REGULATIONS 

 

Regulation free for now - but green laws may be getting closer

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Any sustainability law that is applied to SMEs is unlikely to be restrictive in terms of carbon emissions themselves. This is because there is general acceptance that there is far from being a one size fits all sustainability compliance model that can be practically overlaid on more than five million companies of so many different business types. Equally, there is no government organisation to police regulation. What is more likely to happen, is that regulations will be introduced on statutory annual reporting of carbon emissions through which companies have to declare results every year.  

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Annual public reporting on carbon output has serious implications. Currently both consumer and business to business buyers are increasingly insistent on green credentials from those they purchase from, and with the trend gathering momentum, the introduction of publicly available performance records would change progressive sustainability practice from a positive thing to an imperative. 

 

Those found ‘greenwashing’ may well see company value wiped out.   

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For the time being there is a window to prepare for regulations that will inevitably come. SMEs that make the most of that time by understanding more about, and reducing emissions will be able to ease more comfortably into sustainability legislation without the upheaval of having to meet a potentially difficult deadline. In addition, there will be the benefit of money saving and using improved carbon practice to generate commercial wins.    

 

There is current legislation relating to the environment that applies to large companies, and some SMEs in specialist fields.

 

Below are links to find out more:   

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The Listing Rules 

The Companies Act 2006 

The Climate Change Act (CCA) 2008 

The UK Stewardship Code (UKSC) 2020 

The UK Corporate Governance Code (UKCGC) 2018 

The Disclosure Guidance and Transparency Rules (DTRs) 

The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 

The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 

The Limited Liability Partnerships (Climate-related Financial Disclosure) Regulations 2022