Are UK firms unprepared for GHG reporting?

Compliance experts in the British corporate world have been urged to step up their game after a study revealed that the majority of businesses are not ready for upcoming greenhouse gas (GHG) regulations making environmental reporting mandatory.

The paper, from Verco and the Institute of Chartered Accountants in England and Wales (ICAEW), revealed that less than 20 per cent of FTSE 500 companies have plans in place for managing the governance and data control issues these new rules are likely to bring to the forefront.

Furthermore, fewer than 25 per cent of respondents have any kind of specialised accounting software for developing the information required by GHG regulations, reports Accountancy Age.

Robert Bartosik, financial analyst at Verco, stressed that moving swiftly towards strong compliance standards will ensure that businesses minimise their risk and avoid facing any governmental sanctions.

"Once compliance is achieved companies should consider using GHG emissions data as a potentially valuable management information," he added.

Some 25 per cent of companies surveyed have third party assurance of the data they have gathered, while 55 per cent are likely to use a third party business to collate the information needed to meet with the government's new regulations.

Earlier this year, the government announced that all companies which are listed on the London Stock Exchange will need to report the GHG emissions as part of their annual reporting requirement, underlining its commitment to cutting down on carbon pollution across the British business world.

The requirement, which was made law earlier this year, could lead to businesses facing sanctions such as fines from the recalibrated Financial Conduct Authority if they fail to include the details in their annual report.

With the increasing international focus on global warming and reducing carbon emissions, canny businesses can also set themselves apart from their competitors and earn some good press by taking pro-active steps to highlight their green credentials.

This could mean financial services professionals need to learn some new skills in order to get top compliance and accountancy roles in the UK.