Sally is Director of the Business Programme of sustainability charity Forum for the Future, working with business partners across all sectors get to grips with sustainability. She is very interested in helping the business community realise the opportunity agenda presented by sustainable development and assisting the retail, construction, transport and financial services sectors tackle sustainability and is keen to demonstrate the competitive advantages of leadership on this agenda. She has been appointed by HRH Prince of Wales as advisor to Duchy Originals, is an independent advisor to The Carbon Neutral Company, acts as the independent chair for Land Rover's carbon offset scheme and is a member of the Carbon Trust's Technical Advisory Group.

What are you working on now?

"In relation to climate change, there are three main strands to my work. First up, carbon management strategies for a few of our business partners which use our climate change challenge to encourage a strategic assessment of the risks and opportunities associated with climate change - focusing on the opportunities - this then can lead to innovation for new, low carbon goods and services. I'm also involved in a number of research projects investigating different aspects of climate change, including a joint project with the US NGO, Clean Air Cool Planet, where we are attempting to provide the definitive guide to carbon neutrality. Lastly, we don't believe all customer-facing carbon offset schemes are evil, and I chair the Independent Governance Committee for Land Rover's carbon offset programme. This is a really interesting attempt to engage the luxury end of the market with the challenge of climate change."

What does FftF do that no other UK organisation is doing?

"We work across the whole suite of sustainable development issues. While climate change is an urgent issue, requiring urgent action, it's really important that we don't lose sight of the other environmental and social challenges we need to tackle. Not least, without a sustainable development focus, action on one issue can lead to some serious unintended consequences elsewhere. For example, concentrating solely on carbon emissions from air miles associated with imports of the humble Kenyan green bean could lead to action to halt sourcing that particular product from that particular region. But what about the economic and social benefits which that western investment brings?

"We also work in long-term trust-based partnerships, many of our business partners have now been working with us for over 10 years. And importantly, we try and demonstrate our impact through our transformation index and targets. This is how we discover whether or not our influence led to hot air or a more sustainable product and service - happily we're seeing less of the former, more of the latter!"

What are your proudest personal achievements at FftF?

"Tesco CEO Terry Leahy, in January 2007, announcing Tesco's plans to tackle climate change. We played a significant role in helping Tesco understand that green consumerism for the masses wasn't such a bad idea and that it could use its clout to get serious about climate change.

"I'm also proud of many of our other business partners in either adopting tough carbon reduction targets, for example Cadbury Schweppes in their Purple Goes Green initiative, or even better, when a new product or service makes it to market. DTZ, the global property firm, recently blazed a trail with their Sustento fund, encouraging investment in low carbon property and Royal & Sun Alliance, another partner, took the lead with linking costs of insurance products with consumers' carbon credentials.

"And it's not just new products, tackling climate change is about taking some existing stuff off our shelves. I was delighted to see B&Q announcing last week that once it has sold its current stock of patio heaters, that will be it. We have been working with Kingfisher, who own B&Q on a sustainability strategy. We can't take sole credit for stamping out these monstrosities, but we played an important role."

What is most difficult about your job and how do you deal with its challenges?

"There is still an on-going conflict between short term profit maximisation and investment in more sustainable goods and services. The only way round this one is to have a clear strategy for profit maxmisation which recognises the links between financial sustainability and environmental and social challenges. In other words be clear that sustainability is a route to profitability.

"But we don't live in a perfect world, and we don't yet have a truly sustainable business. Which means it is difficult for us when one of our partners, who might be doing great things in one part of a huge business, does something in a different part of the business which can only be described as a step backwards. We then have to look hard at our relationship and decide whether or not we have sufficient influence to try and stop sustainability sideways slips in the future."

In which ways are UK businesses leading the way in mitigating the effects of climate change and in which ways are they lagging behind?

"UK businesses are leading the way in adopting climate change targets which go one better than government policy, in investing in alternative forms of energy and in trying to take climate change to the consumer, either through on-pack information (such as carbon labels) or through wider awareness raising campaigns and incentivisation schemes. Many UK businesses are also serious in their efforts to cut carbon down complex and global value chains. And a few heroes are even imagining business models which could succeed in a low carbon economy. Compared to other nations, I think we have very few laggards, mostly leaders."

What does the UK public sector need to do to give a boost its carbon emissions results?

"Have a clear strategy, be joined up, stop getting distracted and be accountable."

What emerging energy usage trends do you predict?

"I think we will see more decentralised renewable energy provision as the barriers we currently face in terms of scaling up and price are dealt with by more positive market forces. I really hope that the UK Government doesn't get too distracted by the red herring that is nuclear which is the opposite of sustainable - expensive and dangerous. I think we will also see home owners take much more interest in where and how they power their homes, particularly as the price of carbon intensive fuel from the grid continues to rise."

What would you advise someone taking on your role?

"Be flexible and remember that change takes time. And follow your instinct, 'greenwash' has a nasty smell." What's next on your agenda? "I would love to see US businesses get as excited as their UK counterparts about sustainability (it's beginning to happen) and then we need Chinese business to engage - which given that the environment could be the single issue that derails their economic growth ambitions, isn't so far away."

