Caroline Pitt of Utilyx outlines what firms can do to improve their place in the Carbon Reduction Commitment rankings
The Environment Agency published the long-awaited CRC Energy Efficiency Scheme performance league table last week, ranking qualifying organisations based on their early action.
Since it was introduced, the league table has been met with mixed reactions by the organisations that the scheme covers. For the more PR conscious, the CRC league table is an official way of showcasing their progress on energy management. However, others argue that the league table provides irrelevant and misleading information. Since revenue recycling has been scrapped, many participants see the league table as an unnecessary distraction to the main aim of the CRC - becoming more energy efficient.
Despite these arguments, and multiple changes to the scheme's rules, over 2,000 organisations, ranging from councils to high street brands, diligently submitted their reports at the end of July and are now reviewing where they rank. What their performance shows may not be immediately obvious given the complexity of the rules and the range of organisations participating.
But one thing's for sure, performance in this first league table draws a line in the sand - do better next year or face considerable public scrutiny. Although we're already half way through the second year, it's not too late to take action to avoid a place at the bottom.
Stay on top of the game
If you're at the top of the table, then your business already has good voluntary Automatic Meter Reading (AMR) coverage and qualifies for a relevant certification. To stay at the top, companies need to make sure that the certification will still be valid on 31 March 2012, when performance for the second league table is measured. The AMR component of the Early Action Metric remains frozen at the first year's score so you can continue to rely on that.
Make sure that the business is using its AMR data to identify and deliver energy savings as effectively as possible; in the second year, the emissions reductions that you make become even more important. In the first year, there was nothing to compare against, but to come at the top next year organisations will need to show a reduction in their absolute and relative emissions.
Set yourself a realistic target. Is there any scope for quick wins? Can capital projects really deliver this year? Looking at your competitors' ranking in the league table, do you think that your efforts will make your business the best in the class or are you aiming for average? Monitoring your emissions on an ongoing basis is an absolute must to avoid any surprises and an unexpected slip down the table.
Move on up
If your organisation is ranked lower down the league table, you first need to establish why this is so that you can explain it to employees, investors and the outside world.
Next, work out how much time and money you're prepared to invest to save energy and reduce your organisation's CRC bills while improving your position. What is it worth doing to avoid the cost of energy, the cost of CRC allowances and achieve reputational benefits?
If you are hoping to make a significant difference for the second league table, you need to scrutinise the business to see where reductions to energy consumption can be made over the coming winter. Are there tactics around good housekeeping that can be exploited quickly? Is it possible to roll out what is being done well in one area to other parts of the business? To make a difference fast, ensure that it's clear who is responsible for driving projects forward and that they are able to get decisions signed off in a timely manner.
Although the AMR score will remain unchanged in the second year, organisations do have a chance to improve their score under the other component of the early action metric. With that in mind, consider whether you can achieve the Carbon Trust Standard or an equivalent certification between now and March 2012. Not only do these schemes give a stamp of approval to your energy management policies, they can give you confidence in the data that you're collecting for the CRC.
Whatever your league table position, avoiding estimates and the associated 10 per cent uplift can be the surest way to reduce reported emissions, so ensure that your supplier is using actual data wherever possible. If you're relying on in-house meter readings, ensure that the evidence and processes that have been put in place would meet a CRC auditor's requirements.
When you're putting the business case for improved league table performance together, remember that saving energy will reduce your bills as well as your CRC costs, so can help save money as well as move you up the league table. Even if time and capital are too tight to roll out energy savings programmes now, if you collate and prioritise good ideas you'll be ready to budget for and act on them for the third year of the CRC.
What have we learned from this year?
Something that stood out in the first year of the CRC is the importance of monitoring for designated changes. Whether you need to report a change to your organisation or not, it's important to engage those in the know like your company secretary regularly, rather than just around annual reporting deadlines.
Another lesson learned was just how many pieces of detailed information need to be put together from across the business for the annual report. From turnover data to renewable generation figures, you can use experience from the first year to work out now what information is needed, who needs to collect it and the deadlines that need to be met, to avoid needless stress and possible mistakes.
Timely reporting is even more important in 2012 as you will need to buy then surrender allowances before the July deadline. You will need to know how much you expect the allowances to cost to get the internal budget approved - the sooner you know your actual footprint, the better. With that in mind, ensure that the internal process for signing off the cost of CRC allowances is clear, particularly given that the deadline for surrender is in July when key people could be on annual leave.
This year's CRC league table has provided a starting point against which organisations' progress will be measured. It's up to individual participants whether they choose to use it as a measure of success themselves and whether they take action to improve or retain their position. Either way, the introduction of a cost of carbon to the CRC in the second year highlights the fact that carbon reductions do not just affect reputation, they also affect the bottom line.
Caroline Pitt is director of carbon services at energy and carbon management firm Utilyx