CRC Role for FMs

This increased focus on energy saving within the FM’s role is a new and unknown challenge for many. There still remains limited practical advice out there to assist facilities professionals in addressing the constantly changing legislative landscape, including CRC. However, despite the complexity of the CRC initiative, new research commissioned by IMServ has shown that only two percent of UK businesses do not know whether they qualify for the scheme. This figure compares to 20 percent in the public sector and 30 percent in the private sector just a year ago. The research also revealed that only two percent of organisations are ignorant of their carbon footprint in contrast to nearly 70 percent last year.

In fact more UK businesses now see CRC as an opportunity rather than a stealth tax and are expressing bullish optimism regarding their ability to meet CRC challenges and evaluate their future league position. This greater awareness of the CRC within the business community is an encouraging sign but many business sectors have been badly hit by the recession, so CRC understandably still remains a high concern.

IMServ recently commissioned a major piece of research which revealed that UK business will face a £1.4bn bill for carbon credits by April 2011. So what is vital now is that those responsible for an organisation’s energy start budgeting for these allowances and formulating their carbon strategies. Those that don’t act now will end up paying more in the long term. IMServ has a 65 percent share of and extensive expertise in the energy metering and data sector so it is ideally positioned to help organisations tackle the UK’s new carbon emissions trading scheme.

Although the CRC doesn’t start operating until April 2010, we are already in the first phase of the scheme. There are a number of deadlines within this introductory phase that FMs should be aware of. (See table right). Unfortunately the way in which organisations are defined under CRC has already led to some confusion, especially over the detailed rules regarding subsidiaries, franchises and public sector organisations.

IMServ has assisted many organisations in determining whether they are one of the 20,000 organisations that The Department of Energy & Climate Change has estimated will be involved in CRC at some level. FMs should be aware that next month the Environment Agency will send out qualification packs to all half-hourly billing addresses. It is important to ensure the relevant people are aware and respond correctly. Qualification for CRC is based on half-hourly electricity consumption during the qualification period’ – i.e. for the introductory phases this is the 2008 calendar year. This can be a complicated process for FMs that look after more than one

site. IMServ can provide on-site consultants and not only make all CRC declarations on behalf of a client but also manage CRC services on an ongoing basis. IMServ has developed a unique reporting tool that can be bought or out-sourced and will allow organisations to collate all information that is required for the CRC evidence packs and footprint reports.

In the short term organisations that may be affected by the CRC should consult the CRC users’ guide (see left and above right)) which is available at: www.defra.gov.uk/environment/climatechange/uk/business/crc/index.htm

In recent years, and with the Government’s recent Budget announcements, energy reduction has changed from being a sidelined corporate social responsibility (CSR) problem to a key business issue.

Facilities management professionals have a unique opportunity with CRC to take responsibility for what many anticipate will be, moving forward, a pivotal business role. After all, it’s only a matter of time before CRC becomes a Board-level issue; in fact, many forward-thinking Chief Executives are already taking a personal interest in making sure their business is ready for the challenge that lies ahead.

However, some FMs will have their work cut out as there still remains a significant number of businesses where energy still isn’t getting the Board-level focus that it warrants. This lack of focus is due in part to the way carbon and energy issues have previously been treated by Government and business managers. Traditional energy saving has been driven by a desire to improve an organisation’s public image with a real lack of focus on the economic benefits of complying.

The economic benefits of CRC are, however, potentially very significant. The government has estimated that the total financial benefit to CRC participants will be around £1bn by 2020. In addition to financial incentives, the scheme will also provide a reputational incentive. The scheme will help organisations save money by becoming

more efficient and reducing their energy bills. In addition those organisations that perform well and reduce their emissions will appear higher in the Government’s annual performance league tables.An organisation’s league table position will also affect how much revenue that organisation receives back.

It is hoped that the combination of financial and reputational benefits will encourage organisations to review and develop energy management strategies and also generate awareness of emissions at a senior level. For FMs based within an organisation, CRC and the growing visibility of carbon and energy issues presents another platform to raise profiles at a senior management level. Likewise, outsourced FMs also have the opportunity to use CRC as a way to add value and become further imbeddedwithin an organisation’s structure.

The FM fraternity has a huge job ahead with CRC but as Henry Garthwaite from the Carbon Trust highlighted at a recent IMServ event, there are some quick wins that can be made through simple behavioural change, without the need for huge investment. For example a single computer and monitor left on 24-hours a day could cost over £50 a year, switching it off out of hours and enabling standby features could reduce this to £15 a year. Likewise, enabling energy saving features on appliances can reduce energy consumption by up to 30 percent.

Responsibility for implementing and managing energy projects including CRC is more likely than ever to fall to the FM and in many cases it will come to dominate their role. It is, therefore, vital that FMs get to grips with CRC as soon as possible and start planning for its financial impact in order to maximize the benefits that CRC can bring.