in association with

The carbon-cutter’s
guide 2: Retail industry
From April 2010, UK organisations using large amounts of electricity
will need to comply with the carbon reduction commitment (CRC)
energy efficiency scheme. In the second of a series of case studies,
we explore the options for a typical high-street chain, “Stores R Us”.

The organisation The challenges

Stores R Us has progressively increased its
presence on the high street over the past two
decades. It operates a number of clothing
chains to cater for several markets. The
company also has a food retail chain, which
was a relatively small operation until the
recession. Now its sales figures are starting
illustrations by Russell cobb
impact of its activities on the environment and
the communities it serves. The employees are
aware of this, but their day-to-day focus is on
meeting shorter-term performance targets.
The company spends more than £20m a
year on energy. This is mainly for electricity
and is well over the carbon reduction
As consumers and pressure groups grow
more sophisticated, Stores R Us will have to
show that its actions aren’t mere “greenwash”.
This will also apply to indirect carbon
emissions along its whole supply chain.
The company’s long history of under-
investment in energy management presents

to underpin the profitability and share price
of the whole group. The company’s support
operations include the group HQ, regional
offices, warehousing, logistics and a data
centre for its in-house IT function.
Like many medium-sized and large
retailers, Stores R Us is responding to
mounting consumer pressure to reduce the
commitment (CRC) qualifying threshold of
6,000MWh of half-hourly metered electricity.
But its small central energy team has a
relatively low profile unless power prices are
rocketing. As a result, the team has focused
mostly on energy procurement to keep a lid
on costs rather than on energy management
to control consumption.
problems, too. There is some catching up to
do with basic housekeeping and educating
staff on being more carbon-conscious.
Merchandisers have had a free hand in the
type of lighting used in product displays until
now. Future refits will need to consider low-
carbon alternatives, especially for lighting,
heating, air-conditioning and refrigeration.

18 financial management
Option 1: best practice
The board understands that smart green
initiatives can win over customers and cut
costs, but the directors acknowledge that
they haven’t paid enough attention to
reducing the amount of energy used
throughout the organisation. It’s important
for Stores R Us to approach this
systematically, because short-term gestures
typically fail. Internal energy management
capabilities can be boosted by
implementing the following three measures:
n Give the energy managers better access
to the senior management team. This will
ensure that other functions, such as
warehousing or merchandising, are
receptive to green initiatives that fall into
their areas of responsibility. It will also give
the energy managers the chance to roll
out basic efficiency models designed for
individual stores across the company.
Option 2: on-a-budget response
Stores R Us should focus on maximising
staff engagement: the employees’ skills
could help to meet its energy reduction
targets. Because the energy management
team is small, other functions will have to
play a greater role in this exercise. If the
recruitment of energy managers is not an
option, existing employees should be trained
Option 3: the bare minimum
Inaction is not an option. Fines are possible
and the company’s reputation is at risk.
Stores R Us must at least give operational
and administrative responsibility to one
team, which can focus on carbon reporting.
Considering the company’s record in
energy management, simply gathering a
site list and compiling a CRC carbon profile
Further information
See the user guide at www.decc.gov.uk or
www.defra.gov.uk, or visit www.edfenergy.com/crc.
For more guidance on energy efficiency from
CIMA, visit www.cimaglobal.com/sustainability.
n Engage expertise to investigate
energy-heavy processes and recruit
more energy managers to enable a
more comprehensive analysis of
energy-saving opportunities.
n Ensure that the energy management
team is made aware of planned store
openings, expansions or closures well in
advance, so it can effectively forecast the
company’s total energy use and
purchase the correct amount of CRC
emissions allowances. This will reduce
the risks of being penalised for having
insufficient allowances and of having
excess capital tied up in allowances.
Installing automatic meter reading (AMR)
meters in smaller outlets will help the
company to benefit from the CRC’s early-
action metric and improve the quality of
data for future energy management.
in energy management responsibilities.
Alternatively, staff could be seconded from
other teams to help with the admin and free
up technical experts to work on energy
management activities. The company can
use the money released from the results of
this engagement programme to pay for
energy-efficient equipment and maintenance.
for each fuel used will be tough. The board
must ensure that the team knows about
any changes to the group’s portfolio of
businesses and sites. This will reduce the
likelihood of fines for late or inaccurate
reporting and prevent the company from
being named and shamed when the CRC
performance league tables are published.
This is a good time for the
company to review its monitoring
and targeting software. Ideally, it
should consider investing in building
management systems to improve the
control of energy usage in stores. By
controlling shut-down times, such systems
will remove the likelihood that equipment is
left switched on while no one is using it.
In general, it’s important to build energy
efficiency into maintenance schedules so
that engineers can ensure that settings are
optimised for maximum efficiency.
Significant energy savings can be made by
configuring the server room to improve
cooling and ventilation, for example.
These activities should put Stores R Us
on a cycle of high performance, where the
rewards from previous activities make future
gains technically and financially possible.
The AMR metering installation
should still go ahead, because it
costs relatively little and provides
essential data for future energy
initiatives. The company should also
balance the amount of renewable energy
bought from the grid against funds for
energy reduction.
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