Confused, Unaware or Unwilling: Organisations Approach the Carbon Reduction Commitment Deadline

September 29, 2010 by SAP News 0

London, UKA survey of over 200 C-suite business executives in the UK[1] qualifying for the Carbon Reduction Commitment Energy Efficiency Scheme (CRC EES), has found that with one day to go until the registration deadline, a high proportion of organisations are even more confused, unaware or unwilling to engage with the scheme than one year ago. This research, conducted by Coleman Parkes and commissioned by SAP, found that 20% of organisations have still not registered for the scheme and of these, 78% are unsure if they qualify. Interestingly, nearly 10% of respondents would rather face the fines than commit and 11% incorrectly believe that they do not qualify. With the CRC EES only marking the beginning of efforts towards a low-carbon economy, these findings show UK businesses still have some way to go.

This news comes one year on from SAP’s first survey in October 2009 which found 20% had not even started planning for the scheme, suggesting that little progress has been made in preparing for the legislation. While in 2009 nearly 60% said they had a formal, well-communicated environmental strategy, this year’s results suggest that those who were once confident are now unsure, with only 41% stating that this was the case. A clear lack of understanding of the scheme’s potential to help businesses save energy, reduce costs and increase efficiency is also evident, with a 77% majority using systems such as spreadsheets to collect and handle the data, and a further 72% having no confirmed plans on how to use the data they collect.

The research revealed that companies are confused about how to collect and report the data. Only 14% of those surveyed said they feel prepared, know what do with the data, and what the report will look like. Half of the respondents surveyed were unsure of both the current and next stages of the CRC EES, and again half were unsure about how to collect and collate the data to submit their footprint report. With organisations’ greatest fears being the cost of administrating the process (50%), and not being able to collect and report the right data (20%), the findings demonstrate a high level of uncertainty and confusion holding businesses back from fully engaging with the scheme.

“The research findings show that a high number of organisations, registered and unregistered, are now more confused than ever before about their strategy, and are still not confident with the systems they are using to manage and collate the data” said Martin McCann, Head of Sustainability at SAP UK and Ireland. “Accurately collating energy and fuel data need not be a huge spreadsheet manipulation task with heavy auditing processes and wide margin for error. If organisations want to perform well, they need a simple and comprehensive management system to easily gather and analyse their carbon data. With the deadline so close, businesses need to act quickly to make this scheme a success for their business.”

The research also found that the majority (58% of respondents) believe regulation to be necessary for the move to a low carbon economy, highlighting a change in how businesses view the CRC EES. SAP’s survey in 2009 revealed that many saw it as another tax on business and additional red tape.

Other key findings from the research include:

  • Only 12% think they are in a stronger position than their peers
  • Only 35% think adherence will make their business more competitive, despite previous findings showing that the majority of finance enterprises rated CRC compliance as important in their investment decisions
  • 7 out of 10 companies say the CRC scheme will add to the organisations’ administrative burden with respect to environmental issues

SAP has a long history of developing IT systems to help companies meet sustainability requirements. It recently launched SAP Carbon Impact, an on-demand carbon management solution that helps organisations accurately measure, mitigate, and monetize greenhouse gas emissions, and other environmental impacts across their business. Industry leaders are using SAP Carbon Impact as their resource for reducing the cost of maintaining a carbon emissions inventory, managing regulatory changes, and enhancing brand value by providing transparency into sustainability initiatives.

About the Carbon Reduction Commitment (CRC) legislation
The carbon reduction commitment (CRC) is a UK-wide scheme to encourage organisations to reduce their carbon emissions, starting in April 2010. The CRC will mainly affect large private and public sector organisations; these can be made up of many businesses. If half hourly metered electricity use was below 6,000 MWh in 2008 ‘information disclosure’ of electricity consumption to the CRC registry is required. Qualifying organisations will eventually have to purchase allowances sold by the government for each tonne of CO2 they emit. At the end of 2011, the Government will also start to publish an annual league table showing the best and worst performers. Additionally, they will also start to cap the number of allowances that companies are able to buy, meaning they will be legally obliged to reduce their emissions.

About SAP
SAP is the world’s leading provider of business software(*), offering applications and services that enable companies of all sizes and in more than 25 industries to become best-run businesses. With more than 97,000 customers in over 120 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE, under the symbol “SAP.” For more information, visit www.sap.com.

(*) SAP defines business software as comprising enterprise resource planning, business intelligence, and related applications.

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Molly McDonagh, SAP UK PR Manager, molly.mcdonagh@sap.com / +44 (0)7966 975 287
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