SGS moving climate project audit business to India to cut costs
LONDON, April 2
LONDON, April 2 (Reuters) - International certification firm SGS is moving its Britain-based auditing business for clean energy projects to India in an attempt to cut costs, the company's head of environmental services said on Wednesday.
Geneva-based SGS is one of the main auditors of projects under the U.N.'s Clean Development Mechanism (CDM) - a programme under the Kyoto Protocol to help fund climate change mitigation efforts in poor countries while generating carbon offsets for investors.
A collapse in demand for the offsets has led offset prices to crash by some 99 percent in the past five years to around 0.15 euro ($0.21) each, prompting several auditors to scale back or pull out completely.
"There's no doubt there's been a drop in business ... but we're seeing continued activity in China, India, the Middle East and, to a lesser extent, South America, so we're moving closer to the market," Peter Possemiers, SGS' executive vice president of environmental services, said by telephone.
SGS, which also provides technical advice and training to industries including oil and gas, agriculture, mining, construction and chemicals, expects to complete the move within six months.
Possemiers said the firm would reassign the small UK-based CDM team of around four people to other internal roles.
Last month, Norway-based DNV GL - the largest project auditor under the U.N. scheme - shut its CDM validation and verification business after the plummeting offset prices caused investment in the programme to dry up.
CDM participants have warned that poor ambition from countries to cut their greenhouse gas emissions, coupled with low offset prices, could lead to an irreversible deterioration of investment in the scheme and its underlying infrastructure.
($1 = 0.7249 Euros) (Editing by Dale Hudson)