Construction firms top final CRC league table

BAM Construction and Skanska have been named the best performing participants in the second year of the carbon reduction commitment energy efficiency scheme (CRC), but questions have been raised over the ranking's calculations

Following a four-month delay, the Environment Agency has today (26 February 2013) published the second and final league table ranking the performance of the 2,097 CRC participants.

BAM Construction was revealed as the best performing organisation, after cutting both its absolute CO2 output and its emissions per unit of turnover, as calculated under the CRC, by more than 64% compared with the first reporting year. Fellow construction firm, Skanska was ranked second, with Carillion and Costain also appearing in the top 12.

The UK arm of communications company Motorola Solutions finished out the top three having reduced its total carbon emissions from 8,040 tonnes to 2,997 tonnes.

The highest ranked public sector organisation was Manchester’s City Council, which was ranked fourth, followed by the NHS Blood and Transplant service in sixth and the department for communities and local government, which cut its CO2 emissions by more than 70% year-on-year.

Meanwhile, Kerry Holdings, which makes ingredients and flavourings for the food sector, was ranked in last place, after its absolute emissions, as measured by the CRC, grew from 1 tonne of CO2 to 352 tonnes (a 35,100% increase). Other poor performers in the table include ING Bank, whose absolute emissions more than doubled year-on-year, and Kodak, which was ranked 2091 following a 255% increase on CO2 per unit of turnover.

While the first CRC performance league table, published in November 2011, ranked participants only on the early actions taken to improve energy efficiency (certifying against the Carbon Trust standard, for example) the second year’s scoring is based on a combination of early action measures, reductions in absolute emissions and cuts to emissions per unit of turnover or revenue expenditure.

However, questions have been raised about the methodology adopted by the Environment Agency in calculating the rankings, with the top ranked performer refusing to support it.

“The 64% reduction cited in the league table is not accurate in real terms and represents a magnitude of reduction that no organisation could expect to achieve without significant operational changes,” confirmed a spokesperson from BAM Construction.

“The largest source of reductions in the league table is in fuel use. Excluding gas oil, we have managed to reduce emissions by around 2,500 tonnes of CO2. This would be equivalent to around a 17% reduction in absolute and normalised emissions.”

David Symons, director at environmental and engineering consultancy WSP, agreed: “It’s right to celebrate the high performers, like Skanska and BAM, but also to recognise that many of the high or low scorers could be due to structural changes, such as selling sites and buildings as much as strong energy improvements.

“Taking the anomalies out, the league table shows a mixed picture on energy performance. Most encouraging is that companies show an average 7% improvement in carbon emissions per unit of turnover. Less good news is that only 500 out of the 2000 companies actually reduced their emissions in real terms last year.”

The complete league table, including emissions data for each of the participants, is available on the Environment Agency website, but it will be the last such table. The energy department confirmed at the end of 2012, that the performance league table was to be scrapped in a suite of measures designed to simplify the scheme for participants.

According to Ben Wielgus, lead advisor on the CRC at accountancy giant KPMG (ranked 38th), the loss of the league table will make comparing participants performance more difficult.

“Many will not mourn the passing of the CRC league table. However, it is important to remember that it was one of the first attempts ever to nationally rank more than 2,000 diverse and varied organisations,” he commented.

“Without a league table, the reputational driver from the CRC will be severely diminished and there to be a more varied set of responses to the planned approach of comparing organisations in the scheme based on an intensity measure that they select. This will rely heavily on the industries themselves to do the comparisons.”

Meanwhile IEMA’s policy director, Martin Baxter, reminded firms that they will still have to submit performance data in future and, with the delays to the publication of the league table due to concerns regarding the accuracy of the data reported, asked what the Environment Agency is doing to improve the quality of data.

“Accurate data not only underpins the CRC as an environmental tax and affects how much money companies will pay for their CRC allowances, but also is critical for the reputation of the scheme, and to ensure a level playing field between scheme participants,” he said. “Although there are provisions within the regulations for fines for inaccurately reporting data, what action will the Environment Agency be taking to ensure companies comply?”

Baxter also warned that the CRC scheme continued to fail the business test for long-term policy certainty.

“Setting a carbon price until 2016 for CRC is a step in the right direction in giving business an allowance price against which they can invest in energy efficiency. However, a further review planned for 2016, with the stated intent of removing the tax element, undermines the ability for business to optimise investment for the long-term,” he said.

“We urgently need a long term, consistent policy framework to provide businesses with the confidence to invest in low-carbon and energy-efficient improvements.”