Senior executives across the private and public sectors are keen to see the government reform the controversial Carbon Reduction Commitment (CRC), but are divided on what form those reforms should take and whether the scheme should be scrapped altogether.

That is the conclusion of a survey of BusinessGreen readers undertaken in association with Global Action Plan and sustainability reporting software firm CloudApps, which found that while over 70 per cent of organisations believe the scheme poses too high an administrative burden on participants, a clear majority reported the scheme did result in their organisation embracing best practices, such as improved emissions reporting and the installation of advanced energy meters.

The CRC has been widely condemned by business groups, including the CBI, ever since Chancellor George Osborne announced in late 2010 that the government intended to turn the scheme into a carbon tax by scrapping a planned element that would have provided financial incentives to those organisations that delivered the biggest improvements in energy efficiency.

Responding to the criticism in this year’s Budget, Osborne promised to either reform the CRC or replace it with an alternative environmental tax.

“The Carbon Reduction Commitment was established by the previous government,” he said. “It is cumbersome, bureaucratic and imposes unnecessary cost on business. So we will seek major savings in the administrative cost of the Commitment for business. If those cannot be found, I will bring forward proposals this autumn to replace the revenues with an alternative environmental tax.”

The Department of Energy and Climate Change (DECC) is currently consulting on proposed reforms to the scheme designed to reduce its administrative burden and a decision is expected in the autumn on whether the CRC will be revised or scrapped.

The new survey of over 100 executives involved in compliance with the CRC reveals widespread frustration with the current scheme, with over 70 per cent of respondents highlighting the “high administrative burden on participants” as their dominant perception of the scheme.

Moreover, four out of five respondents said the CRC’s league table ranking organisations’ energy efficiency performance had no impact on their plans, while a majority indicated that energy efficiency measures would have taken place without the CRC and around 40 per cent said that compliance with the legislation had diverted resources away from other sustainability initiatives.

However, the survey also revealed the CRC has delivered on several of its stated goals. For example, over 90 per cent of respondents said senior executives are now aware of the scheme and the need to address energy efficiency. Meanwhile, over 60 per cent said that in response to the CRC they had either launched employee engagement initiatives to cut emissions, had taken concrete steps to improve energy efficiency, or installed automatic metering technology.

Between 60 and 85 per cent of respondents insisted they would have taken steps to improve energy efficiency regardless of the CRC, although one industry source expressed incredulity that businesses would have universally embraced emissions reporting without regulations.

Significantly, when asked about the future of carbon legislation over 60 per cent highlighted energy cost savings as the main motivating factor likely to encourage emission reductions, while over 20 per cent said the purchasing of carbon allowances was the most effective driver, suggesting that combined over 80 per cent of respondents regard emission and energy-related financial pressures as the factor most likely to motivate carbon cuts.

Writing on BusinessGreen today, Trewin Restorick, chief executive of Global Action Plan, said the survey highlighted the effectiveness of financial mechanisms as a means of driving action to curb emissions.

He also argued that rather than scrap the CRC altogether the government should focus on reforming a scheme that appears to be largely working in order to reduce its administrative burden.

“If the CRC is dropped then senior managers will rightly question what all the effort and cost was for,” he wrote.

“All the businesses Global Action Plan work with want government policy to be consistent and coherent to help them be more sustainable. Dropping the CRC will create doubt and uncertainty about the stickability of any future environmental legislation and will be ultimately damaging to cutting carbon. It certainly isn’t a brilliant piece of policy and the communications around it have been dreadfully handled, but keeping a simplified version is probably the least worst option at the moment.”

However, other groups such as the CBI are maintaining that the scheme should now be scrapped and replaced with mandatory carbon reporting rules and an extension of existing carbon taxes, potentially through the Climate Change Levy.

Peter Grant, chief executive of sustainability software specialist CloudApps, which has worked with companies such as AMEC and LA Fitness on their CRC compliance, said that regardless of the future of the scheme, businesses were under growing pressure to track and reduce their energy use and carbon emissions.

“The CRC is undoubtedly unpopular, however, this research proves good things can come from asking people to consider their actions,” he said. “It is easy to say, after the event, “I would have done it anyway”, as many here have claimed, but we know form working with our clients that [CRC compliance] has promoted positive changes in business practices that have led to very real cost savings.”