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Reliance Facilities Management recently hosted one of the first seminars for property and facilities management professionals on the subject of the Carbon Reduction Commitment Energy Efficiency Scheme – to give it its full name. This well-attended event was held at the Institute of Directors, a venue which set a serious tone appropriate to the nature of this programme which is currently looming large.

The CRCEES is legislation for the long-term management of the UK’s carbon-based infrastructure to support UK plc’s commitment to reducing CO2 emissions by 80% by 2050.

Bold statements are all very well but they need to be backed with a plan to make them a reality. The CRCEES is a mechanism to do just that by ensuring that both the private and public sectors are contributing to what could be termed as a stretch target for carbon emission reduction. The rest of the world is looking to the UK’s innovative scheme to see if it works, not dissimilar you might say to some years ago with the introduction of the congestion charge in London. Commentators sense that even a change of government would not put the scheme into reverse gear. It looks like this programme is here to stay.

The event featured contributions from two speakers, Sophie Hutchinson of Green 2020 and Paul Crowther of STC Energy Solutions, and was followed by an opportunity for guests to question and debate the points made during the presentations. The lively question and answer session highlighted the depth of concerns attendees have over the legislation, the actions necessary to meet the requirements and the potential negative impact on brand perception.

Past, current and future
The speakers clearly outlined the framework for ensuring compliance with the legislation starting with the consultation phase this year. Organisations are expected to assess current energy usage and indicate a projection for future usage based on their energy usage during 2008 and 2009. During 2010, the introductory phase, organisations will be monitoring and reporting energy usage and introducing early action metrics. The first league table of performance will be published in 2011 and carbon trading allowances will go on sale. In 2013, the first capped phase with be introduced, placing a cap on the total number of allowances available.

Organisations that have recently been contacted by government have been asked to start gathering the relevant data on their own energy consumption. For many organisations this will prove as much of a challenge as reducing consumption itself. For many, the diverse nature of their estates and the way in which energy is sourced and paid for will be a process that first has to be understood before it can be reported. Without this data, however, no organisation can prove whether they are outside of the scope of the CRC unless, of course, there are no half hourly meters settled on the half hourly market, anywhere within the estate.

The scheme will require the commitment of the entire organisation, not just to reduce future energy consumption, but to reflect on past energy demand. The majority who are asked to provide an account of their energy saving will not form part of the carbon trading scheme and league table that will emanate from performance; however, it is envisaged that 20,000 organisation will fall within the scheme. This might sound like organisations could gamble on not doing anything, but there are hefty penalties in place for not reporting the data which then defines whether or not you will be in the scheme.

There are certain other precursors to the legislation. These will require organisations to manage early action metrics that would by their nature reduce energy consumption, such as employee engagement and planning for automatic metering, and provide additional bonuses to their eventual standing on the league table of energy usage. Participating organisations must also ensure that a director is given responsibility to lead the carbon reduction commitment project. Potentially significant brand perception issues could arise for participating organisations from the implementation of the legislation. An organisation’s strategic approach to energy management will be made very public via the published table.

It became clear during the presentations that this is not a simple piece of legislation, but an attempt by the government to change the attitude of organisations to energy consumption. You could say that for those who embrace the measures, the scheme will be a galvanising factor for reducing consumption, and thereby saving significant costs from the bottom line. This will probably favour the larger organisations that, on the whole, have more sophisticated processes and data capture systems, more project management resource and larger budgets to recruit specialist consultancies to speed up implementation; however, the importance of the role of the FM community in this approach cannot be overstated.

Big job
Those participating in the debate acknowledged the enormity of the task that faces them in both data gathering and identifying energy saving measures. The complexity of galvanising the organisation around the scheme which requires communication skills, technical expertise, project management support and the input of the finance department to provide for purchasing of allowances will not be without its challenges. This is not just about resources but creating a cohesive multi-disciplined programme involving property and facilities, HR, and finance at the very least.

However, the most vociferous aspect of the debate centred on the bias of the legislation’s league table towards organisations that have not pro-actively been reducing their energy costs. Those who have preferred the carrot of cost reduction to the stick of legislation and have delivered year on year savings could find themselves starting from the same position on the league table as those whose energy reduction programme is in its infancy. A showing in the lower half of the table or beneath competitors will not only impact the organisation financially but have a negative impact on the brand and customer perception.

The Reliance Facilities Management seminar provided answers to many of the questions about the forthcoming legislation. Participants were presented with a road map (available by email) for planning a response to the recent government communication which could, crucially, enable them to avoid the penalties associated with process failure. Like many pieces of well-intentioned legislation, some participating organisations will be clearly disadvantaged, with many feeling that in the race to reduce energy consumption the tortoise could out-sprint the hare.

Dave Belshaw is Corporate Responsibility Manager at Reliance Facilities Management.