Legislation / regulation

Envt Disclosure under

The Companies Act 2006

Key Requirements 

Quoted UK companies

Quoted companies are required to include disclosures in their annual directors' report;

• the main trends and factors likely to affect the future development, performance and position of the company's business; and information about:
  
• environmental matters (including the impact of the company's business on the environment), the company's employees, and social, community and human rights issues.

SECR

Quoted, large unquoted companies and limited liability partnerships (LLP) need to  meet two of these criteria: -

• Employs > 250 people
• Annual turnover > £36m 

Eligible companies need to report their energy use in kWh and scope 1 and scope 2 GHGs for all energy used within their financial control and include an intensity metric suitable to the business.

Narrative on any efficiency actions taken and how data obtained and calculated including emissions and estimates.



Report needs to include previous year to show comparison

ESOS

Large UK Businesses

Meet either Employees or Financials

• Employs > 250 people
• Annual turnover > £44 million and balance sheet > £38 million.

For third compliance period (31 December 2022)

Requires all eligible companies to audit their energy use in four-yearly cycles. These assessments are audits of the energy used by their buildings, industrial processes and transport to identify cost-effective energy saving measures.

The EU ETS

Qualifying carbon intensive operators

Requires all operators under it to monitor and report their emissions for each year. By the following 30 April, they must surrender allowances to account for their annual emissions. Operators receive a partial free allocation to cover their emissions, and have the flexibility to buy additional allowances or to sell any surplus allowances generated from reducing their emissions below their allocation.

UK ETS or emissions tax

Qualifying energy intensive industries, the power generation sector and aviation.

Covers activities involving combustion of fuels where total rated thermal input exceeds 20MW.

The UK Emissions Trading Scheme (UK ETS) replaced the EU ETS from 1 January 2021. Participants in the EU Emissions Trading System (EU ETS) must still comply with their obligations under that system for the 2020 compliance year.

TM44

Qualifies if a building has  a total comfort cooling output capacity of 12kW across the whole building

Energy Performance of Buildings (E&W) Regulations 2007. Requirement to undertake a 5 year energy efficiency inspection of all A/C systems within a building with a total rated output of 12kW.  Inspection report lodged on the Government Landmark website and must be readily available for audit.  Report provides opportunities to improve efficiency.

EPC (Minimum Level of Energy Efficiency’ Standard)

Rented UK commercial and public buildings

Existing regulations require all privately-rented properties in England and Wales to be at least EPC E by April 2023.

Where leases expire, property has to meet EPC E before it can be re-leased. After April 2023 Landlords are legally bound to bring their properties up to this rating, irrespective of whether occupied.

Intention to introduce the requirement to meet an EPC rating of B or above by 2030 with a potential interim requirement to introduce a C rating by 2027

TCFD Implementation

Premium listed UK companies

The Financial Conduct Authority (FCA) has confirmed that, from 1 January 2021, premium listed companies in the UK will be required to make better disclosures about how climate change affects their business, consistent with the recommendations of TCFD for accounting periods beginning on or after 1 January 2021 (first reports anticipated in spring of 2022).The new Listing Rule requires premium listed companies to report against all four pillars (Governance, Strategy, Risk Management Metrics and Targets) and 11 detailed TCFD Recommendations on a comply or explain basis.

Sustainable Finance Disclosure Regulation (SFDR)

EU Financial Market Participants

The European Union’s Sustainable Finance Disclosure Regulation (SFDR) applies in stages from 10 March 2021 and will impose new transparency obligations and periodic reporting requirements on Financial Market Participants (FMP’s) at both a product and entity level. The new SFDR legislation will require reporting on the following three factors;

• Sustainability risk: Asset managers will be required to assess sustainability risk in a systematic manner, integrating sustainability risks into investment decision making.
• Principal Adverse Impacts (PAI): Asset managers will be required to report on their due diligence policies regarding PAI.
• ESG Approach positioning: Asset managers will be required to report on underlying ESG approach and impact

UK Procurement Policy Note 06/21

All central government departments, their executive agencies and non-departmental public bodies in England.

On 5 June 2021 Cabinet Office published PPN 06/21 ‘Taking account of carbon reduction plans in the procurement of major government contracts’. The PPN requires suppliers who wish to bid for major government contracts worth over £5 million per year to provide a Carbon Reduction Plan (CRP) confirming the supplier’s commitment to achieving net zero by 2050 in the UK. This plan must detail the supplier’s operational emissions and set out the environmental management measures that they have in place which will be in effect during the performance of the contract.

