Energy

Commentary

Background Energy consumption is a major contributor to pollution and a range of environmental problems. Carbon dioxide (CO2) is the primary agent of global climate change. Sulphur dioxide (SO2) is the principal contributor to acid rain. Nitrogen oxides (NOx) contribute to acid rain, global warming and respiratory ailments. Volatile organic compounds (VOCs) have been linked to health problems, such as cancer. More than 50% of the UK's energy use is associated with building occupancy and use.

Context The bank first reported its energy use in 1997, and began purchasing renewable electricity in 1998. CIS first reported energy use for main offices in 2000, and extended reporting to all sites in 2002. Renewable electricity was first purchased for CIS in 2001.

Carbon dioxide emissions - Bank As a result of the increased use of renewable electricity, the bank's net emissions of CO2 have decreased by 87% compared with a 1997 baseline. CO2 emissions per customer account have decreased by 91% over the same period. The 48.5 hectares of new planting undertaken at the bank's community woodlands since 1997 are considered to offset 289 tonnes of CO2 per annum.i In addition, in 2003 the bank offset 17,131 tonnes of CO2 on behalf of its mortgage customers via Climate Care. Also during 2003, smile, the internet bank, promoted ecotricity's ii renewable electricity to its customers. Details of smile's partnership with ecotricity can be found here.
Carbon dioxide emissions - CIS During 2003, increased use of renewable electricity led to a 52% decrease in net emissions of CO2. A key factor in this reduction was the replacement of combined heat and power (CHP) based generation sources with electricity from wind and hydroelectric sources.

Other emissions to air In 2003, CFS actively managed a shift in the balance of its renewable energy portfolio. There was a shift from 'mid green' technologies, such as CHP and landfill gas, to cleaner technologies, such as wind and hydroelectric sources.
Other emissions to air - Bank Emissions of Sulphur dioxide (SO2), Nitrogen oxides (NOx), particulates and volatile organic compounds (VOCs) reduced by 48%, 74%, 80% and 83% respectively, compared with 2002. Compared with 1997, emissions of SO2, NOx and particulates have reduced by 97%, 78% and 85% respectively. Emissions of VOCs have increased from 0.76 tonnes to 3.6 tonnes due to an increased usage of landfill gas generation.
Other emissions to air - CIS During 2003, emissions of SO2, NOx and particulates reduced by 92%, 61% and 80% respectively. Emissions of VOCs increased from 1.79 tonnes to 2.9 tonnes, due to the increased utilisation of landfill gas in the early part of 2003.
 By the end of 2003, the bank had achieved the UK Government's 'Making a Corporate Commitment 2' target for emissions of SO2 and NOx. Due to the use of landfill gas, the VOCs target has not yet been achieved. CIS also achieved equivalent reductions in SO2 and NOx.

Energy usage - Bank During 2003, energy consumption across the bank decreased by 2.2%. There was a 3.2% decrease in electricity usage and a 0.4% decrease in gas usage. The decrease in electricity consumption may indicate a slight eco-efficiency improvement, as degree day analysis would suggest a requirement for increased electrical cooling during 2003. Degree day data analysis takes account of the impact of weather on energy consumption. For example, a particularly hot summer or cold winter can have significant impact on energy consumption, via the requirement for increased enhanced air conditioning and heating, respectively.
Energy usage - CIS During 2003, energy consumption across CIS decreased by 10%. There was an 11.6% decrease in electricity usage, largely due to the vacation of less energy-efficient premises. The 7.8% decrease in gas usage masks a 15% increase at Miller St, Manchester. This increase is predominantly a consequence of later working practices and associated heating requirements.

Electricity In total, 97% of electricity purchased by CFS for business accommodation is now derived from renewable sources, placing CFS amongst Europe's ten largest business purchasers of renewable electricity. During 2003, all but one of CFS' 223 metered premises sourced electricity from renewable energy producers (the exception was Guernsey Branch, where a suitable supplier could not be identified). Renewable electricity supply was provided by ecotricity, Good Energy, Scottish & Southern Energy plc, the Community Energy Trading Ltd and Energia. Generation technologies utilised include hydroelectric, wind, biomass, CHP and landfill gas. The only remaining locations where CFS consumes fossil fuel generated electricity are sites where utilities are selected by the landlord. To find out more about CFS' selection criteria for electricity, see the website.iii

Integrated generation CFS is exploring proposals that would integrate renewable electricity generation into the fabric of two of its main office buildings. At Portland St, Manchester, consideration is being given to small scale, building mounted wind turbines. At Miller St, Manchester, a solar project is being developed. This would re-clad the Grade II listed building in photovoltaic panels,iv rather than the standard solutions of granite or steel. If progressed, this would create the largest building-integrated solar façade in Europe, and the largest array retrofitted to an existing building in the world.

Investment property - CIS In 2003, CIS became the first institutional property investor to transfer all contracts for its £2.2 billion investment property portfolio to green electricity, some 10 GWh during 2003. Still the only institutional property investor to do this, CIS purchases electricity from large scale hydro and Climate Change Levy exempt sources. In September 2003, CIS sponsored INREB's sustainable building design competition. This year, entrants were invited to design a hypothetical low energy mixed use development adjacent to Miller Street, Manchester. The winning designs can be viewed on INREB's website.v
 By comparison, according to their Sustainability Report 2002, at Credit Suisse Group, energy-related CO2 emissions per employee amount to 0.837 tonnes (cf. 0.45 tonnes across CFS).

Sustainability value analysis

• Compared to the cheapest alternative offer, the annualised additional cost across CFS of 'green' electricity is £192,600.
• The annual cost of energy monitoring activities across CFS, including third party contracts, is £39,500.
• Since 1997, consumption of energy at the bank has reduced by 1.99 GWh. This has contributed to an annualised saving of £69,700.

Influence and action

Renewable Obligation Certification scheme During 2003, CFS appealed directly to senior government ministers - such as Stephen Timms, Energy Minister and Elliot Morley, Environment Minister - for an extension beyond 2010 of the 'Renewable Obligation Certification scheme' (ROCs). This scheme underpins the Government's economic framework for supporting renewable energy generation. In December 2003, CFS received confirmation that the ROCs scheme would be extended to 2015.

Carbon Disclosure Project In 2003, the bank signed up to the Carbon Disclosure Project;vi  following CIS, who were amongst the first signatories to the project in October 2001. During 2003, the members included institutional investors with a total of $9 trillion dollars of funds under management. Using this influence, the group wrote to the top 500 global companies, encouraging them to identify and quantify the business implications of their exposure to climate-related risks and to report on any actions they are taking to mitigate the risk. In 2004, efforts continue to pursue those companies who have failed to respond to the challenge.

i Conversion factors supplied by the Tyndall Centre for Climate Change Research.
ii www.ecotricity.co.uk
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iii www.cfs.co.uk/sustainability2003/additional/energy
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iv Photovoltaic panels convert light energy into electrical energy.
v www.inreb.org
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vi www.cdproject.net
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