The UK is struggling to cope with the next level of climate change legislation, a Birmingham-based lawyer has said.
The warning follows a survey in which DLA Piper teamed up with United Utilities, Business in the Community and The Prince’s May Day Network to discover how prepared UK businesses really are when it comes to implementing climate change strategies.
In particular, the survey focused on the awareness of impending Carbon Reduction Commitment (CRC) regulations due to be implemented in April 2010.
Neil Bowker, litigation partner at the Birmingham office of DLA Piper, said: “The results were surprising and indicated that UK plc is ill-prepared.”
Of the 1,695 respondents, over 266 decision makers – senior managers, directors and board members – indicated that awareness of CRC is poor, with one in three reporting their organisation needs urgent advice and support on the new mandatory emissions trading scheme. Organisations affected will need to purchase sufficient credits to cover their energy use and trade back unused ones.
Penalties will apply to companies who do not comply with the scheme.
Mr Bowker said: “Firms need to formulate a strategy for coping with the new rules. This might include buying sufficient allowances in the carbon market to cover forecasted energy consumption; making energy efficiencies to avoid being caught by the CRC; restructuring energy supply; or implementing a climate change agreement.
“Landlord and tenant relationships are one area where CRC compliance will need to be given careful attention.
“Most obligations will rest with a landlord unless the tenant is the purchaser of the energy. For companies which have more than one leasehold site, it will be necessary to assess each property on a case by case basis to understand the obligations and ensure compliance.
“Another problem for some is the aggregation of energy consumption across organisations. Obligations for reporting under CRC rest with the top company in a group structure. Many organisations are also concerned about the reputational impact of the Environment Agency Performance Table and its role in recycling CRC revenues.
“It is likely that each organisation subject to the scheme will be benchmarked in some way. For companies that have already invested in sustainability initiatives, reductions in future energy consumption will be harder to achieve.”
Mr Bowker said clients needed to “carbon-proof” their organisation. That meant a carbon reduction commitment and carbon trading, adapting business plans and processes to climate change, legislative and policy monitoring to help stay one step ahead, reviews of processes and training mechanisms and energy audits.