Friday, 11 May 2012

UK Public Wants Corporate Climate Disclosure

First the USA, now the UK.  Yesterday the Aldersgate Group reported the results of a poll showing that over three-quarter of the British public supports mandatory carbon reporting by large companies.

These findings come at an interesting time in the debate about support for climate change action.  As I mentioned in a post a few months ago, renewable energy feed-in tariff (FiT) levels have been slashed in recent months, resulting in a marked drop in new PV system installations across the UK. Now there is  concern that Government support for the Green Deal, an initiative to finance building efficiency retrofits, is wavering.

Companies, meanwhile, are beginning to demand more from their climate change initiatives.  It is not enough anymore to buy a few credits, declare oneself carbon neutral and post a certificate on the wall.  Company directors now want to understand the business case for tackling climate change, and are under increasing pressure to document the financial return from these measures.

The Aldersgate Group/ Populus poll helps provide this ammunition.

While 77% of the general population believes businesses should face mandatory carbon reporting, the figure jumps to 84% for the desirable 18-44 year-old age group.  It is this age group that comprises the target market for most consumer-facing brands.  This age group also encompasses the bulk of the working age population, and the overwhelming majority of civic activists.

In other words, the overwhelming majority of customers, employees and potential protesters expect companies to measure and report their greenhouse gas emissions.  As Carbon Clear reported last summer, most FTSE 100 companies already disclose the basics of their carbon footprint, but the quality and depth of those reports vary widely.  What is more, rates of carbon disclosure and reduction drop off rapidly for companies outside the FTSE 100.

These results are a wake-up call for Britain's corporate sector.  In addition to being customers, employees and protesters, many of the people who responded to the Populus poll are also voters.  It's reasonable, therefore, to expect the debate about corporate climate change reporting to move up the political agenda and perhaps to result in legislation.

Increased climate change reporting is coming. Companies that take action now to understand their carbon footprint and put in place measures to drive carbon reductions will be best suited to thrive in this new world of carbon disclosure.