Climate Change Bill [HL]

I shall be quick, as I have only a couple of minutes before this place closes down. The primary objective of company reporting is to provide information for shareholders and investors. The Government want to encourage full and transparent corporate reporting. For that reason the House agreed the provisions of the Companies Act 2006 on the business review. They require directors of listed companies to include in their reports information on environmental matters, including the impact of the company’s business on the environment. The business reviews of these companies must also include key performance indicators on environmental matters where necessary to understand the business. As the Committee knows, the new provisions came into force only on 1 October last year for financial years beginning on or after that date, and company reports under this new regime will not be published until late 2008 or early 2009. Obviously, we expect many companies to include information about climate change and other environmental issues in their reports. Although I support the intention of the amendment, I would be concerned that introducing provisions to require disclosure of greenhouse gas emissions would pre-empt the outcome of the narrative and reporting provisions of the Companies Act 2006. Information is already available to companies to support them in reporting on environmental issues, including their greenhouse gas emissions. That relates to statutory guidance in Amendment No. 184A. The arguments for and against the introduction of statutory standards were considered by BERR—the DTI, as far as I am concerned—as part of its consultations on the Companies Act. We think that we now have the right balance, as the debates in this House and the other place during the passage of the Companies Bill demonstrated. To help companies in the process, best practice guidance is prepared by the Accounting Standards Board—a body of the Financial Reporting Council—in the form of a reporting statement to support companies with their reporting on environmental impacts. My department has also produced a set of key non-financial performance indicators to assist companies in reporting on environmental matters. Defra is also supporting work by stakeholders to develop an international standard for reporting on climate change issues. We think that publishing UK statutory guidance would pre-empt the outcome of this project; it is a question of timing. We cannot support the mandatory blanket requirements on companies to report on the CO2 emissions or issue statutory guidance, given the timing, the nature of the amendments and the work that is already going on. This is going to happen but not in the way and at the speed suggested by the amendments. I am sorry that I have had to be so brief.