Is your large private firm’s energy and carbon reporting both streamlined and compliant?
As trusted providers of company secretarial and registered office services here at London Registrars, we would like to take a moment to draw your business’s attention to the latest energy and carbon reporting requirements for large private companies.
What needs to be disclosed in directors’ reports?
For financial years beginning on or after 1 April 2019, such firms must state in their directors’ report details of their UK energy use, with the minimum requirement being any purchased gas, electricity or transport, including in UK offshore areas.
Also required to be disclosed in the report are any associated greenhouse gas (GHG) emissions, together with the previous year’s figures for energy use and GHG emissions.
Other disclosures that must be made include at least one intensity ratio, any energy efficiency action taken, and the methodology used.
However, exemptions from these disclosures also apply in certain circumstances, including if making such statements would be seriously prejudicial to the company’s interests or it is not practical to obtain the information, as well as if the company has only used a small amount of energy – defined as 40,000 kilowatt hours or less – in the relevant financial year.
An additional exemption is if the company’s disclosures are included in group reports, subject to certain conditions.
How climate change risk can be addressed in your corporate governance disclosures
Another factor that companies should be mindful of for financial years beginning on or after 1 January 2019 is that if they have 2,000 or more employees, or a turnover of more than £200 million globally and a balance sheet total of over £2 billion, they are required to disclose, on a comply or explain basis, their corporate governance arrangements for climate change risks in their directors’ report – provided that they are not already subject to this requirement.
Furthermore, firms that are caught by these new requirements must make the disclosure on a website maintained on their behalf. All qualifying private companies need to comply, including listed company subsidiaries.
One option for your firm is to ‘apply and explain’ the Wates corporate governance principles for large private companies. It is in accordance with these principles that the board is responsible for the company’s overall strategic decision-making approach, in addition to effective risk management, the oversight of risk and how it is managed, as well as accountability to stakeholders.
Boards would be well advised to establish an internal control framework and agree a reporting approach while also developing appropriate risk management systems to identify emerging and established risks confronting the firm and its stakeholders. This would enable the board to make informed and robust decisions in relation to such things as environmental, social and governance matters, including climate change and ethical considerations.
Your company’s board should also be clear about its ‘risk appetite’ and agree on the best ways to manage or mitigate principal risks, as well as the timeframe over which these processes should take place in order to reduce the likelihood or consequences of risks coming to pass.
Any board that is conscientious about doing everything it can to identify both internal and external risk factors should also establish clear internal and external communication channels, alongside the agreement of a monitoring and review process.
Ask London Registrars about good company governance
Whether your organisation’s uppermost priorities as of now are to ensure the highest standards of corporate compliance, to minimise risk or find suitable registered office services, the London Registrars team would be delighted to address your most pressing requirements.
Simply email, call or fax us today, and we’ll be able to discuss with you how our services could be of relevance to your corporate governance and business growth objectives.
14 August 2019