Special Report
sponsored by 
Director of Finance has engaged a panel of experts to discuss what finance directors should be concerned about regarding the carbon reduction agenda. This special report engages business leaders on the upcoming Carbon Reduction Commitment and the latest green technologies at their disposal.
>> Back to The Carbon Agenda special report
Stakes are high ahead of CRC |
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| Special Reports | |
| Written by Institute of Chartered Accountants in England and Wales | |
| Friday, 16 October 2009 | |
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Carbon allowances could cost FDs tens from tens of thousands of pounds to millions per individual organisation. The cost of carbon allowances under the Carbon Reduction Commitment (CRC) is expected to range from tens of thousands of pounds to millions per individual organisation, but are financial directors ready to lay their cards on the table? With many organisations yet to realise fully the financial implications of the legislation, the Carbon Trust and the Institute of Chartered Accountants in England and Wales (ICAEW) are urging financial directors to think now about their game plan and take early action to reduce the cost of compliance and minimise risk.To help financial directors prepare for the CRC, the Carbon Trust Standard, in conjunction with the Institute of Chartered Accountants in England and Wales (ICAEW), has created a guide that highlights the financial and accounting issues that finance directors need to prepare for. Harry Morrison, general manager of the Carbon Trust Standard said: “The CRC has significant financial implications for businesses and organisations so it is vital that financial directors understand how it will affect them and how they can profit from early action. Those sitting back and waiting for the scheme to start in April 2010 are taking a huge gamble, as it will affect their ranking in the CRC performance league table and means they will miss out on ongoing financial savings from reducing energy use now. By following the advice in our guide and taking action to cut energy use and emissions now, organisations can expect to achieve a higher ranking in the league table and will reduce their exposure to financial risk.” Financial directors can establish how much is actually at stake for their organisation and find out how to profit from early action using the guide. They can also gain a detailed understanding of the balance sheet implications, internal auditing requirements and how best to manage regulatory and financial risk. Richard Spencer Head of Sustainability at the ICAEW added: “It’s important that finance directors fully understand the financial implications of the legislation and the potential cost of inaction. They will need to build an accurate understanding of their energy costs and develop appropriate reporting and auditing procedures to reflect this. The CRC includes significant penalties so FDs should take the time to understand what they need to do to comply and how they can benefit from early action.” The first year of the CRC league table is based exclusively on early action and efforts made will determine the full bonus or penalty, rewarding organisations that have taken early action to reduce carbon emissions on a voluntary basis before 2010. The Carbon Trust Standard has been recognised as an official early action metric for the CRC and will count towards performance in the CRC league table. It is a mark of excellence that is independently assessed and awarded to companies that measure, manage and reduce their carbon emissions over time and can help them to put in place a long-term carbon management programme.
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