KPMG says two thirds of region’s firms could face ‘carbon fines’

BUSINESS advisors KPMG have warned that companies across the North West must comply with the government’s new carbon reduction commitment (CRC) or face financial penalties.
 
Organisations with annual electricity bills of approximately £1m or more must start measuring and accurately reporting their energy usage to government auditors
from 1 April, 2010.

Those that submit late or inaccurate data could be penalised and publicly chastised for those failures. 

Research carried out by KPMG suggests that two thirds of businesses in the region are mistating their carbon numbers by a margin that will incur fines.

From April 2011, the government will publish league tables ranking participants on their success at managing and reducing their carbon emissions. 

Ben Wielgus, from KPMG’s sustainability advisory group in the North, said: “There are still signs, even at this late stage, that many of the scheme’s participants are not yet fully prepared for the CRC.

“Some are hopeful of a last minute postponement of the scheme, thinking this is signalled by the delays in clarifying some of the scheme’s more complex areas. However, we believe the scheme is going to start in April and all organisations should be prepared by now. 

“The penalties for late or inaccurate data submission mean organisations could find themselves incurring unexpected costs and their efforts to establish green credentials could be severely set back. 

“Furthermore, many organisations don’t fully understand the implications of the CRC league table’s early action bonuses, so may miss out on this form of potential return on investment.

“The Government’s hope is that the scheme will incentivise large, non-energy intensive organisations to reduce their carbon emissions; indeed it expects to achieve an annual saving of 4.4 million tonnes of CO2 by 2020. We estimate the CRC will affect up to 5,000 full participants, while a further 10,000 or more will have compliance obligations, although will not have to trade carbon – for now.”