Finance

Every organisation should become carbon literate, carbon numerate and ensure appropriate investment to meet the commitments required to become part of a low carbon NHS and in preparation for a carbon tax regime. Partnership working will be required to deliver appropriate incentives, economies and training to support this shift in culture and for the local economy.

NHS organisations should develop carbon literacy and embed carbon reduction in their financial mechanisms. The financial system supporting the NHS needs to be updated to ensure that capital can be funded to take advantage of the longer term gains of innovative and truly sustainable and low carbon projects. Private Finance Initiatives (PFIs) must be able to demonstrate long term low carbon performance and sustainability.

The consultation on the draft Carbon Reduction Strategy showed strong support for ensuring carbon reduction is integral to all financial and economic decision making in the NHS. This view is supported by the UK Government whose Advisory Committee on Climate Change have set out three carbon budgets for the UK which “will take their place alongside financial budgets, and become pivotal to policy decisions in the UK”. This means that organisations will need to develop understanding of carbon and how it can be used as a tax regime or currency.

Business Case

For every 1% reduction in energy consumption, at 2008 prices, it is estimated the NHS could save about £4 million every year. This means that many investments in adequate energy management are likely to be cost effective. Therefore, NHS organisations should take advantage of schemes which support investment in energy efficiency initiatives. For example, NHS Foundation Trusts can double any financial commitment made to energy efficiency by setting up a fund under Salix Finance.

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Carbon Accounting

Carbon accounting is the accounting undertaken to measure the amount of carbon dioxide equivalents that will not be released into the atmosphere as a result of Flexible Mechanisms projects under the Kyoto Treaty. As carbon reduction and the cost of carbon emissions becomes more integrated into all organisational systems, carbon accounting will play a vital role in purchasing, commissioning, service delivery and estates development. 

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