Organisations across the UK face penalties unless they comply with the Government’s new Carbon Reduction Commitment (CRC) due to come into force at the start of April.

KPMG, the business advice group that covers Kent from its Gatwick office, warns that the penalities will hit their bottom line, even before carbon trading begins in 2011.

Organisations with annual electricity bills of approximately £1 million or more must start measuring and accurately reporting their energy usage to Government auditors. Those that submit late or inaccurate data could be penalised and publicly chastised.

KPMG has found that compliance failures, such as incorrect reporting, pose the greatest immediate risk to both reputation and the bottom line. It claims that two thirds of businesses are currently misstating their carbon numbers by a margin that will incur fines.

From April 2011, the Government will publish league tables ranking participants on their success at managing and reducing their carbon emissions.

Vincent Neate, UK Head of Sustainability at KPMG, said: "Organisations that understand the scheme have an opportunity to be rewarded for improved energy efficiency while others will be penalised and face reputational damage. The scheme effectively creates a financial and reputational price for not being green."

KPMG has this advice:

• Determine if you have any mandatory half hourly meters - if you do, you are caught by the scheme
• Determine the level of 2008 electricity use through any half hourly meter. If this is less than 6000MWh, you still have to report but won’t have to pay for carbon. If it is more than 6000MWh (approx £1m spend) then you are likely to have to report and trade in full from 1 April
• Collate and retain copies of energy bills and statements from 2008
• Build a register of fixed source energy use and emissions
• Recognise any emissions where landlord/tenant confusion might arise
• Familiarise yourself with all the deadlines for registration and data submission
• Start measuring your full carbon footprint within the scheme from 1 April 2010