The Registration Pack documents have now been published by the Environment Agency.  The complexity of complying with the Scheme is now known.

1. Key Clarifications

Responsibility for Compliance:

• Members of a group of undertakings in the private sector are jointly and severally liable.  This means that every member of the group is together liable and also each member of the group is separately liable for the group’s compliance and for any of the civil or criminal penalties;
• Enforcement action for a group’s failure to comply could therefore be taken against the group, or against any individual member of the group;
• Significant Group Undertakings (SGUs) must be registered by 30 June 2010:
• The major opportunity is for parent and subsidiary companies to assess any advantages from creating groups of ‘Significant Group Undertakings’ – issues such as the reputation of household brand names, sale or M&A strategies or even HVAC plant replacement schemes could all justify the creation of SGUs;
• Domestic supply emissions are included for University halls of residence, boarding schools;Residential care homes, nursing homes, hospitals, care homes for the elderly / those with a disability;Police and Forces housing; monasteries, nunneries and other similar religious establishments;
• Corporate-owned vehicles’ emissions operating without a licence, such as on-site vehicles, are included;
• Qualification assessment for CRC Phase 2 is 2010-2011.

2. Key Action Timings

• Emissions data platform: integrating with existing company management information software platforms can take many months of negotiation and organisation, emission accuracy needs to be to 5%, across your property portfolio from April 2010, this takes time and needs planning;
• Significant Group Undertakings: a parent company Board may need time this Winter to plan how to group SGUs and the best options for future development plans.
• KPI Reduction Targets: from April 2011, managers will need to be performance managed, so your HR department should roll out a staff engagement programme from Spring 2010.

3. Key Recommendations

We recommend that CRC obligated organisations do the following:

• Re-evaluate Directors’ & Officers insurance liability cover; the CRC civil and criminal penalties brings, in to sharp focus, the obligations of the Companies Act 2006 Environmental Liability Directive, which became law on 1 March 2009;
• Conduct SGU options appraisals in the next 3 months to assess CRC liabilities and reduction potential;
• Start preparing Registration Evidence Packs and monitoring regimes, our experience indicates that getting to 5% data accuracy across a portfolio can take up to 9 months;
• Review strategy and policy - many companies can, in our experience, demonstrate and meet Carbon Trust Standard Level 1 and gain the benefit of the Early Action Metrics; and
• Work through Liability Scenarios – use the Aardvark League Table Liability Calculator to determine a strategy for CRC over the next 3 years.  Our experience, for example, of a 250,000ft², 10 floor commercial office building shows that expenditure on installing Automatic Meter Readers for the Early Action Metric credits would not solely be recovered from the League Table payback in Phase 1 – however, cost reductions from robust energy reduction management procedures could recover the AMR costs.

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