Posted by

Tom Nolan, Policy Adviser

21 Jun 2012

Representatives from over 190 countries gathered in Rio de Janeiro this week to review progress made since the famous Earth Summit of 1992 and to address new and emerging environmental challenges. The 1992 event also took place in Rio de Janeiro, hence this week’s has been christened Rio+20, and that conference paved the way for the Kyoto Protocol, the world’s first legally binding agreement to reduce greenhouse gas emissions. But it is unlikely this week’s conference will leave a similar legacy.

Over the past 20 years sustainability has become a mainstream issue for many businesses. This is particularly true in Britain and was demonstrated this week by the largely positive business reaction to the announcement on mandatory reporting of greenhouse gas emissions. The requirement will only apply to companies quoted on the London Stock Exchange. Members of the Alternative Investment Market, which allows smaller companies to float on the stock market, have been excluded from the requirement. This ensures that small and medium sized enterprises will not be captured by the new regulations and addresses our major concern since the idea of mandatory reporting was first proposed. The majority of smaller companies would not have the resources to comply with these complex regulations and it is right that this requirement was not placed on them.

But many larger businesses already report on their emissions, their main concern has been the delay in the government making the announcement rather than reporting being made mandatory. The issue has been on the political agenda since the 2008 Climate Change Act and business had been under the impression that announcement would have been made by April this year at the latest. The delay was unfortunate and just created more uncertainty.

Now that the decision has been made the government’s attention must turn to simplifying the overall environmental regulatory regime, and thereby sticking to their commitment to reducing the regulatory burden on business. No business should be required to comply with different regulations that have the same objective. Therefore the likelihood of the Carbon Reduction Commitment (CRC) surviving beyond the autumn should reduce. If the CRC is scrapped business won’t mourn its passing, however the government must take care to ensure anything that takes it place does not unfairly hurt smaller businesses.

The announcement on mandatory reporting has allowed the government to show leadership on the issue at Rio+20. This is important as strong leadership on issues is the one thing that is often missing at international environmental conferences. But with or without an effective agreement at Rio this week one thing is for certain, business will continue along its own path to a low carbon and sustainable future. Although that path would be made a lot smoother if all governments worked together to create the comprehensive, clear and practical global frameworks required.