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ESGHR strategy

Credit crunch fails to derail green agenda

by Personnel Today 28 Jul 2008
by Personnel Today 28 Jul 2008

Energy efficiency is now a top cost-cutting priority for professional services businesses looking to combat the impact of a potential economic slowdown, according to new research released today by the Carbon Trust.

But with UK industry still wasting almost £7 million a day on poor energy efficiency2, the Carbon Trust and business groups are urging businesses to seize the potential savings on offer.

Of business leaders in the professional services sector surveyed by the Carbon Trust, more said that reducing carbon emissions had risen up their agenda in the last six months than those who said it had fallen down their agenda (15 per cent vs 10 per cent).

And they now rank energy efficiency ahead of redundancies or cutting or cancelling staff bonuses as a potential cost-saving measure.

New statistical analysis by the Carbon Trust also highlights the scale and urgency of the issue, with estimates showing that UK businesses could collectively save nearly £2.5 billion during the next 12 months, simply by implementing cost effective energy efficiency measures.

And the savings are not just the preserve of large energy-intensive companies: the potential savings for SMEs alone are around £1.3 billion.

The staggering £2.5 billion figure is equivalent to:

13 per cent of UK companies’ energy bills

The combined annual salaries of more than 100,000 employees on an average wage
 
With more than three in five (61%) company bosses surveyed in the professional services sector either actively cutting costs or considering doing so, the Carbon Trust is urging them to get in touch to seek help in reducing their energy bills and their carbon emissions.

Hugh Jones, Solutions Director at the Carbon Trust, said:

“Our research shows that energy efficiency measures, not job cuts or salary freezes, are the cost-cutting steps businesses are considering first during this economically challenging time. It’s an encouraging sign that wise companies are realising that cutting carbon and being green is the easiest way to make a business lean.

“Our new statistics provide stark evidence that if companies are starting to feel the bite from the economic downturn, the first place to look for cost savings should be their energy bill. There are literally millions of pounds going out of the window every day, across the UK.

“We’re talking about money that could be saved by making quick and easy changes such as encouraging staff to turn off computers and lights, turning down the heating, or maintaining equipment properly.”

Carbon emissions are the key cause of climate change, and business is responsible for around 40 per cent of all carbon dioxide emissions in the UK.

The Carbon Trust analysis shows that as well as saving cash, the measures would save around 22m tonnes of carbon dioxide emissions – equivalent to Scotland’s total annual business and commercial carbon emissions.

Large companies in particular appear to be ready to take action, with a third (33 per cent) of bosses of companies with more than 250 employees claiming carbon reduction has gone up their agenda in the last six months.

And bucking the predictions of some recent commentators, there are clear signs carbon reduction is not dropping off the priority list of those who have already put targets in place.

Over a third (36 per cent) of business leaders surveyed who have carbon reduction targets say the issue is rising up their agenda, compared to just nine per cent who say it is going down.

This is in contrast to bosses who have no targets and are not planning on putting any in place, among whom only eight per cent say it is rising up their agenda – suggesting they are yet to realise the potential cost savings available through carbon reduction measures.

Neil Bentley, Director of Business Environment at the CBI said,

“We welcome these findings from the Carbon Trust, which support the CBI’s conclusions that despite a choppy economic outlook, climate change remains a priority for business.

“The analysis confirms the compelling business case for urgent action to improve energy efficiency and common-sense measures like turning off lights and turning the heating down can lead to substantial reductions in firms’ energy bills.”

David Boomer, Head of Energy Efficiency and Climate Change at the Institute of Directors commented,

“IoD data also confirms the findings of the Carbon Trust. Energy Efficiency is one of the most cost-effective measures that business can take to reduce operational costs and improve their competitiveness.

“The IoD’s research shows that those businesses currently addressing energy efficiency have reduced their bills by 6-10%, with savings of up to 20% being achievable. We strongly endorse the Carbon Trust’s message and would encourage businesses of all sizes to reduce their energy use.”

The Carbon Trust already works successfully with thousands of businesses offering practical help and advice. 

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Businesses with energy bills of more than £50,000 a year can apply for carbon surveys which can help to identify energy-saving opportunities. 

Interest free Energy-Efficiency Loans of up to £100k (£400k available to all businesses in Northern Ireland supported by Invest Northern Ireland) are also available to SMEs to help them invest in energy-saving equipment such as improved lighting, boilers and insulation.

Personnel Today

Personnel Today articles are written by an expert team of award-winning journalists who have been covering HR and L&D for many years. Some of our content is attributed to "Personnel Today" for a number of reasons, including: when numerous authors are associated with writing or editing a piece; or when the author is unknown (particularly for older articles).

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