Four in five companies fail to disclose the paybacks of reducing carbon emissions to suppliers, according to a new study from the Carbon Disclosure Project and Accenture.

While firms, particularly those in Europe and Asia, are making progress, carbon reduction advances are not being extended into supply chains.

Examples of success cited in the report included PepsiCo’s work with suppliers in Chile to help them reduce water usage by 35 per cent.

Wal-Mart was praised for assisting supplier Dana Undies to reduce its energy bill by 71 per cent by encouraging it to adopt energy efficiency measures.

However, the report did find that businesses are demanding more from their suppliers than in the past.

For example, 90 per cent of responding companies have a climate change strategy with at least general guidelines for procurement, an increase from 79 per cent in 2010.

“Suppliers are becoming more transparent about their emissions-related information, in part due to growing pressure from corporate clients,” the report states.

Companies hesitating to invest in the environmental agenda may like to consider a new report from accounting giants KPMG, which has identified 10 environmental ‘megaforces’ with the potential to derail business growth.

Climate change, energy volatility and water availability have been identified as three of the ‘megaforces’ that organisations should be aware of over the next two decades.

The KPMG report aims to put a financial value on the environmental pressures businesses are likely to face and estimates that if companies had to pay for the full environmental costs of their production now it would amount to 41% of earnings.

Climate change, water scarcity, growing populations, deforestation, energy supply volatility, material resource scarcity, wage inflation, urbanisation, food security and ecosystem decline are the top ten environmental measures to be aware of.

KPMG warned that many businesses will have to take account of the external environmental costs on their balance sheets, particularly if governments make good on pledges to scrap certain fossil fuel and water subsidies and roll out carbon pricing schemes.

The research found that the external environmental costs of 11 key industry sectors jumped 50 per cent in the eight years to 2010.

Whilst food production had the largest environmental cost footprint of the 11 sectors studied, the electricity sector faced undeclared environmental costs worth $195bn, and the oil and gas industry’s costs topped $150bn.

Yvo de Boer, KPMG’s special global adviser on climate change and sustainability, and former head of the UN’s climate change secretariat, said businesses will experience an increasingly complex relationship with the environment over the next two decades, and as such will need to develop business plans that take account of climate change and other environmental pressures.

“Without action and strategic planning, risks will multiply and opportunities will be lost,” he said in a statement.

“Corporations are recognising there is value and opportunity in responsibility beyond the next quarter’s results – that what is good for people and the planet can also be good for the long-term bottom line and shareholder value.”

Businesses that want to have the competitive edge over their rivals can now show good evidence that they are committed to reducing carbon by obtaining CarbonLow’s recently approved CLEEAR Standard.

Accredited by the Environment Agency as being a Carbon Trust Standard equivalent under the Carbon Reduction Commitment (CRC), CLEEAR uses best practice in carbon measurement and management to benchmark companies’ carbon emissions reduction.

Depending on a business’s energy spend, CarbonLow will look at between one and three years energy data as well as details of travel undertaken in its own cars to decide whether an organisation has made an absolute or relative (against turnover) reduction in its carbon emissions; these are calculated using the latest figures from Defra. The company is also assessed against a set of management criteria to decide if it has incorporated carbon reduction into its day to day business.

Using methodology based on the Carbon Trust Standard Rules and with independent external verification, the CLEEAR Standard is robust way of evidencing a company’s carbon reduction journey.

CarbonLow’s CLEEAR Certification Manager Molly Warwick said:

“We think the CLEEAR Standard is a good way for a business to get serious about reducing carbon, whether or not they are in the CRC.

“Businesses are increasingly being asked to provide carbon credentials in tenders and pre-qualification questions.

“It is also a chance to have a look at energy data and assess whether the management is factoring carbon into its business practices.

“Whilst assessing for CLEEAR we can also advise on how to cut carbon and show businesses that this almost always leads to monetary savings in the long run.”

CLEEAR can be used by a CRC Participant as an early action metric under the CRC.

For more information about CarbonLow’s CLEEAR Standard see www.carbonlowemissions.co.uk/CLEEAR or call 0845 634 6071

Although the proposals are subject to consultation, the new Feed-in-Tariff rates are to be introduced on all installations commissioned on or after December 12^th, leaving little time for the solar industry to make its case against the cuts.

The plans would introduce a new tariff for schemes up to 4kW in size of 21p/kWh – down from the current 43.3p/kWh. Reduced rates are also proposed for schemes between 4kW and 250kW.

Climate Change and Energy Minister Greg Barker said that urgent action was needed to put the solar industry on a steadier, clearer and sustainable growth path.

“My priority is to put the solar industry on a firm footing so that it can remain a successful and prosperous part of the green economy, and so that it doesn’t fall victim to boom and bust.

“The plummeting costs of solar mean we’ve got no option but to act so that we stay within budget and not threaten the whole viability of the FITs scheme.

