BIG businesses shoulder much of the blame for climate change, but there has been precious little direction on what they are expected to do to combat it.

So when the government published the Climate Change Bill in mid-November it was welcomed by British companies keen finally to be given some official targets for reducing carbon-dioxide emissions.

The bill’s overall objective is to reduce CO2 emissions by at least 60% by 2050, and 26%-32% by 2020, compared with 1990 levels. But the impact on big organisations such as supermarkets and other large retailers, as well as banks and government departments, comes in the form of the Carbon Reduction Commitment.

This will be a mandatory, auction-based emissions-trading scheme where the benefits gained from introducing more energy-efficient ways of operating should outweigh the costs of participating in the scheme. It is expected to cover between 4,000 and 5,000 organisations, which use over 6,000 MWh of electricity per year, which equates to an annual bill of about £500,000.

The earliest the scheme will come into force is 2009, and while waiting for the bill — the first of its kind in the world — to arrive, many companies have pre-empted the government and introduced their own green policies and targets for CO2 reduction.

Benchmarking what other companies are doing is a vital means of learning what can be done to counter climate change, which is where the Sunday Times Best Green Companies Awards — launched last Sunday — comes into its own.

The survey, run by The Sunday Times in partnership with Bureau Veritas, one of the world’s premier environmental management consultancies, and Munro Global, the leading market-research group, asks challenging questions about environmental performance. In addition, employees will be asked how far corporate policies have been adopted by staff.

The survey is the first of its kind in Britain and will provide a litmus test for how deeply green initiatives are embedded within many of our leading companies.

But it is not only government legislation that is calling for companies to account for their environmental sustainability — consumers are increasingly demanding in their shopping choices. Sir Terry Leahy, the Tesco chief executive, knows in which direction he has to take the supermarket chain.

“At Tesco, we know that going green is not just a desirable way forward. Increasingly, it’s becoming a business imperative as customers look to retailers to help them lead a greener lifestyle,” he said.

Leahy has greeted the Climate Change Bill warmly, but calls for co-operation in helping achieve its objectives. “Government and business need to work together to cut carbon emissions, so I welcome anything that helps move us all in the right direction. It’s important that the government helps businesses to play their part by removing planning bottlenecks and other impediments to renewable technology and by providing incentives,” he said.

As a company that has felt the sting of disapproval in some quarters for its seemingly limitless success, it makes sense for Tesco to lead the way with its PR-friendly green policies.

Next year the supermarket giant will be two years early in meeting its target to halve the energy consumption per square foot of its UK stores compared with the year 2000. Tesco also has a target to halve carbon emissions per square foot across its entire global estate by 2020.

The John Lewis Partnership, (which includes Waitrose supermarkets as well as the department stores), is also pleased that the government has introduced some structure to green issues. A spokesman said: “We support the Climate Change Bill and we welcome the positive lead that it has taken. There’s currently uncertainty in international policy on climate change, so it’s good news that the bill is seeming to counter that trend.”

As a member of the Corporate Leaders Group on Climate Change, the John Lewis Partnership has been lobbying for a better legal structure in the area.

“Business has to play a part in tackling climate change — it can’t do that unless there’s a framework. The Climate Change Bill will introduce a framework in which all retailers know what is expected of them,” said the spokesman.

Shopping trends at Waitrose show a clear demand from consumers for greener products. Sales of locally sourced produce, which come with fewer food miles, have risen 80% this year compared with last year.

Meanwhile John Lewis stores now offer products such as televisions that shut down completely rather than reverting to standby when switched off. Since October of this year, 100% of the partnership’s energy requirements come from renewable sources, and there is a rolling programme under way at Waitrose to replace all old refrigerators with new, more energy-efficient models, at a cost of about £55m.

Marks & Spencer started its “Plan A” in January, a business-wide, £200m eco-plan that will affect every area of M&S’s operations over the next five years. By 2012 the company has vowed that it will become carbon neutral, not send any waste to landfill, extend sustainable sourcing, set new standards in ethical trading and will help customers and employees to live a healthier lifestyle.

“This is a deliberately ambitious and, in some areas, difficult plan. We don’t have all the answers but we are determined to work with our suppliers, partners and government to make this happen. Doing anything less is not an option,” said M&S chief executive Stuart Rose. As their in-store campaign slogan puts it: “Because there is no Plan B”.

While government legislation is limited to curbing carbon emissions, being a Sunday Times Best Green Company involves more than just that. Marks & Spencer, for example, will plant a tree in Scottish woodland for every artificial Christmas tree it sells this year. This makes good environmental sense and is the sort of practice that will be measured by the Sunday Times Best Green Companies survey.

What the competition is really looking for is change, signs that a company is trying to define how it is affected by sustainability — and is taking action to deal with it. A cement company emitting tens of thousands of tonnes of carbon-dioxide each year could be in line for an award if it has done its best to reduce those emissions compared with previous years.

The first section of the survey collects information on environmental management, such as energy use, recycling and carbon footprint, but it also allows organisations to describe their environmental objectives and efforts to increase awareness of green issues in the workplace.

Employee feedback is also important. Following the successful formula of the Sunday Times 100 Best Companies to Work For project, the views of employees will be pivotal to a company’s ultimate success and will account for 30% of an organisation’s final mark. There will be five competitions within the overall Best Green Companies framework. Organisations will be split according to size and then into high, medium or low impact, depending on the environmental effect of their business.

Companies can apply now and the competition will remain open until February 29, 2008.