FOR ALL THEIR green efforts, the Big Four found themselves ranked lower than some would have expected in the first carbon reduction league table.
The newly introduced government scheme forces companies, which spend at least £500,000 annually on energy bills, to pay for and report on their carbon emissions. Based on the reports, the government has published the first league table of how these businesses fared against each other.
The Carbon Reduction Commitment Energy Efficiency Scheme (CRC) not only hits the wallets of companies, but publicly reveals their achievements, or lack of.
Organisations collated a year’s worth of information to April 2011, before submitting it to the government.
When legislation to introduce the CRC was passed, the Big Four embraced it with enthusiasm. Both KPMG and PwC announced that their new offices in Canary Wharf would be environmentally friendly, with ways to utilise rainwater, use less electricity and recycling all thrown into the mix.
But the Big Four only just managed to scrape into the top 100, with KPMG ranking 99th, while Deloitte came bottom of the four at 296.
When it comes to environmental issues, the top firms tend to lead the pack. Earlier this week all four were singled out as providing the best sustainability consulting services in world – ahead of specialist firms. So with sustainability such a priority, why didn’t they finish higher?
Deloitte explains that as the ranking is based on information submitted during registration last year, it has failed to show the progress of the firms since then.
“[The CRC] is a step in the right direction, but doesn’t paint the full picture. It does not currently consider the energy efficiency of an organisation, or whether participants have improved their energy performance over the year. This will, however, be reflected in next year’s table.”
Another impediment to the firms’ – and other companies’ – performance could stem from the cost of making large-scale and costly environmental changes prior to the scheme’s start date.
“Those participants who focused on reducing their energy use and carbon footprint prior to the scheme coming into force, are likely to feel penalised: with the low hanging fruit already picked, reducing their emissions further will be more difficult and costly.”
However, for many, the main problem is the importance attributed to readings from new meters fitted by companies as part of the CRC to more accurately measure energy consumption.
Those that fitted the meters quickly were scored higher in the table than those that had their meter in place for a shorter timeframe during the reporting period.
Critics argue that the emphasis placed on the meters has diluted other types of carbon reduction initiatives implemented by the slower adopters.
PwC’s sustainability and climate change partner Henry Le Fleming, said: “League tables grab the headlines, from a reputational point of view, but the devil is in the detail.
“This year’s results overlook wider emissions reduction and climate change-related activities. Some companies at the bottom of the table may have programmes in place which are already making progress in reducing emissions in their wider business.”
But it is not all doom and gloom. According to KPMG, the league table is a good benchmark and indicator of organisations that have taken steps to manage their carbon usage.
“It creates a solid base for understanding – with actual data – what the emissions are for this middle tier of emitters, which have rarely been examined before,” said Vincent Neate, head of KPMG’s UK climate change and sustainability practice.
The scheme is due to net the government about £734m in its first year and about £1bn a year by 2014/2015. However, this does not take into account the companies (of which there are more than 100) that failed to comply with the legislation and face fines in the region of £45,000 each. This is based on a charge of £12/tonne of carbon.
Also, Neate believes the table’s impact on an organisation will encourage boardroom discussion on how to reduce emissions, which has to be a good thing.
Regardless of the technicalities and the scheme’s teething problems, it is on course to help the government reduce emissions by 20% by 2020. Thousands of organisations across the country are battling to find ways to reduce carbon emissions in their supply chain and operations. In this respect, the government initiative has been a success.
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