Chamber and committees

I appreciate the offer to work constructively ahead of stage 3. Reading my amendment, I see that it imposes a direct requirement on Government—it says “must”, not “may”. However, the point is that perhaps there needs to be a bit of future-proofing of this legislation, because we cannot predict what the outcome of that pan-UK agreement will be. I am keen to monitor the impact on companies in Scotland that are operating at the EU level when that EU directive goes live, so I am keen to meet to talk a little more about that ahead of stage 3.

I will listen carefully to the case that colleagues make for their amendments but will restrict myself to speaking to amendment 197, which would introduce provisions for scope 3 emissions reporting for large companies. I emphasise that I see it as a probing amendment. I am cognisant of two factors in that regard. There may be more, but I am cognisant of two in particular: first, the potential burdens on business, and, secondly, the UK reporting landscape on emissions.

Company emissions can be classified into scope 1, which is direct emissions from an owned or controlled source; scope 2, which is indirect emissions from the generation of purchased energy; or scope 3, which is all indirect emissions that are not included in scope 2 that occur within the reporting company ’s value chain.

Some of the largest companies that operate in the UK are already required to report their scope 1 and scope 2 emissions under the Government’s streamlined energy and carbon reporting framework. The greenhouse gas protocol is an internationally recognised standard for reporting scope 3 emissions. I point out that the protocol gives detailed guidance on how compliance can be achieved, but it admits that it is a complex area.

From June 2024, large companies operating in the European Union will be required to obtain, monitor and report their scope 3 emissions under the EU corporate sustainability due diligence directive. That was referred to during an earlier grouping of amendments. I note that that EU directive has a proportionality clause, which stresses:

“The burden on companies stemming from compliance costs, has been adapted to the size, resources available, and the risk profile.”

It goes on to talk about commensurate measures, so the feeling is that that is a balanced directive.

Amendment 197 would create a provision in the Circular Economy (Scotland) Bill for mandatory scope 3 emissions reporting for large companies that operate in Scotland. That would be a meaningful step towards businesses beginning to take responsibility for the environmental impacts in their supply chains and would allow Scotland to keep pace with EU policy, as the minister and Mr Ruskell mentioned.

Our stage 1 report stated:

“The Committee believes there are a number of other characteristics desirable in a circular economy and recommends the Scottish Government consider the proposals made by stakeholders to include reference to international impact and environmental impact.”

Amendment 197 is an attempt to address that recommendation.

I acknowledge that, in 2023, the UK Government issued a call for evidence on the benefits, costs and practices of scope 3 emissions reporting. Those findings will be of significant value when drafting future regulations under my amendment if it is approved. The minister also referred to the Economic Activity of Public Bodies (Overseas Matters) Bill, which is going through the UK Parliament, and I acknowledge that there could be crossover with that.

Given all of that, I acknowledge that there could be a pan-UK approach to scope 3 reporting. However, the clear direction of travel is towards proportionate scope 3 reporting that is not unduly burdensome to business. In a few months’ time, businesses that operate in Scotland but also operate within the EU will have to comply with the EU obligations on that anyway. As we progress the matter in a Scottish context, the Circular Economy (Scotland) Bill could be a way to secure such reporting.

I will listen with interest to the minister’s views when she responds to the comments that I have made.

In this small group of amendments, the committee is working constructively with the Government on some of the concerns in our stage 1 report. Transformative state change is needed to move from a linear to a circular economy, and statutory targets will provide a strong focus for action, certainty and direction of travel across policy. The amendments would provide, as the committee recommended, that initial targets under section 6 of the bill should be subject to an enhanced form of parliamentary scrutiny.

The pre-laying or super-affirmative procedure that is outlined in amendment 150 is in line with section 9(8) of the bill on charges for single-use items, providing a consistency of approach and creating the opportunity for greater scrutiny by Parliament. It requires that the Scottish ministers must lay draft regulations before the Scottish Parliament at least 90 days ahead of going through the usual affirmative procedure. During the 90-day period, the Parliament will be able to scrutinise the regulations in the manner that it deems appropriate, and ministers must take account of any representations, resolutions or reports made by the Parliament ahead of laying the final regulations for approval.

I understand that that is consistent with how super-affirmative procedures have been used before. I encourage members to lock in that enhancement to scrutiny.

If members want to reflect on anything else ahead of stage 3, they can of course do that. I take on board the fact that Mr Lumsden is seeking clarity, but that would be best coming from the minister rather than from me. I urge the committee to support amendments 147 and 150.

Looking at the amendment, I am reminded of my time as convener of the Local Government and Communities Committee in a previous session of the Parliament. When Scottish ministers decide what funding is appropriate for local authorities, there is often a significant disparity between that and what COSLA thinks is appropriate. Is the amendment’s underlying intent not just to release funds but to ensure genuine, constructive dialogue between local authorities and Government about the art of the possible and what can be funded? There will be aspirations that cannot be funded, but there will also be direct funding that is required and which can make a meaningful impact. It is all about dialogue.

I am already intervening on Ms Boyack.

Will Ms Boyack give way on that point?

Sarah Boyack name-checked an amendment of mine as being in the current group, which set my alarm bells ringing as I do not have any in this group. Perhaps she is referring to one on scope 3 reporting, which is in a later group. She also mentioned Maurice Golden’s amendment 152 on procurement. Is Ms Boyack aware that the Economy and Fair Work Committee is currently working on an inquiry on public sector procurement, and that there are already many obligations on local authorities on the matter of ethical procurement? We should ensure that whatever additional regulation is brought in by the legislation that is before us is not overly burdensome for local authorities, and that we get that balance right. That is not a reason not to do it, but we have to be aware of it.

My understanding of the child disability payment is that the qualifying period is not a simple three months but three months with an expectation that the condition will endure for a further nine months. Does that cast a bit more doubt on the Scottish Government’s cost assumptions of £21 million?

Those were really helpful comments from both witnesses. Thank you.

That is helpful. Adam Stachura?