Businesses underestimate impact of CRC

News Article - 20 April 2010
Category:

A new report suggests businesses significantly underestimated the financial impact of the Carbon Reduction Commitment, which could raise energy bills by up to 6% in 2011. The scheme requires large corporate polluters, around 5000 organisations that include supermarkets and hotels, to submit annual reports on energy usage and buy carbon allowances that cover the company's carbon footprint.

The scheme has been heralded as a turning point in the way companies must view carbon reduction. Yet experts remain divided on the financial impact of the scheme, which places significant stress on infrastructure as businesses make the behavioural change necessary to meet regulations. The new report, released by consultancy firm PricewaterhouseCoopers suggests even the largest companies involved in the CRC did not prepare sufficiently for its demands.

One of the main tenets of the scheme is that submitted carbon data from participants will be compiled into a national league table that identifies the best and worst polluters publically. This has turned carbon reduction from a largely voluntary choice to a necessary financial investment as companies that cannot show the success of carbon reduction schemes may face reputational damage and a hit to the bottom line.

Companies that perform poorly on the league table will also face financial penalties whereas the best performers will receive bonus payments in the form of emissions allowances, in addition to other benefits. This could fuel investment in green projects as companies attempt to gain a competitive edge in the eco-friendly stakes.

But businesses that have little previous experience in eco-friendly investments should not underestimate the infrastructure changes necessary to successfully integrate carbon reduction practices into everyday operations.

The first step to a successful carbon reduction policy is measuring and reporting on carbon emissions. Companies lacking full disclosure on the carbon intensity of their business divisions will be unable to focus carbon reduction efforts for maximum effect. Access carbon reporting software can break down a company's carbon footprint on a departmental or individual level, providing usable and accurate statistics that can form the basis of a focused carbon reduction policy.

Successful policies will help companies gain the competitive edge needed to lead the carbon reduction agenda and qualify for government incentives under the CRC and similar schemes. For more information on how business software can help firms implement carbon reduction policies, please call Access on 0845 345 3300.

Article keywords: Carbon Reduction Commitment, CRC, carbon reporting software, carbon footprint, carbon emissions, accounting for carbon emissions

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