A LEADING global environmental and sustainability consultancy is helping companies across the North West cope with the £72 billion cost of meeting their obligations for flexing into a low carbon economy.
Deloitte, who conducted a “mini-Stern” review for the region, recently estimated that the cost of responding to climate change for businesses in the Greater Manchester area alone is a staggering £21billion - with many companies unwilling to face up to their responsibilities.
But experts at Manchester-based WSP Environment and Energy said while the costs may be phenomenal, responding to new climate change legislation also has immense benefits.
They are currently helping local companies recognise and respond to those opportunities and as members of Chemicals Northwest, are helping chemical companies and other industry in Greater Manchester respond to new legislation.
The chemical industry in the North West is the largest chemical producing area in the country and includes 650 companies which employ more than 50,000 people. It contributes £10bn annually to the UK’s economy.
Brad Blundell WSP Environment and Energy managing director said: “The Northwest region is extremely well-placed for driving the switch to alternative fuels in the future.
“But despite this, the region is only just getting to grips with the new emerging climate change rules and regulations.
“For example from April 1 2010 the CRC Energy Efficiency Scheme (formerly known as the Carbon Reduction Commitment) will come into force. This will be a major challenge for businesses as they must adapt their processes to meet these obligations.
“Very few companies are prepared for these rules and have not yet even thought about putting the appropriate support systems in place. The level of awareness in the region is still extremely poor. Indeed, nearly 5 years after the start of the EU Emissions Trading Scheme (EU ETS), those companies in the chemicals and other sectors not immediately in the scheme remain confused and some have fallen foul of the scheme regulations – risking financial penalties and reputations.
“Companies must begin preparing themselves now. They need to understand how CRC will affect them and what they have to do. If they’re in the EU ETS, or have Climate Change Agreements, are they automatically exempt?
“We have our people directly seconded into businesses so they can help them respond to the April 1 deadline.”
“However, it must be noted that those who respond appropriately could position themselves to see positive monetary gains.
“Companies need to understand that there are significant benefits to be had under the CRC. These new regulations are real opportunities for the companies at the forefront.”
In December the UK Government passed the Climate Change Act 2008, C27, which committed the UK to reduce its overall Carbon Emissions by at least 80% by 2050 based on a 1990 baseline. The Act created powers to develop new policy which will encourage both business and consumers to reduce their carbon emissions and environmental footprint.
This first piece of policy is the CRC.
CRC is a new mandatory carbon emissions cap and trade scheme developed by the newly created Department of Energy and Climate Change ‘DECC’, Scottish Government and Welsh Assembly.
It focuses on bringing non-energy intensive organisations attention towards the real challenges of Climate Change as UK and Global Business move towards a low carbon economy.
The scheme will place legal obligations on some 5,000 or so participant organisations and for between 15,000 and 20,000 companies to disclose their energy usage and carbon footprint, and buy or trade carbon credits via the scheme.
The scheme will see the most efficient organisations receiving financial bonuses and a top ranking in the publicly available performance league table.
Mr Blundell, who has 21 years experience in the environmental sector, said: “The CRC does not just make sense from an environmental perspective – but from a commercial one.
“It is a considerable opportunity for businesses to save money and gain financial bonuses.
“With business being increasingly squeezed, saving money wherever possible makes great business sense as well as environmental sense.
“All corporate sustainability programmes have two imperatives today – reducing operating costs and demonstrating the continued business relevance of sustainability in a downturn.
“Sustainability is an operational issue for many management boards and as a result of CRC cannot be seen as being less relevant in an economic downturn.”
Last year WSP Environment and Energy saved 470,000 tonnes of carbon for their clients. This is directly attributed to the advice they provided their clients on sustainability.
They also recently saved one client £85,000 for a very modest outlay of cost on just one property across a portfolio of activities
Typically WSP Environment and Energy achieve 10 to 15% cost savings for each client through conducting a detailed evaluation of the utilities profile for a property/plant.
Mr Blundell said all Chemicals Northwest members and Northwest businesses must think ahead about what their future sustainability issues are for their business? Where is the value? What are the risks?
He said the benefits to be had were immense for those companies at the forefront of the environmental revolution - with the use of new technologies being one of the key areas for advancement.
He added: “Chemical companies such as Ineos Chlor in Runcorn will benefit immensely by being so forward thinking.
“AFC Energy has installed a new fuel cell on the Ineos site which uses hydrogen (a by-product of chlorine production) to generate power.
“The environmental sector is still youthful and there are gains to be had by embracing it.
“Up until recently environmental consultants were just looking at the impact of business and commerce on the environment - but the tables have turned.
“For perhaps the first time, we are now forced to evaluate the impact of the environment on business and commerce as a consequence of climate change and its potential impacts.
“WSP Environment and Energy are providing management information - not just technical information – to our clients to guide them through this shift.
“We have ditched the technical jargon, focused on plain speaking analysis of the science and ensure we deliver real commercial advice to managers.
“That helps the management team make the commercial decisions they need to and do so quickly.”