“Although I fully realise that adjusting to the new lower tariffs will be a big challenge for many firms, it won’t come as a surprise to many in the solar industry who’ve themselves acknowledged the big fall in costs and the big increase in their rate of return over the past year.

“Our proposal for an energy efficiency requirement, as well as the launch of the Green Deal next autumn, creates a massive opportunity for these firms to use their expertise to get a foothold in this exciting new market.

“People who are now thinking of installing solar PV need to do so with their eyes wide open and I’d encourage them to call the Energy Saving Trust for the latest advice.”

The DECC claim that cuts will be easily absorbed as the cost of an average domestic PV installation has fallen by at least 30% since the start of the scheme – from around £13,000 in April 2010 to £9,000 now and that a recent surge in householders installing solar PV threatens to ‘break the budget’.

The solar PV industry reacted angrily to the proposals calling for protests and urging the government to reconsider.

The new proposed tariffs would apply to all new solar PV installations with an eligibility date on or after 12 December 2011. Such installations would receive the current tariff before moving to the lower tariffs on 1 April 2012. Consumers who already receive FITs will see their existing payments unchanged, and those with an eligibility date on or before 12 December will receive the current rates for 25 years.

The eligibility date of a project is based on it being commissioned (in working order) and having its request for accreditation received by a FIT licensee (schemes up to 50kW) or Ofgem (more than 50kW).

Climate change minister Greg Barker announced the news on Twitter, confirming the scheme, which is designed to mirror the feed-in tariff scheme and offers generators of renewable technologies a payment for the heat they generate, will go ahead.

“RHI EU now given state aid approval,” Barker wrote. “Revised regs now re-laid in Parlt putting us bang on course for launch end of November.”

The scheme was on course to be launched f at the start of October, but was delayed after the government failed to get the green light from Brussels under State Aid regulations.

Negotiations with Brussels mean the tariff for biomass installations with over 1MW of capacity will fall from the 2.7p per kilowatt hour (kWh) agreed in March and approved by Parliament in July, to just 1p/kWh.

A spokeswoman for the Department of Energy and Climate Change (DECC) confirmed the rates had been dropped following negotiations with Brussels.

“We have now updated the Renewable Heat Incentive regulations to reflect the required change to large scale biomass tariff by the European Commission,” she said in a statement.

“The regulations have been laid before Parliament and, subject to Parliamentary approval, we hope to open the scheme before the end of November,” she added. “We appreciate that this is frustrating, however without this change the scheme would not have been able to proceed.”

Shareholder pressure is driving multinational companies to look for low-carbon suppliers, according to a new report from Carbon Trust Advisory and they are also willing to pay a premium to ensure these credentials are in place

The study of senior managers, carried out for the Carbon Trust by Dynamic Markets, found that 50% will be selecting suppliers the basis of their carbon performance in the future in a bid to cut ‘cradle to grave’ product-associated emissions.

According to the report, Cutting Carbon in the Value Chain, 29% of suppliers are likely to lose their contracts if they do not have a good carbon performance record, while 58% of the managers surveyed said that they would pay a premium for a low-carbon supplier.

Scrutiny of supply chain emissions marks the next stage of corporate responsibility, since 93% of those surveyed saying that they are already addressing their own emissions.

While 40% of companies are now looking at their indirect emissions originating from their supply chain, its importance is only likely to become more important in future. In the UK, 74% of respondents said shareholder pressure would drive greater scrutiny of the supply chain in future, while in the US the figure stands at 32%.

“Going forward, as carbon becomes more widely understood as a commodity, there will be increasing pressure from external sources, particularly shareholders, to make companies address the carbon intensive area of supply chain emissions,” says Hugh Jones, managing director of Carbon Trust Advisory.

“The rewards are there for businesses to tackle emissions in the supply chain; in the form of new revenue streams, reduced risks, emissions and costs. But the going isn’t easy and requires significant commitment,” he adds.

The research also shows the potential rewards for suppliers that can ensure their place on ‘green’ supply chains by meeting the criterion of carbon efficiency held by multinationals. Of those addressing supply chain emissions:

• 66% are willing to pay a premium of around 10% to purchase a product or service with low emissions
• 65% sell products and services that reduce the carbon footprint of their customers
• 71% procure key products from suppliers with lower carbon footprints

Telecommunications giant, BT, for example, introduced a climate change procurement standard earlier in the year for its 16,700 suppliers.

“This isn’t something that we’re obliged to do, but we see it as key to delivering on our commitments on carbon reduction while also leading broader efforts to decouple business growth from energy use and CO₂ emissions,” explains chief sustainability officer Niall Dunne.

CarbonLow assists major UK manufacturing companies with their annual Carbon Disclosure Project submissions using its bespoke carbon accounting software iCAT. For more information on how you can take part in the CDP email cdp@carbonlow.co.uk

Greater Manchester has committed to reducing its carbon emissions by nearly half over the next decade, the Manchester Evening News has revealed.

