On 9 November 2018, the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 were published to require additional reporting on emissions, energy consumption and energy efficiency action by quoted companies (that is, companies whose shares have been included in the Official List, or are officially listed in an EEA state, or are admitted to dealing on either the New York Stock Exchange or Nasdaq), large unquoted companies and large LLPs.
As a result, the following additional disclosures will be required in directors' reports:
- Quoted companies will be required to disclose energy use from activities for which the company is responsible and from purchases of electricity, heat, steam or cooling for its own use. They must also describe the principal measures (if any) taken to increase its energy efficiency.
- Large unquoted companies will be required to disclose greenhouse gas emissions (as quoted companies already are), energy use from activities for which the company is responsible and action taken to increase energy efficiency.
Large LLPs will be required to prepare an annual energy and carbon report. If the LLP is a parent LLP and prepares group accounts, the energy and carbon report must be a consolidated (group) report.
There are exemptions from these disclosure requirements if making the statements would be seriously prejudicial to the interests of the company or LLP or if the company or LLP has used a small amount of energy (40,000 kilowatt hours or less) in the relevant financial year.
The regulations will come into force on 1 April 2019 and have effect in respect of financial years beginning on or after 1 April 2019. They can be accessed here.
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