Tag Archives: CRC

Department of Energy & Climate Change announces new consultation on CRC

By David Bicknell

In a press release today, the Department of Energy & Climate Change has announced a consultation on simplifying the Carbon Reduction Commitment (CRC) Energy Efficiency scheme.

DECC says that participants will see their administrative costs cut by almost two-thirds, equating to around £330 million of savings up to 2030.

CRC is a mandatory UK-wide trading  scheme covering large business and public sector organisation, who produce 12% of UK carbon emissions. It requires businesses to report on and pay a tax on energy used, and ranks businesses in a performance league table which provides a further reputational incentive to improve their energy efficiency.

Following Chancellor George Osborne’s criticism of the scheme’s complexity in last week’s Budget, DECC now says businesses will now have the opportunity to comment on Government’s proposals. 

The simplified package proposed is aimed at retaining the energy-saving and reputational benefits of the CRC, whilst reducing the bureaucracy of taking part.

Secretary of State Ed Davey said:

“We have listened to businesses’ concerns about the CRC and have set out proposals to radically cut down on ‘red tape’ to save businesses money. The benefits of the scheme are clear though. It will deliver substantial carbon savings helping us to meet carbon budgets, and it encourages businesses to take action to improve their energy efficiency”.

DECC says the simplified package will include:

  • A shortening of the CRC qualification process.
  • Reducing the number of fuels covered by CRC from 29 to 4.
  • Reducing the amount of reporting required by businesses.
  • Reducing the length of time participants will have to keep records.
  • Removing the requirement on facilities covered by Climate Change Agreement or EU Emissions Trading System installations to purchase CRC allowances. 
  • Adopting new emissions factors for the CRC which will align it with Greenhouse Gas reporting processes.
  • Removing the detailed metrics of the Performance League Table from legislation and placing them in government guidance.

The formal consultation will run for twelve weeks, with the Government planning to amend the legislation for CRC by April 2013.

Consultation on a simplified CRC Energy Efficiency Scheme

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Osborne’s Budget signals possible end of Carbon Reduction Commitment energy scheme

By David Bicknell

George Osborne’s Budget earlier today has raised significant question marks over the future of the Carbon Reduction Commitment (CRC) energy efficiency scheme.

Osborne said this, “Environmentally sustainable has to be fiscally sustainable too. The Carbon Reduction Commitment was established by the previous Government. It is cumbersome, bureaucratic and imposes unnecessary cost on business. So we will seek major savings in the administrative cost of the Commitment for business. If those cannot be found, I will bring forward proposals this autumn to replace the revenues with an alternative environmental tax.”

It will be interesting to know how those ‘major savings’ in the administrative cost might be achieved. That sounds like a softening up for the end of CRC to me.

Related Links

The Guardian: Green ‘stealth tax’ attacked by business groups

Environment Agency publishes Carbon Reduction Commitment league table

By David Bicknell

The Environment Agency has published the initial league table for the Carbon Reduction Commmitment (CRC) Energy Efficiency scheme.

As the Agency puts it, the Performance League Table (PLT) ranks organisations participating in the CRC on how well they manage their energy efficiency. PLT positions are based on a participant’s changes in energy use against a baseline and not their total emissions. As a result the PLT should motivate organisations to improve their energy efficiency.

The 2010/11 PLT recognises those organisations who have already taken action to monitor and reduce their carbon emissions and is based on information supplied by participating organisations.

The Agency’s website is already under pressure from the number of hits on the site, but the table is available as an Excel file here

CRC (Carbon Reduction Commitment) league table now expected in November

By David Bicknell

It seems that the league table associated with the Carbon Reduction Commitment (CRC) energy efficiency scheme is now expected to be published in November.

This blog post on Local Energy suggests that a November date is expected. That could mean the table will be out next week or alternatively,  it may still be a month away.

Local Energy quoted Carl Sweeney the Operations Manager of the CRC Energy Efficiency Scheme at the Environment Agency, saying:

“At this time, we anticipate that the PLT will be published in November. We have agreed with DECC that we will notify participants of the publication date one week before release. There is much ongoing work in the background to review and produce the PLT as accurate as possible, so at this stage I can’t be more specific as something unexpected could delay us.”

Third parties familiar with the situation say that the Environment Agency is getting ‘a lot of calls’ on when the table will be published. 

