Call for evidence launched on Scope 3 emission disclosures

The Department of Energy Security and Net Zero has launched a call for evidence on Scope 3 greenhouse gas (GHG) emission reporting. This follows the commitment made by the government in its March 2023 Green Finance Strategy to review reporting in relation to these emissions.

GHG reporting typically divides a company’s emissions into three scopes, with Scope 3 emissions being indirect emissions that occur in a reporting company’s value chain. Disclosure of most Scope 3 emissions remains voluntary under current UK reporting requirements (although as Scope 3 disclosures are contained in the Recommended Disclosures of the Task Force on Climate-related Financial Disclosures, under the Listing Rules listed companies are required to include disclosures consistent with this TCFD requirement in their annual report, on a comply or explain basis – see our briefing for more details on the TCFD disclosure regime for listed companies).

The call for evidence seeks to understand the costs, benefits and practical issues in making Scope 3 disclosures. Feedback received will help inform the government’s approach to the endorsement of the International Sustainability Standard Board’s first two sustainability reporting standards, which require Scope 1, 2 and 3 disclosures to be made (see here for more details on these sustainability reporting standards, ISSB S1 and S2). Evidence submitted will also inform the government’s post-implementation review of the current UK Streamlined Energy and Carbon Reporting framework, which is set out in the Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008.

The call for evidence closes on 14 December 2023. For more information, see our ESG blog post here.