Making the most of SECR in 2020

Carbon compliance is fast climbing the list of priorities for business leaders, SECR included. However, there are many benefits to this piece of legislation aside from avoiding a visit from the auditors. EIC outlines a few of these less obvious advantages.

Unused data

If your organisation falls within the scope of SECR (Streamlined Energy Carbon Reporting) then your energy and carbon reports are no doubt on their way to delivery. However, the data you’ve collected can be put to other uses as well.

By taking a holistic view of energy and carbon savings, you can use this data to identify areas of waste or inefficiency within your business. The findings from such analysis can then underpin future strategy and possible architectural or behavioural adjustments to improve your carbon profile.

If your organisation makes use of smart meters and sub-metering solutions, you could even pinpoint which individual sites or site areas are underperforming.

SECR is vital, but its uses extend beyond the obvious

SECR as a rally cry

Climate change is a global challenge that requires innovation across every industry. When it comes to an organisation, no matter the size, there must be a shift towards sustainability not only at a leadership level but embedded in the corporate identity as a whole.

Your SECR process will require detailed data gathering from all elements of your organisation. A common theme is to delegate to site managers and then department managers. Once this is complete, foster open communications between these individuals to form a more cohesive SECR team.

SECR compliance spans across areas like energy management, sustainability, and financial reporting. As such, you have a strong opportunity to encourage greater co-operation across different parts of your business. In the case of organisations with road vehicles, they should make their fleet leaders a part of this conversation too.

Adjusting your scope

Currently you are mandated to report only on emissions from Scopes 1 and 2. These cover your direct emissions and those you buy and use respectively. However, that still leaves Scope 3 emissions – those that come from sources connected to but separate from your organisation.

It’s a long road to net zero, and these emissions will likely become a part of mandatory reporting before 2050. You can get ahead of the game by preparing for this now.

In addition, volunteering for this extra responsibility will further reinforce the culture of sustainability within your organisation. Why not demonstrate to your team that you don’t need a mandate to take the initiative on carbon reporting?

At EIC, we provide regular guidance to businesses in all aspects of carbon compliance including CCA and ESOS as well as SECR. Our dedicated carbon consultants have supported over 300 organisations through these processes and can do the same for you. If you are seeking insight on how best to utilise the findings from your SECR reporting or need to begin the reporting process to avoid fines, contact us here.

 

ESOS Phase 2 Compliance – Act Now

While it may seem like a costly and time-intensive process, there are financial opportunities and benefits to be found in this mandatory scheme.

In Phase 1 of ESOS, we at EIC identified a total of 527GWh worth of energy savings for our clients, equivalent to £49 million in cost savings. If you act now, you could avoid fines of £90,000 and reap the rewards of a new green plan.

What is ESOS?

The Energy Savings Opportunity Scheme (ESOS) is a mandatory compliance scheme in the UK, derived from Article 8 of the EU Energy Efficiency Directive. ESOS’s aim was to reduce EU energy consumption by 20% by the end of 2020. ESOS occurs in four-yearly phases and introduces regular energy audits that highlight energy savings for large businesses.

Who needs to comply?

Public bodies are not affected. Large organisations that must comply are classified as those with:

  • More than 250 employees or
  • A turnover of more than £50 million and an annual balance sheet total of more than £43 million

ESOS Phase 2 Updates

The ESOS deadline for Phase 2 was 5 December 2019. Any qualifying organisations who did not complete their assessment and submit a compliance notification by the deadline are at risk of enforcement action. Penalties issued in Phase 1 for compliance failures ranged up to £45,000 with a potential maximum fine of £90,000.

COMPLIANCE NOTICES

ESOS Regulators are currently issuing compliance notices to all UK corporate groups who they believe should have participated but haven’t yet received a notification of completion from.

If you receive this, you must inform the regulators whether you are:

  • in the process of completing your compliance, or
  • provide evidence you have already submitted your notification, or
  • advise that you do not qualify for ESOS

ESOS SUBMISSIONS

You can find a published list of all businesses who have made a submission via the ESOS notification system as of 1 February 2020 here.

Further evaluation of the effectiveness of energy audits and ESOS can be found here.

business analysis with colleagues

ESOS SUPPORT

If you need urgent support with your Phase 2 compliance, talk to EIC today. Our dedicated team of ESOS Lead Assessors and highly-trained Energy Auditors will work hard to help you comply as soon as possible, and support you in any conversations with the Environment Agency.

AFTER ESOS COMPLIANCE

It’s vital that you don’t let your compliance go to waste. ESOS aims to highlight where companies can make energy improvements, cut wastage and lower costs, use these opportunities to improve your operations and make significant energy savings. The most common areas for energy savings are lighting, energy management through smarter energy procurement, metering, monitoring and controls, and air conditioning.

