On 19 October 2023, the Department for Energy Security and Net Zero (DESNZ) published a consultation which aims to collect views on the reviews of the greenhouse gas reporting policy, which could potentially include scope 3 emissions.
The Greenhouse Gas Protocol classifies organisation's greenhouse gas emissions into three scopes:
Currently, some of the largest companies in the UK are required to disclose their Scope 1 and 2 emissions in their annual reports under the Streamlined Energy and Carbon Reporting (SECR) framework, as implemented by the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations SI 2018/1155. However, currently, the reporting of Scope 3 emissions remains largely voluntary.
Now, the government is seeking views about the costs, benefits and practicalities of Scope 3 emissions reporting, which in most cases accounts for approximately 80-95% of total emissions for large organisations. Therefore, reducing Scope 3 emissions could significantly contribute to the UK reaching a net-zero greenhouse gas emissions target by 2050. Additionally, disclosures of Scope 3 emissions by organisations are becoming increasingly important to stakeholders and investors who value the organisation's readiness to adapt to a low-carbon economy.
In 2024, the government will be carrying out a post-implementation review of the SECR framework and the views gathered in this consultation will help to achieve the aims of the framework and ensure it is beneficial and fit for purpose.
For more information on this subject, see:
