A new Charities SORP information sheet applicable to large charities has been published on carbon reporting. The Information Sheet 5 covers the new requirement for large UK charitable companies to include environmental information in the Trustee's report.
The Information Sheet provides guidance to charities which fall within the Companies (Director's Report) and Limited Liability Partnerships (Energy and Carbon Report) 2018 Regulations. The definition of a large company for the purposes of the Regulations is met if two of the following qualifying conditions have existed for two financial years:
- Gross annual income of more than £36 million;
- Gross (total) assets of more than £18 million;
- More than 250 employees.
The changes brought in by the Regulations now mean that large charitable companies are required to include information regarding their UK energy use, and information regarding any actions the charity has taken in relation to energy efficiency, in their trustees' report.
This means that the charities will need to report on:
- activities for which the charity is responsible involving the combustion of gas or consumption of fuel for the purposes of transport;
- the purchase of electricity by the charity for its own use;
- the quantity of carbon dioxide emitted from the UK energy use as a result of the activities in (a) and (b);
- one 'intensity ratio', which is a measure of environmental impact;
- any information about action taken to improve energy efficiency during the financial year;
- the methodology used in the calculation of disclosures (there is no methodology prescribed by the Regulations, but guidelines recommend that the one adopted is a widely recognised standard); and
- with the exception of reporting in the first year, information relating to energy use and greenhouse gas emissions must be provided for the previous financial year.
The government has issued guidance aimed at helping charities comply with their legal obligations under the regulations. While there are no prescribed reporting formats, the guidelines include templates which it is strongly recommended charities use.
There is an exemption to the reporting requirement if: 1. the charity is a low energy user; 2. disclosure of the relevant information would be seriously prejudicial to the organisation (this exemption is only envisaged for use in exceptional circumstances); or 3. if the information is not practical to obtain.