REACH OUT

Whether it’s ESOS, SECR, or CCA, EIC will work with you to reach compliance deadlines and targets. Talk to EIC on 01527 511 757 or email info@eic.co.uk if you need any further advice on ESOS or SECR. We’re here to help.

Should SMEs conduct an energy audit?

EIC explores the benefits that firms can reap from conducting an energy audit and how to maximise the value of its findings.

Information is power

Energy audits provide firms with a clearer picture of their energy consumption patterns. Also, they can highlight existing points of weakness where wastage may be occurring as well as provide a foundation of knowledge for negotiating new energy procurement contracts.

As we approach the 2050 net-zero deadline, clarity surrounding energy usage – the major driver behind office-based carbon emissions – will become increasingly valuable.

Small to medium enterprises in particular stand to benefit greatly from the help audits can provide. Especially in navigating information barriers that conceal opportunities to improve their energy efficiency.

While a review of an organisations energy portfolio can seem daunting, technology can help lighten the load. Smart meters can keep an ongoing, up-to-date record of energy usage across an entire site.

Employing one of these devices essentially automates the local data-finding necessary to perform an effective audit. Given how vulnerable long-term metering is to human error, this makes their installation a wise first step in the process.

Metering alone can provide average energy savings of 10% and comprehensive sub-metering can raise these savings by a further 30% according to the Carbon Trust.

An on-site walk around compliments the auditing process since it can identify sources of inefficiency missed by meter readings. Old equipment in need of replacement is one common example. Another being wholesale temperature regulation of buildings since this often does not reflect actual occupancy levels in individual rooms.

The fruits of an energy audit

mixed fruitWith the audit complete, realistic energy efficiency targets become foreseeable and have a baseline for comparison of progress. Such a foundation is crucial for effective engagement with carbon compliance schemes like SECR and CCA.

Firms might follow up by installing site-wide building management systems that can provide further clarity on utility consumption.

Such a system can remotely govern space occupancy, dynamic temperature regulation and air quality from a single platform. The latter of these also affects the health and productivity of those within. Thus, intelligent air quality management can represent a twofold investment.

EIC understands the potential of informed utility management, hence why it provides all these services under a single banner.

Whether it be by supporting data collation with expert metering guidance or exploiting the discoveries that an audit yields with a single-platform building management system, EIC can provide the technical expertise needed for enterprises to maximise the benefit of an energy audit.

 

Summer Economic Update

EIC explores Rishi Sunak’s Summer Economic Update and what it means for businesses looking to gain a head start in the green revolution in the UK’s future.

A brave new world

The build back better campaign received a large, public endorsement from Chancellor of the Exchequer Rishi Sunak this week, who pledged in the Summer Economic Update that £3bn would be committed to the new green economy. While this is only a drop in the proverbial bucket of the £160bn Covid-19 recovery package, it has been met with great enthusiasm from both business leaders and the public.

An E.on survey conducted earlier this year, polling 500 UK-based business leaders, demonstrated that 72% felt that the pandemic has given them cause to re-evaluate their organisations priorities regarding the environment.

During the announcement, the Chancellor revealed the two major fields of improvement to be energy efficiency in public structures and a £2bn Green Homes Grant for those not in social housing. The remaining £1bn will be invested in improving the carbon usage and profile of public sector buildings through measures including double or triple glazing and smart energy meters.

“Improving the energy efficiency of buildings is crucial for reducing our emissions…. this announcement of £3bn is a welcome first step… This funding needs to be part of a comprehensive plan to improve the whole of the UK’s building stock, creating tens of thousands of jobs for the long term, not here-today-gone-tomorrow.”

UKGBC chief executive Julie Hirigoyen

Sunak also announced that £50m worth of funding would be used to support trials into early-stage energy efficiency and flexibility technology for the UK’s least efficient sectors.

The majority of respondents to E.on’s survey believe that the primary responsibility for the UK’s green revolution lies with business leaders, and the UK public, it seems, agrees.

Dancing in the dark

One of the unforeseen gifts of the pandemic has been a heightened awareness both of our potential effects on each other within our society but also the affect that our species is having on the planet. It is no secret that human behaviour is partially responsible for large-scale disease outbreaks and as a result, consumers are becoming ever more cautious about which companies to whom they declare allegiance.

The Capgemini Research Institute has also conducted a recent survey that showed almost 70% of respondents are concerned the effect that their spending habits are having on the natural world. The institute also reports that 80% have altered spending habits in the last year in response to social and environmental issues.

