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November 26, 2009

UK firms off-target to hit carbon laws deadline

Only one third of companies fully prepared for April legislation

By Vinod

UK businesses are ill-prepared to meet the April deadline for the Government’s Carbon Reduction Commitment (CRC) legislation.

Research by SAP found only a third of firms were fully prepared for CRC, while one in five firms had either not started planning or had no idea what they needed to do.

The Government has identified 5,000 to 20,000 large private and public sector UK firms who must comply with the legislation, based on their half hourly electricity usage measured in 2008. Companies that exceed a government-set amount of usage will pay a fee, while those who come in below the bar will be credited.

Potentially more damaging for companies than financial penalties is that their performance will be laid bare for all to see in a league table in 2011.

“There will be a monetary penalty, but big retailers and financial companies will be motivated by reputational risk, as there will be a league table of the good, the bad and the ugly,” said Simon Godfrey, sustainability champion at SAP.

The survey found that CRC compliance would influence financial firms’ investment decisions: 44% would decline investment to poor performing firms.

More than three-quarters of respondents recognised that this was an opportunity to improve their carbon footprint, but less than half had the right IT applications in place to collect and analyse data about their cabron emissions. Too many were relying on spreadsheets to do the job.

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It’s not too late to meet the April deadline, but companies need to plan their attack now, warned Godfrey. This involved both finding a C-level boardroom champion to take ownership of the project and putting in place an effective carbon management application.

“The challenge is to do the right thing, but don’t delay. First you need to conduct an audit of what you were doing in 2008. Most organisations are just using Excel to monitor use but Excel is not sufficient to drive organisational change,” said Godfrey.

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