We are now well on the road to the end of the 1st year of the CRC.
We’ve had the scare stories, the organisations failing to register, or less organisations registering than had been 1st thought. Early estimates from the Government suggested 5000 plus organisations would be full participants with a further 20,000 as details disclosures. We’ve had just over 3,700 full participants register, what does this tell us?
For me, based on my research, it tells me that a good deal of organisations didn’t realize what they needed to do. For instance, a car dealership, an example Defra employed in their literature, if that dealership was a single franchise, SEAT as an example, then if a single SEAT dealer anywhere else in the UK had a half hour meter then ALL SEAT dealerships and SEAT organizations were in under the banner of SEAT, who had the responsibility of collating this details. That’s nice and simple, until you then take a look at if that same dealership had say SEAT and VW at the same premises, they’re out? Add to that the capacity to register independently so the SEAT brand did not have to account for everything that traded under its name . . . confused . . . therein lies the dilemma!
At least the Con/Dem co-alition government has pushed back the full implementation of phase 1 of the CRC by 12 months, the same for Phase 2.They are also looking at making the scheme simpler, firstly by making it a Tax, no payments from the pot for those that decrease emissions the most, Excellent or Poor?
For me it’s a bit of very good and bad, organisations no longer being rewarded for reducing emissions will must come across some other motivation to decrease emissions! The very good side is that it's giving these organisation much more time to get to grips with the scheme, nevertheless, as experience has shown, a good deal of organisations left it to the last minute before registering for the CRC, will they do the same once more?
Initially Phase 1 reporting is primarily about Scope 1 & 2 emissions, Scope 1 being based on energy you produce, as an example if you had a wind turbine and selling electricity back to the grid, Scope 2 is for energy you purchase.
However Phase 2 of the CRC is interesting, as it suggests that Scope three emissions will be included in a company’s declaration, a very good way of introducing mandatory emissions reporting for all via the back door. Scope three covers everything from Travel to Suppliers.
If we take a look at suppliers for a large organisation, this could easily be in the thousands, a local authority I recently met with, have in excess of 5000 suppliers, under phase 2 they will must liaise with all 5000, collate the emissions data for those 5000 and submit under the local authorities umbrella.
This will be an administrative nightmare for the unprepared, both the supplier and the large organisation. This will mean that for those who tender for work from larger organisations it will no longer be just a tick box exercise for environmental policy, such as ISO14001, it will be a detailed report on emissions and those not able to submit such a report, will ultimately, not win any business.
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20% of Glasgow businesses registered for the Carbon Reduction Commitment (CRC) scheme may have given the wrong information, according to research.
The scheme, which had a deadline of September 30 to sign up to, has already been branded ‘too complex’ by the Committee on Climate Change, although the Coalition government have suggested they are looking at simplifying the scheme. One step they have already taken is to change it to a “carbon tax” with all monies collected remaining with the treasury.
A leading energy firm has canvassed many financial directors in the UK, revealing 23% found the process confusing., and that’s just the initial preparation for Phase 1, what’s it going to be like for phase 2 when organisations will be required to provide declarations for their supply chain as well as their own. Just imagine an organisation with 5-10,000 suppliers, they will have to contact each and everyone to gather the suppliers emissions data.
Another 24% of the Finance Directors also reported issues with compiling data from multiple sites across their business, and one in 10 didn’t fully understand what was required of them to complete registration. This is highlighted by the fact that many Franchisors failed to collect adequate information, or indeed realise that they were required to, from their franchisee’ a perfect example here are car manufacturers failing to collate information from their dealerships!
Dave Lewis, of npower said: “If collecting the required information together was problematic, then going forward, many may well find the ongoing obligations of the scheme equally challenging.
“This confusion could also explain the high number of businesses that have left completing CRC registration to the last minute and are unsure if they have submitted the correct data.
The Environment Agency, the body overseeing the introduction of the scheme, have admitted many organisations found the CRC complicated and have promised to simplify it.
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