George Hudson, UK Business Development Manager for GoNetZero, explains why accurate emissions reporting is now essential for compliance and credibility.
Accurate emissions reporting is not just about compliance anymore – it is fast becoming a baseline expectation for doing business.
The chemical sector faces a tough path to net zero due to carbon-intensive feedstock, high-heat processes and complex global supply chains. It is no surprise the sector accounts for roughly 5% of global greenhouse gas emissions.
Nevertheless, the chemical industry also has to meet expectations to measure and report on their climate impact.
Tighter UK regulations
The Streamlined Energy and Carbon Reporting framework already requires large UK businesses to disclose energy consumption and greenhouse gas emissions in their annual reports, establishing a baseline of reporting requirements.
The UK government closed its consultation on the Sustainability Reporting Standards (SRS) in September 2025. The final standards are expected to be published soon. All businesses, including those within the chemical industry, should begin preparing accordingly.
These efforts align with global frameworks, notably those established by the International Sustainability Standards Board.
Harmonisation across jurisdictions is advancing rapidly, indicating that reporting obligations will become increasingly standardised.
Implications of the EU Corporate Sustainability Directive
Meanwhile, there is an additional compliance issue on the horizon for businesses operating within the European Union (EU). Member states have a deadline to transpose the Corporate Sustainability Due Diligence Directive (CSDDD) into national law.
This was formally adopted by the EU in July 2024 and must be adapted by member states before 26 July 2027. Businesses have to thoroughly consider how their operations affect the environment and take steps to remedy adverse effects.
On paper, the CSDDD is expected to be applied in phases, and all businesses must comply by 26 July 2029. But in practice, the impact will be more complicated than that.
The CSDDD requires businesses to look at their “chain of activities” – in other words, their supply chain or value chain. Many chemical firms will fall into the category of “upstream business partners” to large EU-based companies because they handle the extraction, sourcing or transportation of raw materials for those businesses. So even if a business is too small to be included in the initial implementation phase of the CSDDD, the organisations you work with could start requiring detailed climate information from you as part of their due diligence.
The “why” behind reporting rules
The directive is clear: governments and international bodies are increasingly pushing for businesses to have clarity on their greenhouse gas emissions and report them as accurately as possible. This will provide clarity on a company’s strategy and mitigation plans toward environmental, financial and systemic risk.
Today’s reporting standards are shaped by the Taskforce on Climate-Related Financial Disclosures (TCFD), established by the Financial Stability Board in 2015. The Board itself was formed in the wake of the 2007-2008 financial crisis – a period marked by limited visibility into key financial risks.
One of the key lessons from that era was the danger of mispriced risks when investors lack access to consistent, reliable information. Climate-related risks are now being treated in a similar light, with growing recognition that transparency and robust disclosure are essential to safeguarding financial stability.
The purpose of the SRS and other reporting standards is to provide clarity – not only about how a business impacts the environment, but also how environmental factors could materially affect its operations, supply chain and long-term value. A company that cannot account for either is, in effect, a “black box” – a source of uncertainty for investors, customers, and regulators seeking to understand and manage climate-related risks.
For many businesses, measuring emissions accurately is not only a step towards compliance, but also a means of gaining deeper insight into operations, managing exposure to environmental risks, and identifying opportunities for improvement.
Practical guidance for chemical firms
While there is no single pathway to net zero, chemical businesses can take concrete steps today to strengthen their position and prepare for upcoming regulatory developments:
Consolidate data: Build a single, auditable dataset for energy and emissions across all sites.
Engage suppliers: Begin gathering upstream data in preparation for Scope 3 reporting requirements.
Align with standards: Ensure reporting frameworks are compatible with the UK’s SRS ahead of its introduction.
The importance of disclosing climate impact is extending across value chains, driven by regulatory expectations and evolving procurement criteria. Businesses that can provide a transparent and comprehensive account of their emissions are increasingly viewed as lower-risk partners – and are likely to gain a competitive edge.
While full decarbonisation is a long-term objective, the ability to measure and report emissions accurately is rapidly becoming a necessity.
Companies that act early will not only be better positioned to meet future regulatory requirements, but will also enhance their standing with stakeholders, strengthen supply chain resilience, and build credibility.