The Climate Change Bill: Transforming The Business Landscape

Pressure from public opinion will be a significant force pushing businesses towards lower carbon emissions, but it won’t be the only one. New legislation will also shape the way companies are run for many years to come.

A central item of interest is the Climate Change Bill (CCB), which is due to become law in 2008. The CCB lays a general foundation for further legislation, but is also expected to include specific requirements such as an emissions trading scheme for larger businesses, notably the Carbon Reduction Commitment (CRC) which will probably start in or around January 2010.

The legal foundations of a low-carbon economy

The CCB paves the way for trading schemes to be applied across a very broad range of economic activities. These may include any activity which involves the consumption of energy, the use or disposal of materials which consumed energy during production, and the production or supply of anything which subsequently causes or contributes to greenhouse gases by its use, says Michael Woods, a partner at Stephenson Harwood, and also co-chair of Climate Change Working Party of the UK Environmental Law Association.

“In practice, this will allow the Government to target almost all businesses in the UK, who could potentially become subject to mandatory trading schemes similar to the CRC or the EU Emissions Trading Scheme as part of the Government's legally binding target to reduce carbon emissions by 60 per cent from a 1990 baseline by 2050,” he says.

The CRC will be a mandatory emissions trading scheme, designed to help large commercial and public sector organisations make carbon savings of 1.1 million tonnes per year by 2020. The scheme will apply to organisations that have annual electricity consumption in excess of 6,000 megawatt-hours, which at current market prices would affect organisations with annual electricity bills over £500,000. It is expected to cover around 5,000 organisations.

These are likely to include large offices, hotel chains, supermarkets, large retail organisations, hospitals, banks, transport operators, mobile phone mast operators, central government and large local authorities, which collectively account for approximately 10 per cent of the UK's carbon emissions,” says Woods. “The final identification of CRC participants is expected in early 2009 based on mandatory half-hourly metered electricity consumption of businesses during 2008,” he says.

Meeting the Carbon Reduction Commitment

It will be an auction-based “cap and trade” scheme whereby participants will be required to purchase and surrender allowances corresponding to their annual energy use converted into an equivalent number of tonnes of carbon dioxide emitted.

“There will be an uncapped three year introductory phase - commencing in January 2010 - which will have a fixed price for allowances; and is designed to develop familiarity with how the scheme operates, analyse each sector's emissions profile and address glitches; followed by an undetermined number of capped five-year phases. Phase One is proposed to commence in January 2013, which will align with Phase 3 of the EU Emissions Trading Scheme,” explains Woods.

Participants will be able to comply with the CRC by reducing their own energy use, or by purchasing sufficient allowances. “If participants do not reduce their emissions they will be required to trade in the market for allowances each year within a tightening emissions cap and likely increased prices for allowances,” says Woods. “So it will make business sense to try and reduce emissions if that can be done more cost effectively than buying allowances - it’s a question of economic margins for each business,” he says.

CRC allowances are expected to be issued in a Government auction every January, at a fixed price during the introductory phase. The availability of spare allowances for purchase will be dependent on some companies reducing emissions below the required level, and being willing to trade those spare allowances in the “secondary” market rather than “banking” them for future use themselves. Banking will not be permitted in the introductory period, says Woods. It will also be possible to purchase - but not sell - emission allowances from the EU Emission Trading Scheme, he says.

Overall, the scheme will raise no extra cash for the Exchequer, with auction revenue recycled to participants in proportion to the average annual emissions, with a bonus or penalty payment depending on an organisation's position in a CRC league table.

The importance of self-motivation

Unlike the EU trading scheme, the CRC makes no requirement for independent third-party verification and so participants will self-certify their emissions. However, this will be supported by an independent audit target of 20 per cent of organisations each year, probably to be carried out by the Environment Agency. “Each emissions year will be followed by a reconciliation period of three months during which organisations can collate their emissions data, buy or sell allowances on the secondary market, report their figures to the administrator and surrender emission allowances,” says Woods.

The annual reporting obligations are expected to be web-based and will require submission of information such as the annual consumption and types of energy used, as well as information from automatically read metres. Penalties for non-compliance – such as submitting false data, or missing the deadline of 31 March - will result in a penalty of up to £70 per tonne of carbon dioxide. An organisation will also be required to pay the CRC administrator for failure to surrender sufficient allowances for the years in which it should have participated in the CRC. Trading in allowances may well be open to a wide variety of players, not just organisations covered by the CRC. “Once purchased in the initial auction sale, participants will be able to trade on the secondary CRC market - directly with other companies - should they wish to buy or sell allowances. Non-participants such as brokers, traders and individuals will be allowed to trade in the secondary market,” says Woods.

“The trick for businesses will be to “predict and provide” on introducing cleaner measures in order to save costs further down the line, because even if certain businesses are not targeted immediately, they are likely to be in future years,” he says.