UK retail lags in CRC compliance

September 6, 2010

Retailers are lagging behind other major industries in realising the positive impact Energy Efficiency Scheme compliance can have on image and sales success

CA Technologies has announced the results of an independent carbon management study commissioned by the company entitled “CRC Inspires Carbon Management Leadership”.

It reveals that UK retail organisations are slow to recognise that adherence to the UK Government’s Carbon Reduction Commitment (CRC) Energy Efficiency Scheme (EES) can drive incremental sales by improving brand image. Only 40% of retail companies believe enhanced brand image will drive sales, compared with 77% of telecommunications and technology firms, 75% of fast-moving consumer goods (FMCG), and 52% in financial services.

Compliance low on retail’s list

The report by independent analyst research firm Verdantix also revealed that 56% of UK retailers agree that firms achieving leadership in the CRC will deliver significant energy efficiency cost savings. This perception lags behind FMCG/pharmaceutical organisations (in this sector, 85% agree it will deliver cost savings) and financial services firms (69%), but is marginally ahead of telecommunications and technology companies (52%). However, 76% of UK retail organisations are of the belief that companies achieving a leadership position in the CRC league table in October 2011 will avoid CRC penalties and fines from non-compliance. This compares with 80% in telecommunications and technology, 75% in FMCG, and 73% in financial services.

“Retail organisations in the UK appear to be sceptical over the improved profile that leaders may receive in the CRC,” said Sonny Masero, vice president of CA ecoSoftware for CA Technologies. “As other industries already recognise, carbon management leadership can help increase sales via enhanced brand image, while simultaneously delivering significant energy efficiency and cost savings. Although the CRC EES does require up-front investment in carbon allowances, this liability can be reduced through the effective management of emissions reduction projects. Organisations may also avoid fines from non-compliance by improving data quality.”

Legislating for eco-friendly change

Carbon management has implications for an organisation’s brand value, competitive positioning, share value, and energy costs – and the CRC Energy Efficiency Scheme is central to the UK government’s strategy for improving energy efficiency and reducing carbon emissions. Launched on 1 April 2010, the scheme is designed to raise awareness in large organisations, especially at a senior level, and encourage changes in energy and carbon management behaviour. The scheme features an annual performance league table that ranks participants on energy efficiency and carbon management performance.

Turning to what UK retail respondents consider the requirements for CRC leadership to be, 30% consider carbon management software is essential for CRC leadership (compared to a cross-industry average of 50%)?and 20% already rely on the technology. The majority (83%) still use spreadsheets to manage energy and carbon data, despite concerns about their ability to scale to meet requirements for compliance.

The independent research survey “CRC Inspires Carbon Management Leadership” was conducted by Verdantix, an independent analyst research firm, on behalf of CA Technologies during January and February 2010. Verdantix interviewed 202 carbon management experts in some of the UK’s largest organisations, 55% of which have revenues above $1 billion (£650 million).