Keeping down costs has always been a mantra for well-run businesses, but the economic downturn has made it more important than ever to focus on the bottom line and eliminate unnecessary expense.

This usually means cutting jobs or unprofitable parts of the business, but a growing number of companies are saving money by reducing their energy consumption, too. Energy wasted by businesses last year cost an estimated £2.5 billion, or the equivalent of 20 million tonnes of carbon dioxide.

But cutting carbon emissions does not only make sense financially; it also helps organisations to qualify for the Carbon Trust Standard, the world's first carbon reduction award scheme, announced last year. It is independent but linked to the Government's Carbon Reduction Commitment.

From April next year, any organisation consuming more than 6,000 megawatt hours of electricity in 2008 — an annual spend of about £500,000 — will be required to buy carbon allowances to cover their emissions. The money will be repaid depending on each organisation's performance, to be published in a league table. Those that hold the Standard will receive a higher ranking in the table and earn more repayments.

About 5,000 UK organisations, in the public and private sectors will be affected by the legislation. More than 60 household names, including Morrisons, Diageo, Hewlett-Packard and Royal Mail, have already qualified for the Standard, saving more than half a million tonnes of carbon emissions in the process.

The Carbon Trust developed the Standard in response to consumer mistrust of organisations' green claims, as well as confusion in the business community about how best to reduce emissions and energy consumption.

Tom Delay, chief executive of the Carbon Trust, said: “Achieving the Carbon Trust Standard will enable organisations to take advantage of the bottom-line benefits that come from reducing carbon emissions. It will also help brands stand out from the crowd, as research shows that consumers and business decision-makers will choose an organisation with an award like the Carbon Trust Standard over another of similar price and quality.”

Ronan Dunne, chief executive of O2 in the UK, which last month became the country's first mobile operator to be awarded the Standard, agreed that reducing energy use has benefits other than simply cutting costs. “We can use our energy and carbon performance to distinguish ourselves from competitors and, we believe, to engage with our customers,” he said.

He urged other companies to apply for the Carbon Trust Standard because it was the best way to demonstrate that they were taking action to address climate change. “No one can claim you are creating ‘environmental spin' when your performance has been independently verified by the Carbon Trust,” Mr Dunne said.

Paul Eggleton, energy manager at O2, said that the company's green drive was about much more than meeting government targets: “Any company that is not looking at reducing their energy consumption in this economic environment is foolish.”

Although O2 has achieved the Carbon Trust Standard, it intends to keep finding ways to reduce energy consumption. It will introduce waterless urinals in more offices and is testing a mobile base station powered entirely by wind and solar energy.

Morrisons, the supermarket group, was one of the first companies to be awarded the Carbon Trust Standard and has reduced its carbon emissions by 12.8 per cent over the past three years. Its “Switching On to Switching Off” campaign has saved the retailer some £3.4 million in energy costs.

John Sauven, executive director of Greenpeace, said: “The Carbon Trust Standard marks the difference between organisations that are really reducing their own emissions and those that are greenwashing customers with hollow pledges and no action. Carbon emissions urgently need to be cut and this initiative is a good starting point. But to be truly green, business must go beyond this and significantly de-carbonise their supply chain.”

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