Leading companies will be made to report their greenhouse gas emissions from the beginning of the next financial year, the Government has said.
The new rules will apply to London Stock Exchange listed businesses from April 2013 to allow investors to see which companies are managing their pollution effectively, and the scheme could be rolled out to all large companies from 2016.
The Government said the move, announced by the Deputy Prime Minister Nick Clegg at the Rio+20 global environmental summit in Rio de Janeiro, Brazil, was backed by the majority of businesses.
Reporting pollution such as carbon dioxide and methane in annual reports is the first step for businesses to cut the harmful emissions that drive climate change, according to officials who predict the scheme will save four million tonnes of CO2 by 2021.
Mr Clegg said: “Counting your business costs while hiding your greenhouse gas emissions is a false economy. British companies need to reduce their harmful emissions for the benefit of the planet, but many back our plans because being energy efficient makes good business sense too. It saves companies money on energy bills, improves their reputation with customers and helps them manage their long-term costs too.”
Environment Secretary Caroline Spelman, who is also attending the summit in Rio, said: “The discussions we’ve had with businesses show that they want to cut down on their greenhouse gas emissions and they want to be open about it. She added: “Investors are now looking hard at the green credentials of businesses, and the reporting of greenhouse gas emissions will give them vital information as they decide where they invest their money.”