What does the league table mean? The Carbon Trust, a not-for-profit company that provides specialist support to help business and the public sector cut carbon emissions, puts it like this:

“A publicly available CRC performance league table will show how each participant is performing compared to others in the scheme. If your organisation is a good carbon performer, the league table will help give a significant boost to your organisation’s reputation, demonstrating its success in cutting emissions. Please note, however, that because of the changes announced in October 2010, there is likely to be no direct financial benefit under the CRC from an improved position in the league table.Your organisation’s league table position each year will be determined by performance in three metrics:

  • Early action metric: 50% of your score is based on what percentage of your organisation’s electricity and gas supplies is covered by voluntary automatic meter readings (AMR) in the year to 31 March 2011. The other half is based on the proportion of your CRC emissions certified under the Carbon Trust Standard or an equivalent scheme. Visit www.carbontruststandard.com to find out about achieving the Carbon Trust Standard.
  • Absolute metric: The percentage change in your organisation’s emissions, compared to the average of the previous five years (or number of years available until 2014/15).
  • Growth metric: the percentage change in emissions per unit turnover, compared to the average of the previous five years (or number of years available until 2014/15).

The weighting of these three metrics will change over time. In the first year, early action will count for 100% of your organisation’s league table score. Over the first few years of the scheme, the early action metric will gradually fade in importance until the absolute and growth metrics receive 75% and 25% weightings respectively in 2014/15 and thereafter.

As the Carbon Trust points out, if an organisation is a good carbon performer, the league table will boost its reputation, though there will be no direct financial benefit under the CRC from an improved position in the league table.

However, when the results come out, you can well imagine a few marketing departments either keen to trumpet their organisation’s performance or, conversely, trying to shore up their company’s ‘green’ reputation.

See later story: Environment Agency publishes CRC league table

Why the public sector must stop buying printers

In the first in a series of Campaign4Change guest insights, Tracey Rawling Church, Director of Brand and Reputation at Kyocera Mita UK explains what steps the public sector needs to take to transform its procurement of printers and make its ITTs more cost efficient and low-carbon friendly

To cut its costs and carbon emissions, the public sector should stop buying printers. That may seem a ridiculous statement, coming from an imaging company executive, but actually there’s a serious point here. Most ITTs are written around a notional product – calling for a certain number of machines of a certain specification. And the tender process is quite rigid, so companies invited to tender are forced to propose a solution that fits the criteria in the ITT.

But in many organisations, the number of devices has crept up over time and device to user ratios are unnecessarily high – so replacing machines on a one-for-one basis only perpetuates a system that has become bloated and inefficient.

Sometimes the decision is made to consolidate devices, replacing desktop printers with shared multifunctional devices and an ITT is written on that basis, but to achieve real efficiencies that could reduce costs by typically 30% and carbon by as much as half, a detailed print audit should be undertaken to determine precisely what hardware is needed at which locations to support business processes.

However, even this approach misses the opportunity to obtain a solution that is properly optimised not just at the point of implementation, but into the future.

In the private sector, there is a growing trend towards managed document services, a holistic approach that encompasses every aspect of the printing and imaging needs of an organisation.

A managed document service project begins with a detailed audit of both the machines currently in place and the document flows through and within the organisation. Then a solution is designed that aims to reduce reliance on hard copy by combining document management software with a fleet of machines that have exactly the right functionality to support the document flow.

In most cases, this results in a much smaller number of devices, usually with more extensive functionality than those they replace. A bespoke service contract is crafted that includes remote monitoring of device states, service support to agreed service levels and detailed reporting of device use that can be segmented and analysed in a myriad of ways. And using the business intelligence gained from the reporting suite, the service can be continuously optimised to ensure it remains efficient, accommodating changes in the organisation over time.

For example, the managed document solution provided for insurance giant RSA has reduced paper consumption by 21% in just one year – despite the fact that their product depends on having a printed certificate. And energy consumed by imaging devices has been reduced by 55% with resulting savings in both electricity costs and CRC levies.

As you can imagine, this type of service doesn’t fit easily into a device-centric ITT. So vendors who know they could save cash and carbon through applying a managed document service are forced to respond with a ’round peg, square hole’ solution that is less than ideal, simply because the tender process focuses on products rather than outcomes.

Concerns about carbon emissions and resource scarcity are driving the evolution of innovative business models that overturn conventional norms and challenge the status quo. But unless procurement processes keep pace with these changes, the benefits of this fresh thinking won’t be realised.

To really drive through change, let’s have ITTs written by commercial managers and procurement departments that focus on objectives and targets rather than feeds and speeds. Throw down a challenge to reduce paper consumption by x, cut energy use by y% and drive down costs by z and see what the industry comes up with. I guarantee it will deliver solutions that are more resource efficient, productive and economical.

Events: http://www.kyoceramita.co.uk/index/events.html

MDS in the public sector http://www.kyoceramita.co.uk/index/mds/mds_in_the_public.html
RSA case study
For more information on the full results of the latest independent research into printing attitudes and behaviour,  email Tracey Rawling Church: trc@kyoceramita.co.uk

Why corporate sustainability strategy is now part of the CFO’s role

By David Bicknell

The organisational politics around sustainability are an ongoing issue. So far the need for a  sustainability strategy has touched those responsible for corporate social responsibility (CSR),  marketing (because of the brand and reputation implications of Carbon Reduction Commitment (CRC) league tables) and IT and Facilities who are having to manage and measure energy usage.

