Two Thirds Of Enterprises Not Ready For Carbon Accounting

The date for the implementation of the UK’s Carbon Reduction Commitment (CRC) legislation is fast approaching, requiring organisations to purchase allowances for every tonne of CO2 they emit, but the latest research suggests that two thirds of participating organisations are still unprepared.

In a survey of 400 British businesses qualifying for the CRC, conducted by SAP, the majority of respondents were found to be unprepared, despite the legislation being less than 130 days away. While 77 percent of enterprises perceive the CRC to be an opportunity to improve their carbon footprint, less than half have employed the necessary IT systems to enable this improvement.

Businesses need to plan ahead

The UK’s CRC is a mandatory cap on carbon emissions, due to be introduced in April next year, that will apply to large organisations in the public and private sectors and could help cut emissions by 1.2 million tonnes per year by 2020, according to government figures.

Around 20 percent of organisations surveyed admitted that they haven’t even started planning the measures they need to take, while a third of those that do have a plan of action to tackle their carbon footprints are relying on primitive methods to track their progress.

In particular, many are using Excel spreadsheets, which are inadequate for full accounting: “We were horrified by the prevalence of Microsoft Excel as the tool of choice to collect and store carbon data” said David Metcalfe of Verdantix, who produced an earlier report on software for carbon accounting.

“This immature approach to data management triggers a wide range of risks such as inaccurate reporting, an inability to forecast future emissions and constricted communications on sustainability performance,” said Metcalfe, who is taking part in an eWEEK Europe web seminar on carbon accounting on December 15.

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Register for eWEEK Europe’s webinar on CRC issues and the impact of the Copenhagen summit, on 15 December.

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SAP also noted there there was much discrepancy between businesses with regard to who is responsible for managing CRC compliance, suggesting that many enterprises are not taking the commitment as seriously as they should be.

“Clear governance and ownership for the CRC will be essential to reducing the administrative burden of what will become an annual requirement,” said Simon Godfrey, SAP’s sustainability champion for the UK and Ireland. “At the same time if organisations want to perform well in the league tables they need a comprehensive carbon management system in place to be able to easily collect, gather and analyse data pertaining to their carbon emissions.”

The survey also found that, unless companies implement systems to reduce emissions, they face possible reputational damage when the government publishes its first league table showing the best and worst CRC performers at the end of 2011. Many finance enterprises now rate CRC compliance as an important factor in their investment decisions, with 44 percent claiming they would decline investment to poorly performing organisations.