Making Carbon Count: Setting up a new Carbon Regulator, calls for government to take charge of how carbon emissions are measured and managed across the UK economy.

The report argues that establishing a dedicated Carbon Regulator is key to unlocking innovation and growth by reducing the administrative burden businesses face when reporting on their greenhouse gas emissions. This will improve the credibility of emissions data and help UK businesses remain competitive as they decarbonise their activities.

Summary of recommendations:

• The Accounting, Reporting and Governance Authority (currently the Financial Reporting Council) should be given the remit of economy-wide Carbon Regulator, as opposed to creating a new body. Given the economy-wide coverage of carbon accounting and its increasing relevance to broader reporting and governance requirements, ARGA will be well-placed to adopt these additional responsibilities.
• The Carbon Regulator should initially focus on carbon accounting firms, to ensure they meet appropriate standards for professionalism and accuracy, and to encourage them to use standardised approaches. This can be supported through the development of professional qualifications for carbon accountants, led by industry bodies and overseen by the Carbon Regulator.
• The approach adopted by in-house carbon reporting functions should be proportionate. Where firms are of a size where mandatory sustainability reporting is required, or in cases where businesses make “carbon neutrality” or similar claims, they should be required to ensure that their carbon reporting meets the same standards as are applied to external providers.
• Over time, the Carbon Regulator will need to develop a consistent approach to mapping emissions across the economy. This will involve developing the use of standardised emissions factors where possible and working with businesses to understand how best to ensure accuracy while reducing administrative burdens they face.
• As international efforts to reduce emissions accelerate, the Carbon Regulator should play a key role in developing agreed solutions. In doing so, the Carbon Regulator can safeguard the competitiveness of UK businesses and ensure that they are well-placed to play their part in the race to Net Zero.

The Carbon Accounting programme is funded by Innovate UK and led by High Value Manufacturing Catapult, in collaboration with Connected Places Catapult, Digital Catapult, Satellite Applications Catapult, and Energy Systems Catapult.

The programme makes the case for a policy and regulatory environment that:

• Supports creating a comprehensive UK framework for greenhouse gas (GHG) emissions, with agreed standards and tools for accounting, tracking, and reporting GHG emissions through supply chains to accelerate industrial decarbonisation.
• Unlocks investment and creates an environment where UK industry excels on the global stage as a destination for low carbon manufacturing.