Intellect survey shows ICT businesses diverge on CRC views

The Carbon Reduction Commitment (CRC) Energy Efficiency Scheme is providing new business opportunities for software and services companies but companies that are obliged under CRC are concerned about reputational damage from the league table and the cost and complexity of compliance, according to an survey of ICT companies conducted by Intellect and its partner Cambium.

The survey, which was conducted in two parts, has highlighted two distinct reactions from the ICT industry to the CRC legislation.  For instance, sub-sectors experiencing rapid growth, like data centres, perceive the legislation as a significant threat to their UK operations whilst companies delivering services such as carbon accounting believe that the CRC will open up a range of new business opportunities for them.

The survey found that obliged companies were taking the legislation seriously, were well prepared for it and were relatively advanced in terms of monitoring and managing energy use.  However, they expressed major concerns about uncertainty and cost burdens arising from the legislation.  Respondents also expressed concern about negative impacts on business planning, the potential for reputational damage from the league table, the cost of compliance and the complexity of the legislation.

For suppliers to those obliged under CRC, the majority felt that the CRC would generate new business opportunities for them although they were uncertain of the size of the market.  Over half were confident that the CRC would drive new sales in the next 18 months.  However, only a minority had a fully formed solution ready and many reported a skills shortage in this area. 

Intellect’s Head of Climate Change Programmes, Emma Fryer, said the survey showed that many IT companies see the CRC as a threat to business growth.  “They are also concerned about the uncertainty that this legislation is generating which many feel is undermining business planning.  Whilst there is good news for companies that will provide services to help others comply, this itself is perceived by many as evidence that the CRC is over complex and is creating s a supply chain of service and consultancy that adds further costs to doing business in the UK.

“Climate change legislation has a tricky path to follow: leading-edge policy can actually give UK companies competitive advantage by driving the development of tools, skills and supply chains which can then be applied in other regions as they adopt similar policies.  On the other hand, if other regions fail to follow suit or if the legislation is perceived as too cumbersome, too costly or too risky, UK ICT companies will suffer and inward investors will simply take their business elsewhere.  They will do so because they can:- digital data is probably  the most mobile commodity in existence.”

Tony O’Donnell, a Partner at Cambium said the survey that ICT suppliers are waking up to the fact that the CRC Energy Efficiency Scheme (CRC) will catalyse significant new sales prospects within the UK’s largest organisations, who are now becoming more focused upon their use of energy in response to the legislation.

“Cambium’s own experience in the market confirms the survey’s findings that IT suppliers are actively seeking to understand the CRC legislation, reposition their Products and Services and to form new partnerships so that they can benefit from this new opportunity.

“Given the negative economic impact of the anticipated Government spending cuts, technology companies are proactively seeking out alternative new markets that will escape these secondary effects.  The drive for greater energy efficiency and associated cost savings created by the CRC means that this emerging market will be buffered from these headwinds in the next 18 months.”

For more information on Cambium, visit http://www.cambiumllp.com/are-you-ready-for-crc/

 

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