Climate Change Bill [HL]

moved Amendment No. 9: 9: Before Clause 80, insert the following new Clause— ““Guidance on reporting (1) The Secretary of State may issue, or cause to be issued by an authorised body, guidance regarding the information concerning a company’s greenhouse gas emissions which should be publicly disclosed by such a company as part of its annual reporting. (2) The guidance may relate to the appropriate content and form of such disclosures or any matter necessary to promote the provision of transparent and comparable data regarding the greenhouse gas emissions of companies. (3) The guidance issued under this section may distinguish between different categories of company according to criteria to be determined by the Secretary of State, such as turnover or market share or number of employees or any other criteria he or she deems relevant, and may contain different standards for each category of company in respect of the content and form of the disclosures or other matters referred to in subsection (2) above. (4) Any company which is required to produce a business review under the Companies Act 2006 (c. 46) must report on greenhouse gas emissions having regard to any guidance given under this section, and the Secretary of State may provide that compliance with any such guidance will be presumed to constitute compliance with section 417 of that Act (contents of directors’ report: business review) in respect of reporting on such emissions. (5) The power to give guidance under this section includes the power to vary or revoke it.”” The noble Baroness said: My Lords, I am grateful to the House for allowing this issue to be raised again. The substance of the amendment was put both in Committee and on Report, and I fully realise that the, "““practice of the House is normally to resolve major points of difference by the end of report stage””." However, this had not happened because of the timing of the amendments at both stages. Amendments on this area were put close to 11 pm on the last day in Committee, and close to 10 pm of the last day on Report. The noble Lord, Lord Rooker, noted on Report that discussion in Committee had been ““incredibly truncated””. Discussion on Report was somewhat more substantial but, again, truncated by the late hour. This was certainly not something on which the opinion of the House could possibly be tested at that hour with the pressure of time. I am grateful to the Minister and the House for allowing this issue to be properly examined now and I am grateful for the support of the noble Lords, Lord Dubs and Lord Whitty, and the right reverend Prelate the Bishop of Liverpool, even if several of them cannot be here; the annunciator being stuck on Amendment No. 6 is probably not helping. The more I look at this issue, the more I see it as a litmus test of the Government’s seriousness. They are to be congratulated on bringing forward the Bill; now it must make a difference. In some ways, the amendment, limited though it is, reflects debate on many of the keys areas of the Bill. I shall explain what it is about, and why I think as I do. A couple of years ago, we passed the Companies Act, bringing company law from the 19th and 20th centuries into the 21st. As it passed through this House, we insisted that, at the very least, quoted companies over a certain size should have a duty to report on various things, one of which needed to be their impact on the environment. Clause 417 of the Companies Act 2006 requires directors of quoted companies to include information on the impact of the company's business on the environment in their business review. A company director must also, "““have regard ... to … the impact of the company's operations on ... the environment””." Amendment No. 9 states that those companies which are required to report on their environmental impact should include in that report information on their greenhouse gas emissions. Simple and non-controversial enough, you would have thought, and something which might be considered to be implicit in any environmental impact report. But we know it is not. Many companies do, or plan to do, this, but others do not. We seek to bring them up to the same standard. For companies which do not have this responsibility, we have a provision for the Secretary of State to guide on it. That is what this amendment is about. It is about being specific about something which is already supposed to be happening. So why do I think this is a litmus test? I am spokesperson for the Liberal Democrats not on the environment but on international development. I bring forward the amendment because I recognise the impact that climate change will have, first and foremost, on developing countries. The Bill is being overseen by Defra, and led for us by our environment team. A cross-team, cross-party approach is surely what this issue requires. The Minister could not have been more refreshing, as we have heard, in his approach to the Bill. His heart is clearly in it. But remember those discussions earlier in the Bill about whether it should really be the Prime Minister who oversees this, because it must be implemented across government and across all departments? Of course, the Companies Act belongs to the new DBERR department, or what the noble Lord, Lord Rooker, prefers to call the DTI. That is why the Government's reaction to our amendment is a litmus test. Will what Defra