Many of us were eagerly awaiting the Chancellor’s Budget 2016 statement last month, anticipating the changes to the Energy Efficiency Taxation Review. Following the announcement, on Thursday 14th April we gathered 60 companies at 15 Hatfields, London’s most sustainable venue, to host a Post-Budget Crucial Compliance Changes Workshop.
This workshop built on the success of our similar workshop in October 2015. Gary Shanahan, Head, Business Energy Taxes and Reporting at the Department for Energy and Climate Change (DECC) joined us to give the delegates an overview of the key changes to the CRC scheme, Mandatory Emissions Reporting (MER), Climate Change Agreements (CCAs), and the Climate Change Levy (CCL), and to explore what these changes meant for them as a business.
DECC’s invaluable insight into the current and future changes was evident in the outpouring of questions submitted to Gary following his presentation.
Another highlight was Terry Clarke, Group Sustainability Manager for Segro, who gave a detailed presentation on how Segro have used the Minimum Energy Efficiency Standards to drive their energy reduction efforts.
Throughout the morning workshop, we encouraged our own consultation process, before the official consultation begins later this year. Our CTO, Cian Duggan, led two roundtable sessions to encourage discussion among the delegates and provide feedback to DECC to inform the future process.
What attributes should an ideal simplified reporting framework have?
The delegates overwhelmingly agreed that the new reporting framework should be include:
- Mandatory reporting on consumption/emissions to the government
- Mandatory annual internal audit
- Board-level sign-off, in the same manner as CRC and ESOS
Whether transport should be included in this mandatory reporting raised a great deal of debate among the roundtables. Many believed inclusion would help reveal opportunities and areas of productivity. However, the complexity of the data, meant that others were unsure.
The need for a single verified dataset was emphasised. For example, an online portal – similar to that of the CRC. Companies could submit multiple data streams, reducing the administrative burden. Furthermore, good data collection was highlighted as key, particularly when setting targets.
Despite uncertainty around existing funding metrics, it was also suggested that legislation might be used to oblige companies to implement certain carbon reduction projects – such as, those with paybacks of less than two years.
However, many also believed that companies should have the flexibility to pick and choose projects, in order to maximise impact.
What data related challenges do we face in achieving robust and timely carbon reporting compliance?
A summary of the key challenges the attendees faced was as follows:
- Inability to use the same single data source for multiple reporting frameworks
- Reporting becomes a stressful end-of-the-year, reactive process. Large, complex datasets mean that despite extensive planning, the reporting period remains time-consuming and difficult
- Auditing and verification of our data is a difficult activity: Most delegates find that a lot of time and effort is spent cleansing their data
- Compliance data programmes do not clearly convert data into action and success for performance improvement. However, it was also noted that using data for performance had helped to grow the industry – more specifically, CRC had helped to engage energy managers with sustainability issues
- A lack of confidence in the integrity of data
So, what’s next?
Last year, despite these compliance schemes affecting over 10,000 companies, DECC received only 356 responses to the consultation. With the second consultation set to kick off later this year, DECC will be gathering awareness of the upcoming consultation across the UK.
A clear outcome of the workshop was the desire – both from DECC and the delegates – for a simplified reporting framework. Carbon Credentials will be holding a pre-consultation workshop to raise awareness and collect feedback to present to DECC, once the details are announced.
If you would like to have your say, subscribe to our blog for regular updates on the compliance changes and how you can get involved in DECC’s consultation later this year.
In the meantime, if you would like to discuss the evolving policy landscape and how to plan your compliance activities through to 2019, please contact us here.
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