Fines and costs
How much | Country | Details |
£40k for non-compliance | UK - SECR | In 2018, the Department for Business, Energy and Industrial Strategy (BEIS) estimated that it would be mandatory for around 11,900 businesses in the UK to report on SECR. Source: https://www.advantageutilities.com/news/secr-faq A proposed UK law that would levy fines of up to 10% of global turnover for greenwashing provides an example of what severe ESG fines can look like. |
€10 and €50 per tonne of unreported embedded emissions | EU - CBAM | The application of the EU's Carbon Border Adjustment Mechanism ("CBAM") is fast approaching for importers and manufacturers of products in the cement, fertiliser, iron, steel, aluminium, hydrogen and electricity producing industries. https://www.whitecase.com/insight-alert/four-things-know-when-preparing-eu-carbon-border-adjustment-mechanism-reporting https://www.ft.com/content/9f9e4cdd-a9f5-4d81-b722-82cc3f74e214 |
compliance costs $640,000 | US - SEC | In the official climate rule proposal, the SEC estimates that compliance costs during the first year will be $640,000 (and $530,00 in subsequent years) for large enterprises and $490,000 (and $420,000 in subsequent years) for smaller reporting companies. Additionally, a separate survey from the SustainAbility Institute by ERM found that private sector organizations currently spend $677,000 per year measuring and managing climate-related disclosures. If a company’s carbon reporting is found to be inaccurate, it’s likely that activities and associated costs will have to be repeated across several key categories (average figures taken from the aforementioned survey):
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$1.5 - 9.5 million | US - SEC |
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£27 million | UK - CRC… | The fines published today cover the 2020-21 financial year, with more than £27 million of fines issued to 33 companies for breaches of the European Union Emissions Trading System, CRC Energy Efficiency Scheme, Energy Savings Opportunity Scheme and Fluorinated Greenhouse Gas regime. https://www.gov.uk/government/news/more-than-30-companies-fined-as-part-of-efforts-to-reduce-emissions |
€10M or 5 % of the total annual turnover | EU - CSDR | Can companies get sanctioned if they are not complying? It is unknown exactly when the EU Commission will sanction businesses failing to comply with the CSRD. According to the Commissions' requirements within the Directive, the sanctions can be expected to be significant. The nature of the sanctions and the fines' amount will depend on the different Member States. For example, if German businesses don't report compliance to the German version of the Non-Financial Reporting Directive (the Directive being amended with the CSRD) they face fines up to the amount which is the highest of the following: €10M or 5 % of the total annual turnover of the company or twice the amount of the profits gained or losses avoided because of the breach. https://plana.earth/academy/csrd-corporate-sustainability-reporting-directive |
$500,000 | US - NY | What are the potential penalties associated with Local Law 97? Starting in 2025, the penalties are as follows:
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Greenwashing | global |
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