Those that take proactive approach to CRC will profit

Business consultants Hurleypalmerflatt have looked at the costs and benefits of the Carbon Reduction Commitment - and argue that going for best practice is going to be more profitable than basic compliance.

The company's analysis suggests that those taking the best practice route could gain net revenue equivalent to 13% of their energy costs while those taking the minimum action necessary could suffer additional costs of up to 28% of their bill.

The findings come in analysis by international multidisciplinary consultancy hurleypalmerflatt of its clients from the past two years, in the run up to the start of the CRC in April 2010.

It found that an organisation with an annual energy spend of £1 million per annum would be likely to see a net cost to the business of £280,000 by 2017 if only introducing measures to comply with the CRC's basic requirements.

However, those taking action now to optimise CRC performance could receive net income of £130,000 - and be £410,000 better off than taking a basic compliance approach.

The impact is even greater with large multi-national organisations which, over seven years, could be up to £80 million better off.

Organisations covered by the CRC must buy carbon credits annually to cover their expected carbon emissions and will be listed in a league table showing the best and worst performers.

Companies which invest in carbon management and reduce their emissions will need to buy fewer credits, will perform better in the league table and will receive bonus payouts at the expense of other participants; creating net revenue, and reputational capital.

"Those that see the CRC as an opportunity will benefit," explains Stuart Bowman, Energy and Sustainability Director, hurleypalmerflatt.

"The CRC is not a tax - companies that understand it and approach it well can end up adding to their bottom line.

"We are in an era where sound environmental practice makes absolute commercial, as well as ethical, sense."

hurleypalmerflatt's analysis also examined different organisations by type and energy spend. It shows, at the extreme, that businesses could benefit by up to £80 million over the next seven years.

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