Don’t Ignore Carbon Reduction Scheme: KPMG

Lucas Gilmore, “Big 4″ observer
October 11, 2010 /

KPMG International has warned companies who fail to comply with the requirements of the new CRC (Carbon Reduction Commitment) Energy Efficiency Scheme, that they could be facing substantial financial penalties.

According to an analysis by KPMG, businesses that do not comply with the legislation consistently during the first year the CRC scheme will face financial penalties equating up to 20% of their annual energy bills.

KPMG found that this penalty obligation is 20 times more than what companies who comply with the legislation will have to pay for.

Poor performers, or businesses which don’t effectively reduce their carbon footprint, will have to face the revenue recycling bonus and penalty system. This system sees money being shifted from companies who are at the bottom of the table to reward those who are the top performers.

In the first year of the CRC scheme however, KPMG found that the penalty of being at the bottom of the list will see companies pay only about 1% of their energy bills.

Vincent Neate, who is KPMG’s UK head of climate change and sustainability, said in a statement that he is concerned about “by the degree of consternation caused by the CRC Energy Efficiency Scheme registration process when that was the easy bit.” He says that the actual hard work that businesses would have to do would be when they do their carbon data reporting.

The situation is likely to change. As the penalty and maximum bonus of the scheme goes up, it will lead to an improvement in performances.

The penalty for non-complying with the scheme will rise by 10% every year, and will reach 50% in 5 years.

Neate further added that at the moment, companies should put their efforts in complying with the standards.


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