A. The Carbon Trust Standard is two years old – we launched it in June 2008. It’s been very successful; over 400 organisations have achieved it, but relatively few are SMEs. We’ve always wanted a set of rules and certification that are open to anyone in the market, but in order to make it more cost effective and streamlined to
SMEs, we had to learn from experience, we had to find out what the challenges, issues and common problems in any certification were, and we’ve only just managed to work out how best to streamline it for small companies.
Q. Why haven’t you launched it sooner?
A. We’ve only been doing this for two years and this is the next phase in our development. In terms of the market, the need for SMEs to demonstrate good carbon performance is growing because of increasing energy prices, increasing supply chain pressure from multinationals and increasing expectation that SMEs might be covered by
legislation.
If you had tried to have this conversation with SMEs a year ago they would have said they were trying to ride out the economic downturn. Now is a great moment to plan for a more secure future.
Q. What do SMEs need to have to have done first before applying for the Carbon Trust Standard?
A. For small companies on their first certification, they need to provide one year’s worth of data, so they need to have attained good carbon management practice, an environmental policy that mentions carbon and energy, trained their staff, and taken practical action –
energy efficient equipment, these types of things. If they’ve done nothing to date, they will need to put in place that plan first. That rule has been there for last two years and remains unchanged.
Q. Who have worked with on devising this tool?
A. We’ve been working with our customers. We’ve also done quite a lot of market research about issues in this space. On the software we’ve been working with a company called Salesforce. We designed a bespoke tool because none of the carbon calculators already out there could do the carbon reporting in quite the way we needed to.
Q. Rightly or wrongly, the Carbon Trust is seen as working with big business. How are you going to sell this to SMEs?
A. That may be the popular viewpoint, but we’ve actually done a huge amount of work with SMEs – through our advice line, our interest-free loans, and our publication library and through engagement. Having said that we do recognise we need to spread the word of carbon reduction through our other networks, so we working with trade bodies like the FSB (Federation of Small Business), but also larger companies that have an established relationship with supply base and customer base. And also we’ll be doing our best to reach out through the media as well.
Q. SMEs are responsible for 45 per cent of UK business energy use and, according to your own figures, could make bigger savings than large organisations by acting on reducing their usage and carbon emissions. But they haven’t done much about it yet? Why has the SME take up been so poor and what makes you think they will do now you’ve launched your service? After all there is no mandatory requirement.
A. One of the challenges is that energy is not a big proportion of an SME's cost base. Collectively, it’s very important, but it is not at the top of the mind for UK businesses, compared to winning the next customer and growing revenues. That is always a barrier, which is why we are keen to talk to small businesses about the benefits of carbon reduction, not purely as cost saving – although that is important – but for them to see the bigger picture. They need to be increasingly environmentally aware and environmental reputation endorsed by a third party is a route to selling more, being a successful business and growing your pipeline. Businesses can get much more excited about that then if you only tell them that they can cut 20 per cent off a £500 energy bill.
Q. How does the online service help you do that?
A. The tool is very much about guiding you through the process to provide evidence of your
carbon reduction. It asks a logical set of questions to make it easier to understand in a language that is not too technical. You can complete it on the move, in the evening, so there is a lot of convenience there.
There are three phases to the service: the application phase, when you use the tool to complete data; the assessment and certification phase, when we look at the evidence and cross check and call up and take a certification position; and then there is a final phase – the communications phase where we help companies announce their achievement. That phase is included in the cost, but is 'light touch’.
And then there is a final step when you repeat the process two years later, when we recertify to show a company is continuing to reduce its emissions.
Q. What will SMEs get out of using the service and gaining certification?
A. We find different companies see different benefits. Some are driven by simple concerns about reducing their costs, others by climate change and wanting to do their bit. Others see environmental reputation is core to them. For some, it’s all three.
Q. You describe the service as simpler than your original assessment and certification service – in what way is it?
A. It is very important to note the rules of certification have not changed. The certification is the same and the assessment criteria is the same. What we’ve changed is the process – the online allows companies to provide information with less input from us and we can access that information in a more structured format, which makes its easier then for us.
Q. If that is the case, why don’t you make it available for all companies to use – whatever their size?
A. The tool has some limitations, which means it can’t cope with some of the complexities of large companies. However, as we get better and move forward we may be able to expand its remit further down the line.
Q. Cost is always a barrier to many SMEs when it comes to this kind of investment – why have you not offered this as part of your free services?
A. The Carbon Trust offers some services free or part funded, but the Carbon Trust Standard is not one of those. It is important to make sure that Government money is spent only on that which can only be funded by the public purse – technology and innovation, free advice line, for example. There are clear business benefits to gaining the standard and as such organisations should pay for the service.
Q. The Carbon Trust Standard is a recognised brand of quality – do you not run the risk of diminishing that credibility by making it too easy to gain accreditation?
A. I don’t agree with the question. The rules remain the same. We are not making it easier, but more efficient.
It is essential for the ongoing success of the standard to maintain its quality, and we have a commitment to maintain that with the new service. Having said that, large companies are telling us that they want to get SMEs involved – they are saying "we really see the need to engage smaller companies in the supply chain". This is an appropriate step to take.
Q. One of the conditions of the Carbon Trust Standard certification is for a business to show it is making continual carbon emissions reductions – for very small companies it may be hard to demonstrate that. How can you address that?
A. It is a question that affects big companies as well as small companies. The Carbon Trust Standard is designed as a continual improvement process. The UK is committed to cutting its carbon by 80 per cent by 2050, so we need to continually find opportunities to reduce our carbon. There may be some circumstances where companies are way down that journey, but still need to find that reduction, however small.
The Carbon Trust Standard is leading globally, so we don’t have all the answers and we are committed to improving it as we hit issues. One of the questions as we move forward through recertification, will be how do you distinguish when an organisation has cut back to the bare bones.
Q. As we all know, the Government is expected to make big cuts to quangos in the spending review – why should SMEs feel confident that the Carbon Trust will be around to help them in the future?
A. The Carbon Trust Standard’s future success is working with businesses and businesses feeling that we do a good service – and we’re delighted we are working very rapidly towards that.
I don’t know what the Spending Review is going to throw up, but we've always been about working with the private sector and that is very much in tune with the way Government is thinking about the green economy. So I am very confident about the future success of Carbon Trust and the Carbon Trust Standard. The key thing is we’ve got a very successful programme and one the Government is confident in.
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