Heat Networks Regulations

Heat suppliers

The purpose of the Heat Network (Metering and Billing) Regulations (‘the Regulations’), which came into force initially in 2014, is to drive energy efficiency and reduce carbon emissions from heating. Under the Regulations, the operators of heat networks must submit notifications for the heat networks they operate. They must, where required, install metering devices on those networks. 

After the initial notification to Office for Product Safety and Standards (OPSS), heat suppliers must submit a re-notification within every four-year period thereafter.

Ecodesign for Energy-Related Products and Energy Information Regulations

Manufacturers of energy-related products

Provide new ecodesign and energy labelling requirements for certain energy-related products that are placed on the market in Great Britain. Including updated ecodesign requirements to increase the minimum energy performance and set material efficiency for electric motors, household appliances and electronic displays. They also introduce such requirements for welding equipment and commercial refrigeration for the first time.

Incentive name

Climate Change Agreements

Support offered and eligibility

EPR, Part 1 A and Energy Intensive Activity as listed under the Trade Sectors Umbrella Agreements

Requires agreement holders to work towards an energy efficiency reduction target and in return receive Climate Change Levy tax relief

Super-deduction

UK registered companies purchasing qualifying plant and equipment

The super deduction tax  means that eligible businesses can get a 130% write-down on taxable profits against qualifying plant and machinery equipment before 31 March 2023

Capital Fund

Industrial Energy Transformation Fund

Timelines

£315m in public funding for decarbonising manufacturing.

2018-2024

Clean Steel Fund

BEIS

£250m in public funding for decarbonising steel production.

2019-2024

Industrial Decarbonisation Challenge

UK Research & Innovation

£170m in public funding for CCS and fuel switching

2018-2024

Transformation Foundation Industries Challenge

UK Research & Innovation

£66m public funding for energy and resource efficiency

2018- 2024

Green Distilleries Fund

BEIS

£10m in funding for fuel switching in distilleries

2020-2023

Public Sector Decarbonisation Scheme

BEIS

£1bn of grant funding for fighting coronavirus, backing business, unleashing innovation and tackling climate change

2020-2022

Policy and stimulus

Environment Bill

Timelines

The government will table an amendment to the Environment Bill that would require major infrastructure projects to provide a net gain in biodiversity and wildlife, the Treasury has announced.

2018-2024

TCFD Implementation

FCA

The UK has announced its intention to make TCFD-aligned disclosures mandatory across the economy by 2025, with a significant proportion of UK registered companies mandatory by 2023.

2021-2025

CCS Contract for Difference (CfD)

BEIS

Support the operational costs of manufacturing and refining CCUS.

2021 (TBC)

Removal of red diesel tax relief for industrial off-road mobile machinery

HM Revenues and Customs

Removal of tax relief will encourage deployment of low carbon off-road mobile machinery.

From April 2022

Green Gas Levy

BEIS

Introduction of a tax to be paid by licensed gas suppliers from April 2022 to support the Green Gas Support Scheme which will most likely be passed on to consumers.  This tax will form the fund to pay the FiT for Green Gas Generators who register under the GGSS, details below.

Licensed gas suppliers who match between 95-100% of a household's gas use to RGGOs will be exempt from the Levy.

Payments begin from April 2022

Green Gas Support Scheme (GGSS)

BEIS

The UK government has now responded to the consultations on the Green Gas Support Scheme (GGSS). The scheme supports biomethane injection through anaerobic digestion with payments directly linked to the volumes of biomethane produced. Several elements of the scheme are based on, or similar to, the current RHI scheme. The GGSS is expected to launch in autumn 2021

Launched November 2021

NABERS UK

Building Research Establishment (BRE)

Currently a voluntary operational energy rating for buildings measuring environmental performance of commercial buildings against the initial build performance. Providing a gap analysis which provides a route to improvement.



In Australia they have already released an energy rating scheme NABERS and linked improved capital value to a stronger rating and the UK is proposing their own framework.

November 2020

Green Claims Code

Competition and Market Authority

On 20th September the Competition and Markets Authority (CMA) has published the Green Claims Code to help businesses understand how to communicate their green credentials while reducing the risk of misleading shoppers. This focuses on 6 principles which are based on existing consumer law. It is clear that firms making green claims “must not omit or hide important information” and “must consider the full life cycle of the product”.

In January 2022, the CMA will begin a review of compliance with consumer law. Should they find evidence of non-compliance they will consider whether further action such as enforcement is necessary.

Jan 2022 (becomes enforceable)