Corporate cash for carbon cuts

The UK’s new Carbon Reporting Framework will make it easier for businesses to fund local low-carbon projects.

A swimming pool in Newcastle could soon be heated by solar power, thanks to a new scheme that helps companies invest in local communities.

The pool, which first opened in 1938, was recently saved from closure by a group representing schools, residents and health providers. Now, the Fenham Swimming Project wants to invest in solar thermal, which would make a huge difference to energy bills, as well as cutting carbon. But first they have to meet the hefty capital costs.

Couldn’t they raise the money from businesses who want to fund carbon reductions to balance out their own unavoidable emissions – and benefit the local community, too?

Until recently, the answer would have been ‘No’. Why? Because, before the launch of the UK Carbon Reporting Framework (CRF) in September, the only credible way for a business to account for ‘externalised’ carbon reductions was through accredited offset schemes. And, for good reasons, many worthy UK projects – including the Fenham pool – do not qualify.

Offsets rely on the guarantee that no two investors are paying to cut the same tonne of carbon, through the same project. To ensure this is the case, projects must be able to give simple and transparent information about their impact. But many small-scale local schemes simply don’t have the sophisticated accounting skills to guarantee that a particular sum of money will prevent the emission of a particular tonne of carbon.

It makes for a frustrating stalemate, both for businesses wanting to support their local community, and for non-profits trying to get their plans off the ground. The CRF was launched to address just these issues. It has been developed by a partnership of the Building Research Establishment, Forum for the Future, British Airways (BA) and Deloitte, with technical support from the consultants Sustain.

It offers clear guidelines to help projects account for benefits in three key areas: woodland creation, domestic energy efficiency and renewable energy generation. The information covers carbon cuts, as well as broader environmental and social benefits. Significantly, these are all balanced against the investment required by the project. The CRF allows supporters to identify projects that resonate and align with their priorities and strategy.

It must be emphasised, though, that no one should invest in projects listed on the CRF under the illusion that they can claim full credit for making it happen, or that their own carbon footprint is reduced as a result. What they can do is use the CRF as part of a holistic carbon management plan, in which the first step should always be to manage and reduce their direct emissions.

The investment in renewable energy for Newcastle’s community-run pool will be funded by BA’s One Destination Carbon Fund. As Michael Lee of the Fenham Swimming Project puts it, “It’s not just giving to this pool today, but it’s giving to us tomorrow and the day after…”

Ben Ross specialises in energy at Forum for the Future.

Photo: David De Lossy/Digital Vision/Thinkstock