April 2012— (a) make regulations under section 416(4) of the Companies Act 2006 (c. 46) requiring the directors’ report of a company to contain such information as may be specified in the regulations about emissions of greenhouse gases from activities for which the company is responsible, or (b) lay before Parliament a report explaining why no such regulations have been made.

(2) Subsection (1)(a) is complied with if regulations are made containing provision in relation to companies, and emissions, of a description specified in the regulations.

Additionally, new clause 5 provides:

(1) Any company that is required to produce a business review under section 417 of the Companies Act 2006 (c.46) must have regard to any guidance issued under section 80 of this Act when reporting on greenhouse gas emissions.

(2) The Secretary of State may by order provide that any company that is required to produce a business review that includes information on environment matters (including the impact of the company’s business on the environment) under section 417(5) of the Companies Act (c.46) must include information on greenhouse gas emissions, and in doing so have regard to any guidance issued under section 80 of this Act.

(3) The Secretary of State may by order provide that compliance with guidance issued under Section 80 of this Act will be presumed to constitute compliance with section 417 of the Companies Act 2006 (c.46).

(4) The Secretary of State must make provision under either subsection (2) or subsection (3) before 1st April 2010.

(5) The expiry of the period mentioned in subsection (4) does not affect the power of the Secretary of State to make further provision by order under subsections (2) and (3).

(6) The Secretary of State shall, when setting carbon budget pursuant to section 4 of this Act, lay before Parliament a report on any changes to any guidance issued hereunder which the Secretary of State believes are necessary to promote the achievement of any carbon targets.

(7) Any order under this section is subject to affirmative resolution procedure.

According to Government minister Joan Ruddock MP (Hansard: 28/10/08, col 814), these new provisions:

are designed to reinforce our [the Government's] commitment to the importance of corporate transparency and to taking forward the process as quickly as possible. We will consult publicly next year on the detail of how companies’ carbon emissions should be defined and measured. The outcome of that consultation, which will include close work with individual stakeholder groups, will be reflected in the guidance on measurement of emissions that the Government are required to publish by 1 October 2009".

The provisions have been discussed in the Financial Times newspaper - see here.