Paris France. Few countries require companies to calculate and publish their carbon and greenhouse gas emissions balances, but legislation is multiplying, especially for the largest emitters and publicly listed groups.
The legislation is in effect
Currently, only a few commitments refer to emissions directly related to Point 1, i.e. the company’s activities (combustion on site, vehicle fleet, etc.) and Point No. 2: production of the energy it buys. (electricity, heat/cold, etc.)
Point 3, which collects emissions at earlier production stages (purchase of goods and services, transportation, fixed assets and leases, professional travel, investments) and in later stages (waste, use, end-of-life of products, concessions and home-to-work travel) is optional but Recommended.
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These laws provide for the company’s publication of the methodology used and, where applicable, the emissions excluded from the calculation.
Since 2013, Companies Act has required UK listed companies to include the amount of greenhouse gases emitted by Items 1 and 2 in their annual report.
Since April 2019, this obligation also applies to large companies and some other companies that consume more than 40,000 kWh of energy.
The Department of Environment, Food and Rural Affairs (Defra) provides a methodology and database.
In France, companies with more than 500 employees must publish and update their emissions budget and transition plan every four years since 2010.
As of 2019, a fine of up to $10,350 (US$20,700 if repeated) can be applied for non-compliance or non-compliance.
In 2018, the obligation to report carbon emissions affected about 3,200 companies, with a compliance rate of 36%, according to the Environment and Energy Control Agency (Ademe).
In Japan, the commitment – dating back to 2006 – affects companies in certain sectors (energy, transportation), as well as companies with more than 20 employees and exporting more than 3,000 tons of CO2.
It has been extended to the 4,000 largest companies in the spring of 2022, and talks are underway in Hong Kong to implement it in 2025.
At the end of June, MEPs voted in favor of a Directive on Sustainability Information Dissemination (CSRD) that will apply to nearly 50,000 companies in the EU (with more than 250 employees and €40 million in turnover).
As of 2024, they must detail information on greenhouse gas emissions throughout their value chain.
The European Financial Reporting Advisory Group (EFrag) is working to transform this directive into harmonized accounting standards across Europe.
It is in contact with IFRS, which manages global accounting standards, and whose International Accounting Standards Board (ISSB) is preparing the first climate standard by the end of the year. The project is supported by many jurisdictions.
In the United States, publicly traded companies will be required, starting in 2024, to publish greenhouse gas emissions, including Section 3 when the substance is, as well as their exposure to climate risks.
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