6 in 10 businesses in the UK are unprepared for new EU-mandated climate disclosures that will come into effect in January 2024, a survey of businesses has found.
These businesses could face potential fines and penalties if they don’t abide by the EU’s Corporate Sustainability Reporting Directive.
The CSRD broadens the scope on which companies are obliged to report on their climate impact. The issues and the calibre of the data that businesses must disclose will be subject to stricter guidelines. Scope 3 emissions, which typically make up the majority of a large business’s climate impact, are a key area of focus.
According to software company 7bridges, which conducted the study, 25% of businesses who already measure their emissions said they were concerned they would not be able to meet the January deadline. The study found that, while 96% have heard of the CSRD.
The study concluded that just 40% of businesses will definitely be ready to comply with the disclosures requirements.
“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’ co-founder and chief executive Philip Ashton.
“Critically, businesses need to not only proactively use the reporting, but also take steps to make reductions and improvements. The penalties are substantial; UK firms are set to be charged up to £40 per tonne of CO2 emissions misreported under the new regulations and consumers can be unforgiving which puts their reputations at risk.”
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