Inform Finance Future carbon pricing predicted
Footprinting will be required in ten years, say finance heads
Most finance heads at the UK’s biggest companies anticipate that all businesses will be required to measure their carbon footprint and pay a price for the carbon they emit, according to research from the Carbon Trust Standard Company.
Forty percent expect this to hap- pen within the next decade, while 16% believe this will be the case within five years. The survey, which heard from 200 heads of finance from firms with more than 500 employees, showed that, despite expecting an increase in legislation related to car- bon and energy use, a large propor- tion of respondents do not have a clear picture of where their busi- nesses currently stands on carbon emissions.
Nearly half (48%) do not have a clear corporate target for carbon reduction and a further 16% don’t know if their company has a target
George Osborne: encouraged banks to invest in green technologies
or not. Three quarters of finance decision makers admit that their business does not currently meas- ure its carbon footprint.
“The debate about whether or not carbon footprinting and pay- ment will become mandatory for business appears to be over as far as finance heads are concerned,” said Harry Morrison, head of the Carbon Trust Standard Company.
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“Yet only a minority have taken action so far and these early movers have a clear advantage. Building carbon management into the DNA of the business now not only ensures preparedness for future compliance requirements but also brings immediate cost and efficien- cy benefits and competitive edge.” Those that hold the purse strings within business are agreed that the switchover to the low carbon econ- omy will happen, while one in ten doubts this. However, only 26% believe their organisation is pre- pared for the change and just over a quarter (27%) don’t know if their company is prepared or not. When asked if they believe the low-carbon economy provides an opportunity for their business, 43% of finance heads take a posi- tive view for their companies but the differences between industries are marked, with technology and FMCG companies the most posi- tive and professional services firms, retailers and financial services organisations the least positive.
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New research from think tank Policy Exchange reveals how the total levy in energy – effectively tax to pay for climate and renewable energy policies – is set to soar by 2020. The figures reveal that by 2020, the cost of policies like the Renewables Obligation and Feed-in Tariffs – which pay householders to produce power uneconomically through technolo- gies like solar – will hit over £16B a year. That is a tripling in less than a decade, and equivalent to 4p on the current basic rate of income tax, or 2% of total forecast tax revenues in 2020.
Solarcentury, the UK’s most experienced solar energy company, has secured a £8.25M deal from Lloyds TSB Corporate Markets to enable it to continue its growth plans across Europe. The firm, which designs, develops and supplies solar ener- gy products, has invested heavily in inter- national expansion over the past five years and now has a strong presence in Italy and France. The extra cash will help to support this plan and enable the company to secure further contracts across Europe.
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TruckEast, the main dealer of Scania trucks in South East England, has imple- mented Vita Energia’s lighting energy effi- ciency solutions, saving the company
around £20,000 and 40 tonnes of CO2 emissions a year. The interest-free loan from the Carbon Trust gives a payback of 13 months and the project has not only cut cost, but improved the quality of light at the Wellingborough site.
LACK OF PLANNING Despite oil prices soaring, just a third of transport companies have put carbon reduction plans in place, according to a global report by the Carbon Disclosure Project. In Europe, the transport sec- tor generates around E363B a year and in the US, the industry contributes $1.38T to the economy.
But only 9% of companies have current investments in new technologies or emission reduction initiatives and less than half have a clear under- standing of the risks and busi- ness opportunities associated with regulations. There are, however, a hand- ful of transport companies that are setting the bar in carbon reduction initiatives and invest- ments, including Air France, Toyota and UPS – from alter- nate fuels to product innova- tion and eco-design, to renew- able energy systems.
REWARDING ISAs Funds that provide a carbon tilt to favour low-carbon compa- nies could see a rise in UK investments under proposals to reserve increases in ISA lim- its for green ISAs. The Green Investment Bank Commission has out- lined recommendations for a new financial institution to finance low-carbon invest- ments, including plans to attract money from retail as well as institutional investors. “These products accept that
large companies currently employing conventional tech- nologies will make an impor- tant contribution to greening our economy by increasing the carbon efficiency of their busi- nesses; these new low carbon ISAs will reward this transition by overweighting the most car- bon efficient companies,” said Simon Thomas, chief executive of Trucost.
BRIEFS FROM JANUARY 2011,ANYONE WANTING TO BUY AN ELECTRIC CAR WILL BE GIVEN £5,000 TOWARDS THE COST BY THE GOVERNMENT Sustainable Business | August/September 2010 | 11
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