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Financial incentive. The Government is making available up to
£215 million over 5 years for firms who voluntarily take on emission reduction
targets for greenhouse gases. This equates to c.£30 million per year after
corporation tax. Any one firm can receive a maximum of 10% of the incentive
monies. Additionally, reducing emissions often means improving energy
efficiency. This, in turn, can result in lower costs.
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Company strategy. There are gains from 'learning-by-doing'. The
Kyoto Protocol envisages global trading in greenhouse gas emissions from 2008.
Such trading is likely to become an important risk management tool for firms.
This voluntary scheme allows companies with UK operations to develop trading
expertise in advance of markets opening up.
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Company reputation. Climate change is a mainstream political
issue, and this is a major environmental initiative. Firms that participate and
meet their targets will be able to demonstrate that they are part of an
innovative and widely publicised scheme to tackle climate change.
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