Hot on the heels of the Climate Change Act 2008, which came into force in November of last year, comes the announcement of the Carbon Reduction Commitment (CRC), planned to start in April 2010 and described as “a UK-wide scheme to encourage organisations to reduce their carbon emissions”.

The CRC envisages only affecting large public and private sector organisations, typically spending £1 million per year or more on electricity, but it seems to me that you ought to be making someone in your organisation aware that the consultation, “asking for feedback” commences in February.

If it applies to you, you’d better have reserves set aside in order to be able to continue with business-as-usual; in addition to having to meet requirements for carbon reduction, you’ll also have to trade carbon allowances. Is it just me, or has the word ‘green’ suddenly become synonymous with ‘greenback’? I’m all in favour of ‘green’ being run on a businesslike footing and we all have a right to make a living doing what we do; I myself do exactly that and there is no shame in it, since the value that my organisation brings to clients can be measured not only in carbon usage/burn reduction but also in pounds, shillings and pence savings, so there is a business case for changes in working practices. All these new guidelines and statutes, however, seem to look way too much like stealth taxes.

So is there a business case for taking action before you have to do something, reactively, in response to new legislation (and don’t, for a moment, think the CRC will not, at some stage, become embedded in statute)?

Well, we need to burn less energy, so let’s start there. Firstly, are you in contract and on the best available tariff (there are, after all, dozens to choose from)? Are you burning green or brown fuel – brown may be cheaper, but the tax breaks for green might actually make green more cost-efficient. Got that sorted? Great, since the savings may be useful to set aside for the buying/trading of carbon allowances (let’s face it, no matter what you do to reduce your energy use, you may still not reach the govt. target, so plan ahead) – some of our clients are achieving savings of up to 30% by doing just this, so don’t dismiss this as a strategy for cost reduction prior to embarking on carbon reduction.

Next, can you measure where you are using the energy? Where are the peaks? Are there areas where energy usage appears disproportionate in comparison with other areas, offices, divisions? Where’s the leakage? Are we using motor and system controls in every area possible to reduce the level of wasted energy in the organisation? Where are the leaks? Working with experts in this area, we have seen companies significantly reduce their carbon emissions by analysing all of these areas. Is there an investment requirement? Yes, and since it is relatively small anyway, the ROI is measured in months, not in years and if you have pre- and post implementation reporting in place (all covered by these experts), you have evidence of emission reduction. Not only do you limit your liability for future stealth taxes (my words!), but you also create a leaner, meaner and greener business.

As ever, the sooner we bring the word ‘environment’ into the financial planning and strategy process as an everyday term, the sooner we build sustainability (in every sense of the word) into the organisation.

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