says must be done be seen through by DBERR? What does DBERR make of this Bill? Or is the problem the Treasury, given the problems of OFR and the business review of the Companies Bill? I have looked very hard at what Defra and DBERR say on this area and what the Minister said last time. There is more than a cigarette paper that could be slid in here, and that is what worries me. If, at this incredibly early stage, DBERR is apparently unwilling to countenance a spelling out of what in all honesty—and straightforwardly—ought to be included by quoted companies when they report on their impact on the environment, what possible hope have we for taking forward even more difficult decisions? The amendment does not force change on companies, though of course we hope that transparency, openness and simply working things through would indeed have that effect. It simply asks for a report. I shall remind your Lordships. The Minister said that, "““these are incredibly important issues … the Government are very keen to promote transparency of carbon reporting by companies””.—[Official Report, 18/3/08; col. 245.]" He told us that he had his own Private Member's Bill in another place at another time which actually promoted company reporting of this kind. He did not prevail under the then Tory Government. He is a ““goodie””, he says, and I think we would all agree. So it seems that he accepts the case, and has long done so. I note from Defra's website that, in January 2006, it issued a set of environmental reporting guidelines, "““to help companies to identify and address their most significant environmental impacts””." Defra argues: "““Companies that measure, manage and communicate their environmental performance are inherently well placed. They understand how to:""improve their processes, reduce their costs, comply with regulatory requirements and stakeholder expectations, and take advantages of new market opportunities.""Failure to plan for a future in which environmental factors are likely to be increasingly significant may risk the long-term future of a business.""Good environmental performance makes good business sense. Environmental risks and uncertainties impact to some extent on all companies, and affect investment decisions, consumer behavior and Government policy””." It goes on to note responsibilities under the Companies Act. All of that would seem to indicate that the Minister should long since have agreed to this amendment. So what has happened? Well, this is where the litmus test comes in, and whether, indeed, the Prime Minister should have overall control here. I turn to the DBERR website. Issued in July 2007, there is a paper entitled Duties of Company Directors. Margaret Hodge, the Minister, says in the introduction: "““Pursuing the interests of shareholders and embracing wider responsibilities are complementary purposes, not contradictory ones.""I strongly believe that businesses perform better, and are more sustainable in the long term, when they have regard to a wider group of issues in pursuing success””." In this she includes, "““their impact on communities and the environment. They do so at least partly because it makes good business sense””." So far so good. But is there anything at all in the body of this paper on directors' duties about the environment? Not a thing. So I undertook a pretty thorough search, as if I were a company director—which, of course, it would be nice to be—of DBERR's website to find out all my responsibilities. There is all sorts of information and all sorts of helpful distillations of the new law. Is there anything on my responsibilities to the environment? Hunt as might, I could not find it. It may well be there, but if so it is pretty effectively buried. That makes me think that DBERR seems not to be engaged in this Bill or if it is, it is saying ““Hands Off””. ““Delay””. ““Don’t do this now””. ““Wait until X or Y””. I notice the Minister nodding. I should like him to tell me, hand on heart, that it is otherwise. I certainly hope he can, but I can think of no reason, other than that, for why the Government have not simply welcomed this amendment and said, ““Yes, this fleshes out what we intended. We can say that in the next round of reporting, the relevant companies ought to include their carbon emissions, and most of them will have done that anyway””. Last time, the Minister said that many companies are already doing this, and that is indeed the case. However, we know that it is patchy and not comparable. We need to level the playing field. We need to bring the tardier companies up to the level of the leaders. We have realised, not least via the Stern review, that action needs to be more urgent and sustained than we realised even as the Companies Act was passed. To delay for assessment, as the Government seem to suggest, for two, four or six years simply does not reflect the urgency of this problem. I am sure that Defra is only too well aware of that and I hope that, at the eleventh hour, the Minister will allow this change to the Bill. He and his colleagues at the other end of the building might already be becoming aware that there is a campaign building on this. Would it not be easier to be able to reply to all the postcards saying that they have listened, they agree anyway and this significant marker, this litmus test of how the UK will take this forward, has already been agreed to? I beg to move.