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"

Financial Management (UK), November-December 2009 | Go to article overview

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"


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The organisation

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 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 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 [pounds sterling] a year on energy. This is mainly for electricity and is well over the carbon reduction 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.

The challenges

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 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.

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:

* 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.

* Engage expertise to investigate energy-heavy processes and recruit more energy managers to enable a more comprehensive analysis of energy-saving opportunities.

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* 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. …

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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"
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