The Award Winning Carbon Reduction Programme for SME's


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What does it mean for business?

 

The regulatory and social implications of climate change are having a substantial impact on both global and UK business priorities, with sustainability now regarded alongside profitability in terms of importance for many leading companies.

From a Small and Medium Enterprise' (SME's) point of view, the spiraling price of gas, electricity and fuel may provide the most evident motives for assessing their costs, and hence their carbon footprint. Yet there are a number of social and regulatory forces which are gradually pushing UK business towards a more sustainable approach.

 

Legislation

Amidst the mixture of policy which exists aiming to tackle UK carbon emissions, it is the CRC Energy Efficiency Scheme which is often the most significant. Where policies such as the Feed-In Tariff scheme and the upcoming Green Deal provide financial incentives for those who opt to take them up, the CRC in contrast serves as a mandatory compliance scheme for those who fall under its authority.

Namely, this means large companies with an annual energy consumption of over 6,000MWh, equating to spending approximately £500,000. Those who fall under these criteria must submit to mandatory carbon reporting, with the results being publicly available and included in a league table for environmental performance.

legislation1

Aside from the public exposure regarding each businesses carbon emissions, participating companies will also be obliged to purchase allowances for each tonne of CO2 as of April 2012. This is essentially a tax which will initially cost businesses in the region of £12 per tonne of CO2.

However, whilst this may only apply to large companies at present, it is widely expected by many analysts that it will expanded to include SMEs, potentially within the next few years. With the UKs legally binding commitments towards reducing our carbon emissions, the government's reluctance to regulate the domestic sector and the fact that SMEs count for 45% of UK business expenditure, it would seem to be the next logical step.

 

Green market pressures

Values such as corporate responsibility and transparency have gained growing profile in recent years, as consumers take more interest in the environmental performance of businesses. These ideals have also transferred into the public sector for example, which set minimum environmental credentials for some areas of trading.

A business' environmental credentials are increasingly becoming the difference between competing companies, as it offers a distinction when choosing between two tenders offering similar prices and services. An environmental credential can also often serve as quality assurance and a 'safe bet' when looking to outsource supplies, something which has been recently discussed in Dealer Support (Dec 2011).

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The changing attitudes and values in business can represent a big opportunity to SMEs, rather than a hindrance. There is the opportunity to gain an advantage over competitors in the tendering process by building a clean, responsible brand image. When sustainability certification becomes a legal requirement rather than a voluntary qualification, businesses who acted sooner will also almost certainly have more appeal.

 

Utility & fuel costs

Although not necessarily an issue surrounding climate change, rising energy and fuel costs have certainly brought sustainability to the forefront for SMEs. Improving efficiency and managing energy and fuel costs will not only serve to reduce a business' carbon footprint, but can also substantially lower operating costs.

Yet managing these costs does not require a great deal of investment, as it is estimated that SMEs have the potential to reduce their energy consumption by up to 20% using low cost measures, comparatively more than larger corporations.In light of the previous section on energy, reducing consumption in these areas is more than likely going to incur significant long-term savings for SMEs, as well as short-term.

utility costs

 

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