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Follow on Google News | CRC puts big responsibility on Financial DirectorsInaccuracy in reported carbon emissions could be fined more aggressively under the CRC scheme, reports Envido.
By: Envido By 2010, the UK government had promised to reduce carbon emissions by 12%. However, it is on target to make a 20% reduction. The government introduced a new Climate Change Act, which has as one of its major components the CRC, due to begin in just a few months. The CRC will apply initially to the 5,000 companies and public sector organisations judged to have the highest levels of energy use. CRC members are required to buy permits to emit carbon in advance and receive refunds proportional to their performance in carbon emission reductions relative to other scheme participants. CRC members will need to accurately record their energy use to avoid potentially large fines for companies that fail to report accurately and on time. Financial Directors cannot afford to postpone environmental issues any longer. The CRC is the first piece of UK legislation to directly place a financial value on carbon emissions from non energy-intensive sectors, and is unlikely to be the last. Carbon accounting has now moved from a voluntary reporting process to the CRC legislative compliance regime. The measures place carbon emissions firmly on the agenda of Financial Directors of those companies initially selected as participants of the CRC scheme. Although there are no published plans to extend the CRC scheme to a larger number of companies or to a wider range of emissions, it is almost inevitable that the CRC will be expanded if it proves to be successful. Is your organization ready for the CRC? In order to prepare for the CRC, companies will need to have a detailed plan in place to cope with the reporting and carbon reduction requirements of the legislation. The ability to forecast exposure, cash flow, and the use of carbon allowances against actual budgeted allowances will be critical. For a medium-sized company, the penalty for a 10% inaccuracy in reported carbon emissions could be as much as £150,000 under the CRC. Establishing the right process will be necessary to ensure confidence in the CRC audit trail. Through implementing carbon reporting software they will need to get an accurate picture of their current emissions for the CRC. This information will allow them to create an accurate forecast of how their carbon emissions may change in the future, to be factored into their financial planning. Another feature of the CRC is that the participants’ # # # Envido is an energy and carbon solutions firm who provide a fully integrated and comprehensive set of products and services to successfully manage your carbon journey. We cover carbon consultancy, programme management, and technology and behavioral change delivery that have enabled clients both large and small across the public and private sectors to save millions of £'s through improved energy and carbon management. http:/www.envido.co.uk End
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