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Companies Bill [Lords]

I am sure that my right hon. Friend the Minister will respond to my hon. Friend’s request. The members of the Aldersgate Group, like others in the senior ranks of British industry, realise that that is the direction in which the international economy is going, and that, if we are to be smart, we need to be in there at an early stage, because, unquestionably, there will be a requirement to produce such a review in due course. This is not only a matter of environmental sensitivity but a good business move in relation to the bottom line. The method adopted by the EU emissions trading system under the Kyoto protocol, which is highly relevant to the debate, is the national allocation plan. This requires each industry to reduce its emissions to a fixed lower level within a given time scale. The relevance of that is that the new clauses provide the framework by which those reductions can be achieved in two important ways. I am at one with my hon. Friend the Member for Hemsworth in strongly requesting the Government to reconsider their position on this. First, the national allocation plan, to which we have signed up, applies to all large and medium-sized public and private companies—some 36,000 in all. That is still fewer than 1 per cent. of all companies, but it is significantly more than the 1,300 publicly listed companies covered by the Bill as it is drafted. The Aldersgate Group and the 14 key representatives of the big companies who went to see the Prime Minister are all concerned about the need for a level playing field. They do not want to be disadvantaged, and they therefore expect there to be a general requirement for the whole of business, including large private equity firms and foreign-owned private subsidiaries. The new clauses cover such businesses, but the Bill does not. Secondly, the new clauses would introduce a mandatory reporting standard. I strongly suggest that that is absolutely essential, because we have repeatedly tried to make voluntary codes of practice work. As a former Minister for the Environment, I speak with some anguish about this. We introduced a number of voluntary codes, but they were honoured more in the breach than in the observance. Voluntary codes of practice will never be observed, other than by a relatively small number of scrupulous and conscientious companies. They will certainly not be universally observed. If we want to establish a level playing field, the code of practice must be mandatory and universal. There is also the question of placing burdens on business. We have only to open the papers today to see the CBI repeating its usual mantra. Even the hon. Member for Putney could not resist buzzing around it. Of course there is an initial outlay involved in meeting the proposals. The truth is, however, that having spent that relatively small sum, companies will start to measure their energy efficiency, their transport impacts, their waste generation, their water consumption and their greenhouse gas emissions. They will then find, perhaps to their surprise, that once they have measured the waste and inefficiency that they were inadvertently generating, they will be able to make disproportionately larger savings. That is the key point: they will get a far bigger return for their initial outlay if they are required to assess the environmental impact of their work. Proof of that can be seen in the fact that mandatory social and environmental reporting is already being pursued in various forms in other successful competitor countries to our own, including the United States, Canada, France, the Netherlands, Norway, Sweden and Denmark. I must underline strongly that sustainability is the friend of competitiveness. It is not a burden on it. For all those reasons, I hope that the Government will reconsider their position and accept new clauses 1 and 2. This would result in a win-win situation, not only for the environment—important though that is—but for the bottom line.