The UK has become the first country to make it compulsory for companies to include greenhouse gas emissions data for their entire organisation in their annual reports.
From next April, all businesses listed on the main market of the London Stock Exchange will have to report their emissions.
The move will allow investors to see which companies are effectively managing the long-term costs of greenhouse gas emissions.
Secretary of State for the Environment Caroline Spelman said: “Investors are now looking hard at the green credentials of businesses, and the reporting of greenhouse gas emissions will give them vital information as they decide where to invest their money.”
The Confederation of British Industy welcomed the move. Its director for business environment policy, Rhian Kelly, said: “We have been calling for mandatory carbon reporting for some time. It is an important way to help businesses save money and emissions. Provided this is done in a sensible way, this announcement is to be applauded.”