DESPITE the challenging market, businesses are set for another upheaval over the coming months as they try to get to grips with the Government’s Carbon Reduction Commitment (CRC).

The new legislation, expected to come into force next April, will be mandatory for companies with annual UK electricity bills over £500,000 and is likely to impact on both cash flow and reputation.

This week, businesses will be receiving qualification packs to help them identify whether they will be affected by the scheme and what steps need to be taken before the deadline next year.

This includes appointing a director to be responsible for communicating the information to the CRC and establishing an auditable carbon reporting system.

Once this is in place, organisations will be required to purchase carbon allowances based on their energy consumption.

Unfortunately, there are a number of challenges associated with the Carbon Reduction Commitment that are likely to impact on a business.

For example, careful protection of a company’s reputation needs to be considered as the Government plans to publicise a performance league table once the scheme is up and running.

In addition, there are a number of challenges in terms of cash flow and profitability so any business affected needs to ensure that they comply with the regulations in the most cost-effective manner, and minimise cost and growing revenues by delivering cost-effective energy savings.

Obviously, the long-term benefit of the Carbon Reduction Commitment means the UK will be actively reducing its carbon footprint and protecting the environment for future generations but for businesses being audited by the scheme, there are some huge hurdles to overcome, not least beginning to understand the complexities of yet another tier of administration.