When questioned about the new Carbon Reduction Commitment (CRC) – a new carbon reduction scheme aimed at large businesses, announced last year in the Energy White Paper[1] – 71% of intensive energy users said they believed that the scheme would make the UK uncompetitive. And, when asked about the implementation of such regulation, 63% of respondents said they thought the costs of doing so would outweigh the benefits. Less than half (48%) believed that the CRC would achieve its target of removing 1.2 million tonnes of CO₂ from the atmosphere each year by 2020.

The Government has shown a desire to involve businesses in meeting the UK’s CO₂ reduction targets and introduced a framework of regulation to incentivise and reward emission reduction, but npower business’s findings would indicate companies need further convincing that this is the best method. Comments from the report suggest that British businesses feel penalised as other European and global businesses do not have to conform to the same administrative and financial requirements imposed by UK regulation.

“Businesses have faced a raft of new legislation in recent years, with more now promised in the form of the CRC, so it is understandable that they may feel the responsibility to reduce CO₂ is being placed at their door. However, with the UK’s CO₂ emission targets becoming legally binding this year, we cannot escape the fact that all businesses will be called on to reduce their carbon footprint,” said Paul Coffey, managing director of npower business.

“While the need to actively reduce CO₂ has become a business requirement in only the last few years, it will increasingly become a priority as low carbon outputs become evermore linked with strong financial performance. Those that identify the advantages of low carbon operations now, and work within the existing legislative framework, will be the ones that benefit in the future,” he added.

Mr. Coffey points to the fact that advice is available from energy providers and government organisations, which can assist businesses in reducing CO₂ output. The nBEI clearly suggests businesses are in need of guidance: 56% agreed they would value help in reducing CO₂ emissions and 50% said they would welcome guidance to improve energy efficiency.

While the findings would suggest a lack of support for carbon reduction regulation in business, the latest Index reveals mixed messages. A significant majority of respondents (88%) said they support the Government’s commitment to reduce CO₂ emissions and 56% also said they thought compliance with climate change agreements had resulted in energy savings or process improvements. Also, 36% said they believed there were commercial advantages to be had from a small carbon footprint – a significantly higher response than in npower business’s 2007 report, which revealed widespread misunderstanding of the Low Carbon Economy. Comments from the research suggest that business customers are becoming more environmentally conscious, leading to those selling to them seeing benefit in meeting this demand.

npower business believes the framework of legislation will call on businesses to develop new business models if they are to succeed within a Low Carbon Economy, with energy use no exception.

“Businesses will have to develop policies to manage the risks associated with energy use including cost, environmental and societal risks. In this way, decisions on energy buying and investment in efficiency measures that can reduce CO₂ outputs can be assessed on a more holistic basis, rather than just cost. This moves away from a quick win scenario in which energy efficiency measures are only made for financial gain to a more progressive strategy in which the approach to energy management and CO₂ reduction is aligned with business goals,” added Mr Coffey.