Click to Print

Majority of UK companies financially unprepared for EU ETS compliance

Eighty three percent of companies in the UK have made no financial provisions in case of a failure to comply with the European Union’s Emissions Trading Scheme (EUETS), according to a study commissioned by LogicaCMG published on Monday.

“Eight in ten companies have not yet discussed the impact of ETS with either an institutional investor or insurer and 44% haven’t even agreed the issue with their accounts department,” read the study. Indeed, despite the scheme being up and running for nearly six months, UK companies remain unprepared and are heading towards heavy financial penalties if the trend is not reversed. The study estimates the cost for national companies of non-compliance — at the end of the first reporting period in March 2006 — at EUR 1 billion and states that currently 40% of companies to not have a verifier on board to audit their emission liabilities. The paradox lies in the fact that UK companies claim they are aware of the financial implications stemming from non-compliancy; while simultaneously maintaining there is insufficient information regarding the scheme and that more should be done to communicate the necessary requirements.

“This could be a costly lesson to learn. The situation could be reversed, however, if companies take more holistic view of ETS and see the benefits to themselves, their customers and the society. By getting on board now they still have time to get on track,” said Guy Warren, c.e.o. at LogicaCMG. KT

This article was taken, with permission from Heren Energy from ESGM 23rd May 2005.

If you would like to buy a subscription to this daily publication or try it free for two weeks then click here.

Back to MZINE