Now, an Ernst & Young report recommends, it is the CFO’s turn to pick up the baton.  As this piece suggests, sustainability trends are shifting the role of the CFO in three key areas:

  • Investor relations:  “Shareholders are speaking much louder and much more stridently than they did just a few years ago.  During the 2011 proxy season, 40 percent of shareholder resolutions were related to ESG issues. And over a quarter of ESG-related resolutions gained a 30 percent “Yes” vote, which Ernst & Young describes as a critical threshold (other observers say anywhere from a 10 to 20 percent vote can motivate companies to rethink their policies).  Mutual fund companies are paying more attention to sustainability related issues, and the rating companies (which have received, ahem, a fair bit of scrutiny lately) are directing more focus towards ESG matters as well.  All this leads to a shift in the duties of companies’ investors relations staffs; and CFOs, according to Ernst & Young, will lend more than a few hands with the demands placed on IR departments.
  • External reporting:  More than 3000 multinationals issue sustainability (or CSR or ESG) reports, and many of these companies now provide more than static or trite glossy PDFs.  Companies including UPS, Timberland, and Microsoft are raising the bar in offering frankness while encouraging increased stakeholder engagement.  To that end, more companies are having their sustainability reporting audited by third parties (such as the Carbon Disclosure Project for carbon emissions performance).  And that experience with third party performance falls into the CFO’s lap because they know how to balance the challenges and opportunities that arise from third-party verification.
  • Operational controllership and financial risk management:  Early last year, the Securities and Exchange Commission issued guidelines to companies on how to disclose risks possibly related to climate change.  Carbon data, and more frequently, water data, is becoming financial data because of these resources increasing price.  What was once tangential to the costs of running businesses has and will be central to the financial risks that come when running a company.  Whether evaluating the costs of large capital projects or ascertaining the reliability of sustainability data, CFOs and the departments they head will be careful when ensuring that all this data is accurate.”

Admittedly, currently this is probably a more US-focused development. But then it’s probably only a matter of time before CFOs here have to start considering the sustainability implications of their job, if they are not doing so already.

Here are five immediate actions CFOs can take to enhance corporate value through sustainability:

• Actively pursue a sustainability and reporting program.
• Ensure that those responsible for sustainability matters do not operate in isolation from the rest of the enterprise — especially the finance function.
• Enhance dialogue with shareholders and improve disclosure in key areas, particularly those related to social and environmental issues.
• Ensure that directors’ skills are relevant to the chief areas of stakeholder concern, including risk management tied to social and environmental matters.
• Consider using nontraditional performance metrics, including those related to environmental/sustainability issues.

Ernst & Young report: How Sustainability has Expanded the CFO’s Role

Grasping the CRC Sustainable Innovation Opportunity

By David Bicknell

I’ve just written a piece for the Guardian Professional Network’s Sustainable Business site, which discusses some recent work by Cambium in producing a report on how both suppliers and organisations can benefit from the Government’s CRC Energy Efficiency Scheme.

You can read the article here on the Guardian’s site. And you can find about more about the report from Cambium here.

Cambium report examines public sector attitudes to low carbon and sustainability, while targeting CRC innovation opportunities for suppliers

By David Bicknell

I attended the launch yesterday of a new report targetting the sustainable innovation opportunities offered by the CRC Energy Efficiency Scheme.

The report, by sustainable innovation specialist Cambium, provides a  systematic analysis of the financial and reputational exposure of the 2,770 so called ‘participants’ in the CRC Scheme. This reputational aspect is important with the first performance league tables due out in six months time, in October.

The report, which was launched at Intellect in London with attendance from Intellect, hosting specialist Rackspace and the UK Centre for Economic and Environmental Development (UKCEED) is aimed primarily at suppliers of innovative technologies that can help the organisations affected by this legislation to reduce their likely tax bills, cut energy use and protect their reputations as well as be able to pomote themaselves as responsible businesses.

Cambium believes the report will be of use to trade bodies and CRC Participants, policymakers and public stakeholders, and investors.

The report features an index which examines public and private sector participants for a range of sustainability and energy reduction related indicators and categorises them as leaders, early majority, late majority or laggards within their sector, providing a measure of their likelihood to invest in and adopt energy saving or other innovative technologies, supporting sustainable economic growth. 

The Cambium study identifies and explores the significant differences between the public and privat sector attitudes to a “carbon” and “social awareness” indicator and makes recommendations for better targeting of the market opportunity by suppliers.

There is a release available giving more details here and you can get a copy of the report here