The CRC Table: What it means, and why it is a marketing issue
The Carbon Reduction Commitment (CRC) is a piece of legislation that will have a profound impact for companies.
Due to start in April 2010, the mandatory energy efficiency scheme will affect organisations that consumed more than 6,000MWh of electricity through half–hourly meters in 2008*.
Of those, 5,000 will have their details published in a league table, which means that the most energy–intensive brands will have nowhere to hide. With the table open for all to see, a bad ranking will impact on a brand’s reputation, and provide a challenge for its marketing department.Those who are highly ranked will receive a bonus payment whilst poor performers will be penalised, meaning carbon output will have a direct impact on a company’s bottom line.
Companies will have to buy carbon allowances to cover their annual emissions. Revenue from the sale of allowances will be recycled back to participants based on their carbon–cutting performance.
By 2020, the CRC is expected to deliver annual reductions of about 4.4 million tonnes – and save participants a collective £1bn a year on their energy bills.
Harry Morrison, general manager of The Carbon Trust, says: ‘It is a critical point. Much of the thought behind the CRC Table is based on the public disclosure and the reputational impact, rather than just the financial impact.
‘I expect the media to pick out all the high profile companies. This will be the first universal test of what companies have been telling us and what the government is ranking their performance as being.’
So, what can companies do now to boost their potential ranking?
The government has identified two ‘early action metrics’ that will affect bonuses and penalties in the table’s first year. The first of these is the installation of voluntary automatic metering, but arguably a more crucial metric is certification against The Carbon Trust Standard.
Morrison urges companies that have not yet achieved the Carbon Trust Standard to consider starting the process immediately by conducting an internal audit of carbon emissions.
More than 100 organisations have now achieved the standard and their improved carbon management has saved a collective £50m a year.There are some relatively easy steps that companies can take to improve their carbon performance, such as encouraging staff to switch off computer screens and introducing recycling initiatives. Staff need to be motivated to get involved, a job that tends to fall under the remit of the marketing department.
Taking these steps now will not only benefit the environment, but with the CRC just around the corner, it could have a dramatic impact on a company’s financial performance.
*This means that a company’s total consumption is recorded every 30 minutes. Information is automatically retrieved from the meter and passed to the energy supplier. The Carbon Trust says these meters provide a good source of information for energy management.
