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Many of the articles published recently about the Carbon Reduction Commitment Energy Efficiency Scheme – the CRC – have focused solely on meeting requirements and ensuring conformity. However, this approach misses a real opportunity for businesses to engage staff and create in-house targets within their CSR commitments. Rather than simply asking 'How do we comply?', we should be asking 'What can the CRC do that will enhance our organisation's corporate social responsibility, reputation and profitability?'

Global emission reduction targets are non-negotiable, and companies are inevitably searching for ways to quickly and efficiency ensure that they are meeting those targets. We are finding, however, that our facilities management clients in the public and private sectors can actively benefit both financially and in terms of reputation from pre-emptive adoption of energy efficiency planning and implementation. More than that, we as facilities managers are playing a key role in helping them to achieve these objectives.

Operational efficiency across the building lifecycle
In order to reach UK and global greenhouse gas reduction targets and deadlines, the legislative net is likely to tighten even further down the road. Consequently, organisations that fall below the current CRC registration criteria should adopt early action efficiency principles by utilising the best available resources.

In-house energy management expertise is not a widely available resource for many businesses. However, as facilities managers with an increasingly broad remit, we can help address operational energy efficiency across the whole building lifecycle. Progressive facilities management teams will be conversant with gaining greater efficiencies from the same building envelope by implementing workplace densification and flexible working practices. Simultaneously, we can optimise the infrastructure efficiency by providing energy maintenance and technology selection on a whole lifecycle operating cost basis.

Data collection and reporting
Despite the fact we are already well into the CRC registration window, which commenced on 1st April 2010 and closes at the end of September 2010, much confusion still exists. As a priority, organisations must manage their risk. To understand whether they are captured within the CRC scheme, companies must accurately identify all electricity owned and consumed in half hourly meters (HHM) within the calendar year 2008. Organisations that consumed less than 6,000 MWh of electricity through HHM are required to submit an information disclosure. Those that consumed more than 6,000 MWh of electricity through HHM must register as a participant in the online registry by the end of September.

Accurate data collection and interpretation are fundamental to targeting energy and environmental excess within any organisation, as well as being crucial to CSR reporting and proof of compliance. Due to the profit-centred and geographically disparate nature of many modern organisations, this task is not as simple as it might appear.

For these companies, investing in a reputable and automated data collection, targeting and reporting process is vital to remove human error and reduce inaccuracy as far as possible. Web-based sustainability and CSR database solutions on the market that support the Global Reporting Initiative , the Carbon Disclosure Project and CRC reporting can be expensive, but the reality is that many organisations spend similar resources on manual input, ad hoc consultancy and service costs associated with annual data collection and reporting. Businesses captured within the CRC scheme will require an auditable system of data collection for all utilities. Forward-thinking companies that invest in a process that fully engages all the stakeholders will be rewarded with transparent best business practices and continuous improvement in information sharing.

As FM providers, we are the logical owners who can implement corporate-wide data collection and reporting platforms, ensuring transparent communication across our companies’ property portfolios. This involves selecting the right reporting solution that will work with existing client systems, as inter-compatible software reduces manual data entry and encourages user take-up. Ensuring stakeholders have visibility of the system success is also crucial to maintaining goodwill and continued buy-in, thus allowing them to produce the accurate data and information that will be crucial to their ongoing success.

Cultural change
Ultimately, we should be looking at what business benefits can be gained through active participation rather than attempting to meet tick-box criteria. This requires a step-change in many organisational cultures. Those that are benefitting from early adoption typically have a number of things in common. Firstly, they all have appointed a board-level director accountable for CSR and, in turn, CRC compliance. This clearly demonstrates an organisation’s environmental commitment and aspirations to both internal and external stakeholders.

Secondly, these organisations have developed and are using a 'living' CSR strategy and policy, which clearly defines a framework of why, how and who will gain from a bespoke CSR agenda and how CRC obligations are interwoven into this agenda. Thirdly, ring-fencing the necessary financial and people resources is recognised as critical to achieving data collection, opportunity identification, efficiency implementation, communication and reporting.

