Trust in the Trust
Director of Delivery and External Relations, Dr Garry Felgate explains what the Carbon Trust can do for your business
Businesses produce almost half of the UK’s carbon emissions, which are among the main causes of climate change. Over the last few years, awareness of the potential impact and implications of climate change for business has been growing: 80% of the Financial Times Global 500 companies now acknowledge climate change as a business risk. Climate change mitigation is therefore now an issue at the top of the business agenda.
However, earlier this year, the Carbon Trust conducted research amongst 1,500 small and medium-sized enterprises (SMEs) and found that a lack of information was preventing some organisations from addressing the issue.
The Carbon Trust has partnered with the Institute of Directors (IOD) to produce a practical handbook that demonstrates what businesses need to do to cut their carbon emissions – together, crucially, with the commercial benefits of doing so. The handbook provides advice, top tips and useful contacts which will help all organisations, from local authorities to SMEs, to tackle the problem.
Why take action?
Businesses that lack information often see the task of climate change mitigation as a burden to progress. However, there are significant economic benefits for companies that implement carbon management and mitigation measures successfully. Energy efficiency, for example, can be implemented in all types and sizes of organisations, and simple measures can cut costs by around 20%.
Initial steps should include conducting an audit. The guide outlines what businesses need to look out for when surveying their organisation. Businesses can also download sector-specific factsheets from www.thecarbontrust.co.uk and develop a tailored energy-efficiency action plan to get the most relevant energy information for their organisation.
For change to be successful, board-level commitment will be a necessity, and senior management will need to motivate employees continually to ensure that plans work in practice.
High street retailer Marks and Spencer is one business that’s seen the benefits of this. Recently the recipient of the Carbon Trust’s Energy Efficiency award, M&S stood out for its boardroom commitment, its co-ordinated energy efficiency efforts, and the way it motivated staff at branch level. The firm has a dedicated energy manager, and branches that made particular savings were rewarded.
If businesses are serious about making a difference, carbon emissions reduction needs to be applied to all areas of the business, from reviewing company car policies to ensuring a low-carbon supply chain and procurement, to maintaining a low-carbon building.
For larger companies, the guide outlines some starting points from which to plan energy management, including: developing a corporate carbon strategy; appointing an energy manager and identifying specific measures. Help is also available for those wanting assistance with their programme.
For smaller organisations, the Carbon Trust offers a wide range of advice and guidance on energy efficiency that can help reap cost benefits. Energy is a controllable overhead, not a fixed cost, so proper management of this expenditure can have a significant impact on the bottom line.
Those businesses that are keen to invest in energy-efficient equipment but are concerned about the large up-front costs can apply for an interest-free energy efficiency loan. Businesses are awarded loans of up to £100,000 to help with the purchase of equipment, such as boilers and lighting.
Coming out in the wash
Regency Laundry, based in Bath, is among those to have benefited from such a loan. Although the company had already invested heavily in energy-saving equipment, it was still spending nearly £85,000 a year on energy. Seeking to reduce this further, the company contacted the Carbon Trust and was awarded a loan of £14,000 to replace existing mechanical steam trap valves with newer, more energy-efficient steam traps. This replacement is saving the company around £3,650 a year.
Businesses can also make savings by investing in products that qualify for enhanced capital allowances (ECAs). The ECA is a tax relief that allows businesses to deduct 100% of their qualifying capital expenditure against their taxable profits in the period of investment. The Carbon Trust manages the Energy Technology List (ETL), which details the products that qualify for the ECA. The ETL currently includes over 6,000 products which meet energy-saving criteria.
Climate change mitigation need not be a burden for organisations, but rather a manageable issue that can have considerable cost benefits.
The Carbon Trust helpline is 0800 085 2005. Copies of the IoD guide can be downloaded from www.thecarbontrust.co.uk