Carbon Reduction Commitment Regulations

How to Develop a Strategy to Address the Carbon Reduction Commitment (CRC) Regulations

As no organization exists within a vacuum, every action and inaction has repercussions outside of the enterprise environment. This is of particular importance when it comes to the requirements and challenges posed by the Carbon Reduction Commitment, a far-reaching raft of legislation under final review by the UK government.

While market forces come to bear through an entire operation on a daily basis, reputational and public relational matters do not always take front and centre stage. In the case of performance according to CRC benchmarks and guidelines, however, this may not be the case.

It is vitally important that organisations recognise the financial and reputational impacts of the CRC, and not treat it as an administrative burden to be dealt with by the Facilities Management or Social Responsibility departments in isolation. Board level focus and support is required to establish and drive the appropriate strategy and thereby help the organisation “shine” under the public scrutiny of CRC performance

The government has made it clear that it is going to publish a league table, detailing how participating companies fare in regard to their actual emission reduction (absolute metric) as well as changes in their emissions per £ of revenue (growth metric).

As public opinion and pressure is likely to grow and answers be demanded from industry and commerce, the league table is likely to take on great significance for all concerned. This is surely the government's intention as it will spur a company to embrace a long-term strategy of continuous carbon reduction. The companies that fail to comply will not only suffer financially through increased allowance purchasing costs and the potential imposition of penalties, but will also suffer within the court of public opinion.

Forecasting Your Emissions for CRC Regulations Compliance

An organisation can take immediate action to improve its performance in the first year of the scheme by implementing voluntary automated meter reading (AMR) and achieving the Carbon Trust Standard. These Early Action metrics account for 100% of league table positioning in the first year of the scheme and then provide reduced levels of benefit up to the end of the first phase of the scheme after which it falls away.

To ensure ongoing achievement of top quartile league table performance, with its resultant financial and reputation benefits, it is important to achieve an ongoing reduction in energy use and emissions. Forecasting your emissions trajectory, assessing reduction projects and putting a programme of actions in place is essential.

Verisae’s Solutions for CRC Compliance

Part of this strategy development includes consideration of the use of renewables, timing and size of potential outsourcing of activities, disaggregation of the organisation for reporting purposes and even decisions to grow your business onto sites where you are not the counterparty to the energy supply contract. Other important aspects to consider include strategies on allowance purchase and trading, as well as modifications to lease agreements to account for CRC related costs and cash flow implications.

Over and above the financial and reputational impacts of CRC performance, there are of course a range of energy and operational savings that can be achieved by appropriately managing and driving down your energy consumption. These opportunities extend beyond the scope boundary of CRC and include reductions in transport emissions, fugitive emissions, process emissions and benefits achievable by addressing emissions in the extended supply chain.

Verisae has a set of CRC tailored solutions that help organisations achieve CRC compliance as well as achieve the financial and reputational benefits of managing energy consumption and related emissions.

About Verisae

Verisae helps measure, manage and reduce equipment and energy costs including the related business and environmental impacts of carbon emissions. The Sustainability Resource Planning (“SRP”) software platform improves operational efficiency, protects brand integrity and helps ensure regulatory compliance for distributed enterprises across many industries. Verisae delivers a broad range of sustainability solutions to dozens of clients globally with thousands of daily users including an extended network of third-party suppliers. Verisae’s integrated sustainability platform actively tracks millions of assets across thousands of sites worldwide.

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