The following report results from research commissioned recently by Siemens Financial Services among a representative sample of senior directors at over 600 UK firms. Respondents were asked about their motivations for investing in low emission technology, as well as their views on the obstacles to such investments.

A rapid move to a low carbon green economy is increasingly recognized as imperative for future British competitiveness in a carbon constrained world. Over the last two years, we have seen unprecedented growth in awareness and concern about climate change in the UK. Now the debate is progressing to consider the most effective ways to address this major challenge and to monitor progress.

Although the task sounds daunting, it is interesting to note that over a quarter of firms are already measuring their carbon footprint. Similarly, it is a good start that more than two in every five firms have implemented carbon emission reduction rules.

Interesting findings

The research exercise revealed a number of interesting facts:

• A majority of companies measure some emission relevant factors - power consumption (54 per cent) and employee mileage (61 per cent) - but only because they have an immediate impact on costs.
• However, a minority (26 per cent) also measure their overall carbon footprint.
• Some 41 per cent of British firms have implemented carbon emission reduction rules, and 37 per cent have invested in low carbon/energy-efficient business equipment.
• For investment in this type of equipment to grow, 57 per cent of firms say that the running costs must be the same or lower than standard equipment.
• Higher costs, lack of a clear return-on-investment (ROI) and limited product range are seen as principal obstacles to growth in low carbon/energy-efficient equipment investment.
• A quarter of British businesses say they simply do not have the capital to replace existing equipment with environmentally friendly alternatives.
• Competitive pricing, greater availability of integrated financing options, and more widely applicable tax incentives are seen as critical to encouraging greater investment in environmentally friendly business equipment.

In practical terms, there are two key initiatives that companies can take to reduce carbon emissions, and therefore their contribution to global warming. Firstly, they can introduce internal disciplines to ensure that both organisation and staff reduce wastage, be it energy, water or consumables. Secondly, they can re-invest in new plant, equipment and IT that are specifically designed to be more energy efficient and/or emit lower levels of greenhouse gases. Dr Garry Felgate, a Director of the government-funded Carbon Trust, says that many companies could cut energy use by 30 per cent. He also highlights the need to buy more efficient equipment - for instance, modern compressed air machinery can be as much as 40 per cent more efficient than older models.

However, a significant proportion of businesses do not take climate change seriously. Of those who do, there is little or no evidence available measuring the level of positive action taken by the business community so far.

It was in order to gain a greater understanding of British businesses' attitudes and behavior towards environmentally friendly equipment investment, that Siemens Financial Services commissioned the research among a representative sample of over 600 firms. The research sample sought representation from small (11-49 employees), medium sized (50-249 employees) and large (250+ employees) companies. Respondents were canvassed on three main issues: whether they monitored and measured aspects of their carbon emissions; what initiatives they had taken to reduce emissions; and what they saw as the obstacles to investing in environmentally friendly equipment upgrades.

Measuring emissions

In terms of measurement, survey respondents firmly indicated that the majority remained focused on practical metrics with a clear financial implication, i.e. an almost immediate and easily definable return, for the firm, including employee mileage (61 per cent) and power consumption (54 per cent). The proportion of companies measuring their specific carbon footprint was very much in the minority, although the one-in-four proportion could be viewed as highly encouraging. The encouraging picture to emerge is that the most widely monitored metrics both address the most significant and containable areas of carbon emission - namely transport and equipment energy consumption. It is a moot point as to whether huge amounts of effort should go into encouraging a greater proportion of firms to invest in sophisticated carbon footprint measurement, or whether the existing metrics should first be harnessed and specific environmental initiatives associated with them for majority uptake.

Interestingly, carbon footprint measurement varies widely between different business sectors, with some industries turning in figures as low as 10-15 per cent (Education, Manufacturing, and Hospitality). At the other end of the scale, high proportions measure overall carbon footprint in Aerospace (78 per cent) and Publishing (57 per cent).

Uptake of emission reduction initiatives was shown still to be a minority affair. Two in every five firms approached had implemented carbon reduction rules among their workforce and operations. Some 37 per cent claimed to have had invested in low carbon equipment - an encouraging proportion, but unquantified.

A quarter of firms have established a carbon emission reduction target (although the targets themselves might be relatively modest, thereby leading to question the desire to really improve) and just over a fifth of organisations had imposed low carbon standards on their suppliers. Analysis of the raw research data reveals that firms tend either to have a full set of carbon emission reduction initiatives in place or none at all.

Part Two of this report appears next month and will include the perceived obstacles to carbon footprinting, plus tax concessions, finance methods and the need for inducements.

Action plans could help businesses save £1.4bn this year, says Carbon Trust

UK businesses could save £1.4 billion and more than 11 million tonnes of CO2 in 2008 through implementing simple low or no-cost energy efficiency measures included in the Carbon Trust's New Year business action plan, which are said to be quick and easy to put in place and can result in both cost and carbon benefits for businesses.

Tom Delay, Chief Executive of the Carbon Trust said: "Reducing your carbon footprint through improved energy efficiency should be a top priority for any company in 2008. Our six steps show that putting energy efficiency and carbon saving into action couldn't be easier and switching off lights, turning down the heating and turning off equipment when not in use can save businesses an average of more than 10 per cent on their energy bills."

To start making savings today, the Carbon Trust recommends every business should:

Measure your company's carbon footprint - the essential first step to help your organisation benchmark progress. Visit www.carbontrust.co.uk/footprintcalculator to view the Carbon Trust's carbon footprint calculator.

Replace inefficient lights - changing tungsten light bulbs with compact fluorescent lamps will save 75 per cent of energy used for lighting.

Switch off PCs - Switching off just one PC out of hours, instead of leaving it on 24 hours a day, will save £35 a year.

Switch off all non essential equipment - A typical office for one night will save enough energy to run a small car for 100 miles.

Reduce heating - lowering the temperature by just one degree would reduce the heating bill for a typical office by up to 8 per cent a year and save enough energy to print over 40million sheets of A4 paper.

Fit timers - Seven-day timers fitted to water coolers, vending machines and gaming machines can reduce energy consumption by up to 70 per cent.

The Carbon Trust is a private company set up by government in response to the threat of climate change, to accelerate the move to a low carbon economy by developing commercial low carbon technologies and helping organisations reduce their carbon emissions. The Trust works with UK business and the public sector through its work in five complementary areas: insights, solutions, innovations, enterprises and investments. Together these help to explain, deliver, develop, create and finance low carbon enterprise.

www.carbontrust.co.uk/energy

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