Council leaders have drawn up a strategy document under which the region’s ten local authorities will work together to slash emissions by 48 per cent by 2020.

Transport and raising carbon awareness are top of the agenda in a bid to make the people of Manchester more energy efficient and green in the way they live and work.

The Manchester region is already on its way to a greener transport system with the first electric charging points for cars set to be unveiled in the autumn and a multi-million pound expansion of the Metrolink tram network, which aims to increase passenger numbers from 55,000 to 90,000.

Other incentives include the use of smart meters to measure energy use and a more localised approach to the provision of goods and services to the ten councils taking part in the plan.

Councillor Dave Goddard, chairman of Greater Manchester’s Environment Commission, said:

“Having been the birthplace of the industrial revolution, Greater Manchester now aims to be at the forefront of the green revolution. By working together across the 10 areas of Greater Manchester to transform our transport, energy and buildings, we can lead the way in reducing our carbon consumption.

“The strategy sets out our ambitions and marks a commitment by all members of the Combined Authority to a greener future. To achieve our overall aims, everyone will need to act, from individual households to large organisations.

“What the Combined Authority will do is provide leadership and support for those actions.”

The strategy says that potential investment in low carbon projects will top £10 million over the next five years.

Like all other councils, Greater Manchester is obliged to take part in the Carbon Reduction Commitment so any incentive to reduce its emissions will help to reduce its financial burden with a knock-on benefit to local residents.

Technology becoming a reality

To be in action by the end of 2015, the site for the plant has already been identified and the project has had the approval of the energy minister Charles Hendry.

The £23.5 million investment in carbon capture and storage will be rolled out over two stages; the first sees Costain working with the University of Edinburgh and Imperial College London to carry out the front end engineering design work followed by the much costlier stage of building the plant and analysing the results.
ETI chief executive Dr David Clarke said: “Current technologies significantly increase the costs of capturing CO₂ and reduce the power output or increase fuel consumption.
“This project will develop technology which will reduce the costs and increase performance to allow a full-scale commercially viable facility to be ready for power export by 2020.”
The government has so far pledged to invest public funds in four carbon capture and storage demonstration projects, and created a requirement for new coal-fired power stations to be built with carbon capture and storage facilities already in place.

The ETI is also commissioning a project to develop and demonstrate next generation carbon capture technologies specifically for gas fired power stations. An announcement on who will carry out the work on this project is expected by early 2012.

Homes off the gas grid will get help for wood-burning boilers

DECC have this week announced details of the cash payments they are offering to householders to help with the cost of installing renewable heat systems.

Air and ground source heat pumps, biomass boilers and solar thermal panels are technologies that will be eligible for the grants of up to £1250.

The Government’s new £15 million ‘Renewable Heat Premium Payment’ scheme – which will open for applications on 1st August this year until March next year – will support up to 25,000 installations.
The scheme will be mainly focused at around 4 million households in Great Britain not heated by mains gas, who have to rely on higher carbon forms of heating which also tend to be more expensive than gas, such as heating oil and electric fires to keep warm.

Participants will be asked to provide detailed feedback on their experience through a set of surveys.  This will allow Government to gather information to better understand renewable heat technologies.  The Government will also provide, for a significant sample of participants, additional meters for their heating equipment. This will provide more detailed information so DECC can compare manufacturers’ and installers’ claims about performance  with real data on energy use.

Climate Change Minister Greg Barker said:

“Today starts a new era in home heating because we’re making it more economical for people to go green by providing discounts off the cost of eco heaters. This should be great news for people who are reliant on expensive oil or electric heating as the Premium Payment scheme is really aimed at them.

“Getting money off an eco heater will not just cut carbon emissions, it will also help create a market in developing, selling and installing kit like solar thermal panels or heat pumps.”

How to apply

The Premium Payment scheme will be run by the Energy Saving Trust and Householders can call 0800 512 012 for more information.

Grants for the following technologies will be available from August 1^st on a first come first served basis

• Ground Source Heat Pump – £1250 grant (for homes without mains gas heating)
• Biomass boiler – £950 grant (for homes without mains gas heating)
• Air source heat pump – £850 grant (for homes without mains gas heating)
• Solar thermal hot water panels – £300 grant (available to all households regardless of the type of heating system used)

Around £3m of the £15m will be set aside for registered social landlords to improve their housing stock.

Renewable Heat Incentive for industry, business and communities

The Government is also introducing financial assistance for industry, business and communities to generate their own renewable heat.  It is intended that the Renewable Heat Incentive (RHI) will be open for applications from 30th September and administered by Ofgem E-Serve. Those interested in finding out information ahead of being able to apply in September can contact Ofgem E-Serve from on 0845 200 2122 or by visiting www.ofgem.gov.uk/rhi