Facilities consultancy can help to identify and support this cultural change. FM consultants often have a good understanding of their customer's business and operational culture, and hence are able to create a programme of activity identified through questioning the status quo. A progressive approach is to bring innovation to the client by engaging the necessary energy auditing and creating a menu of energy efficiency projects with fully supported business cases and funding solutions. This leaves clients with a number of available opportunities and peace of mind that you, the FM provider, are proactively future-proofing the business.

League table position
The current 'footprint' year, which runs from April 2010 to March 2011, will be critical to those organisations captured within the CRC scheme, as the first league table results will be based solely on efficiencies made in this year. Organisations that have not already done so must as a matter of urgency identify and implement efficiencies now or face the consequences of being placed in the bottom percentile of the table. The ramifications are two fold: a company’s position in the league table will be a very public demonstration of its corporate commitment (or lack thereof) to the environment, and it will directly affect whether the company is financially penalised or rewarded — an indicator of commitment to its bottom-line profitability.

Many organisations have consistently used the fact that they do not own much, or any, of their property portfolio as a reason to avoid capital energy investment. But the advent of carbon reduction legislation effectively removes this argument. Capital investment can still be thoughtfully applied according to length of lease remaining or internal ROI criteria, budgetary restraints and energy efficiency investment to date.

Initially, it is vitally important to establish a benchmark of consumption for all utilities across a building portfolio. The more frequently data is sampled, the better the CRC’s emphasis on HHM data. This will allow an educated user to pinpoint areas of excessive usage and thus apply energy reduction initiatives in order to trim the energy envelope - often referred to as the energy 'top hat' model. The definition of an educated user is an individual that has a good understanding of building dynamics, operation and usage, often found within your facilities management or O&M team. Interestingly, most of these efficiencies can be achieved through reviewing working hours and methods and through changes to building management controls, much of which is cost-neutral and can be achieved quickly through consultation with the building users.

If an organisation is looking to target energy efficiency projects that create the greatest energy savings over the shortest period of time in order to leverage these savings in the CRC league table, then it is critical to get an energy audit underway as soon as is feasible.

External services can be engaged through reputable energy consultants or ESCOs - though demand is understandably high due to the onset the footprint year. In any case, prior to commissioning any work, it is important to clearly define the output that is required from the energy auditing process to ensure the energy implementation projects identified are prioritised to meet the desired timeframe, impact and ROI criteria.

Organisations that lease premises have greater opportunities available to them due to advances in efficient technology; for example, a much greater range of projects now fall into ROI windows of 24 months or less. In addition, many capital equipment investments are removable assets, ranging from LED lamps to voltage optimisers, thus overcoming the reluctance to invest in what was previously perceived as fixed assets.

The importance of funding
The funding issue should never be underrated as this is the hurdle that can prevent energy efficiency projects from being implemented. Businesses must establish the value they place on reducing their carbon footprint within their wider CSR remit; sadly, standard practice in business case justification almost invariably finds greater business incentivisation through investing in projects such as R&D, marketing or process upgrades.

As a guideline, the majority of participants within the lower percentile of the CRC league table will incur estimated costs equivalent to 15% of their total utility expenditure. Logically, this would suggest that as a minimum, organisations should be investing an equal amount into Opex or Capex energy reduction programmes to offset potential year-on-year penalty costs. Moving into the second, uncapped, phase of the CRC, it has been estimated that carbon trading costs will rise from the capped cost of £12 per tonne of CO2 to a cost £40- £50 per tonne - thus it is simple to see the logic of applying a year-on-year energy reduction programme.

Sustainable energy efficiency is a continuous cycle, not a one-off event. Organisations that undertake living CSR strategies and policies gain through reducing consumption and keeping it down. In turn, this activity delivers bottom-line savings, increased reputational value and future-proofing against further carbon legislation and risk.

Georgina Perkins is Director of Sustainability at Mace, the building advisory and project management group.