Six in 10 UK businesses are not likely to meet January’s EU deadline for enhanced climate disclosure, a survey reveals.
Companies face a range of penalties, including fines, if they fail to reveal their indirect emissions (Scope 3 emissions). This is according to the requirements of the European Corporate Sustainability Reporting Directive (CSRD), adopted last November. UK firms face penalties of up to £40 per tonne of carbon emissions misreported under the CSRD.
Scope 3 emissions typically account for the bulk of large companies’ climate impacts. It is estimated that the new law will affect more than 50,000 firms in the UK.
Supply chain management specialist 7bridges carried out a survey of 801 firms that are covered by the CSRD due to their size and operations in international markets. It found that only 40% are certain they will be ready to comply by the deadline. Almost all companies polled said they are either hiring a specialist or enlisting an external auditor to help meet the CSRD. One-third are delegating responsibility to a chief sustainability officer and a further third are making it a priority for the chief executive.
“We are now aware that leaders are feeling uneasy about their new responsibility for reporting not only their own emissions but those of partner businesses such as in manufacturing and transport,” said 7bridges chief executive, Philip Ashton. “Critically, businesses need to not only proactively use the reporting, but also take steps to make reductions and improvements.”