However, while there is clearly a market trend developing in favour of sustainable business practices, ‘greenwashing’ and a lack of transparency threaten to shake consumer trust on a mass scale. Six in ten business leaders consider their clients to be well informed of their sustainability efforts but over half of consumers have stated difficulty in confirming corporate sustainability claims.

“…when baked into an organization’s mission and purpose, sustainability has the potential to entirely change an organization’s relationship with its customers and partners… As businesses focus on transformation in the wake of the pandemic, they should put sustainability at the heart of their efforts.”

Capgemini’s VP for consumer goods and retail Kees Jacobs said.

Getting a head start

Legislation will be one of the major lynchpins in the UK’s approach to a green economic recovery, however clearly signposted legislation could also help to bolster consumer trust.

SECR stands as not only an ethical benchmark for firms that are invested in a cleaner economy, but also a declaration of intent to consumers. Compliance to such legislation demonstrates to consumers that emissions reductions is a company-wide objective and therefore representative of your brand as a whole.

The palatability of SECR is also a major benefit, while it is a complex piece of legislation; the objective is simple and easily explained to non-energy professionals. Employment of the strategies necessary to ensure compliance, be they energy efficiency measures, supply chain reorganisation or on-site generation raises a green flag to would-be clients.

Fortunately, each of these listed strategies is covered under EIC’s carbon management team, who are able to utilise over four decades of experience to create a bespoke carbon strategy for your firm. The EIC services page contains full details of its compliance offering.

 

 

 

Clarity of vision: Intelligent buildings

EIC explores the potential benefits to productivity that can be generated by effective and responsive environmental control, as well as the boon to cost saving and compliance processes it can provide.

Setting the scene

The percentage of the labour market now working from home (WFH), due to the lockdown imposed to fight the spread of COVID-19, is unprecedented with Finder estimating that 60% of the UK’s 33.7 million labourers are now working remotely.

Most commercial enterprises are being forced to reevaluate the way their staff perform their roles and the limitations imposed by location and direct proximity to colleagues and management. 

While WFH has demonstrated some obvious benefits, time saved by cutting out commutes for example, there are still many roles that require working from site.

Additionally, many employers will choose to return to a state of normality for logistical reasons like communication and conferencing that suffer novel limitations when used remotely. 

One of the upsides of COVID-19 will be an increased awareness and respect for the effect of working environment on productivity as well as on employee health.

Making informed decisions

Air quality, temperature and humidity are fluctuating qualities of an internal environment while lighting is more static.  However, they can each be directed according to need, tracked for data analysis and there is evidence that all of them affect productivity in the workplace.

“System design and the deployment of correctly implemented controls are the single biggest components to ensuring environmental conditions are correctly maintained.”

-Mark Longley, Head of Operations Solutions, t-mac

silhouette of trees near calm body of water at night panoramic photography

Air quality

The widespread attraction of commercial air conditioning is that it can provide a stable and consistent utility cost to weigh against air quality control, meaning that windows can be ‘sealed’ to prevent costly and unpredictable heat loss. 

Unfortunately, a lack of CO2 monitoring can lead to saturation in the internal environment which, in turn, can impair the cognitive functions of your team and lead to a drop in productivity. 

A 2015 report from Harvard University, titled “Economic, Environmental, and Health Implications of Enhanced Ventilation in Office Buildings”, demonstrated that:

The public health benefits of enhanced ventilation far exceed the per occupant economic costs… Even with conservative estimates, the increased productivity of an employee is over 150 times greater than the resulting energy costs.”

Ironically too much CO2 can often trick the brain into thinking that temperatures are uncomfortably high-meaning that air conditioning can actually be counterproductive to its original purpose if it is unable to respond dynamically to your needs.

“I don’t think our field has done a good job of reaching out to the real estate developers, managers, and owners of businesses that can make this change… I don’t think it’s acknowledged that changing these factors can make a difference.”

-Piers MacNaughton, Harvard

Temperature control

A discussion on air quality control necessitates one on temperature regulation since the two are often confused with one another. System-wide temperature control has been a standard in modern work and living space for decades, however its adaptability leaves something to be desired. 

The current fluctuations in British weather are an expected side effect of climate change however the thermal regulation of most offices isn’t equipped to respond to wide swings in temperature or humidity ranges-both of which affect our perception of temperature.

Additionally, recent reports have demonstrated human productivity is extremely sensitive to changes in temperature:

“The results show that performance increases with temperature up to 21-22 o C, and decreases with temperature above 23-24 o C. The highest productivity is at temperature of around 22 o C. For example, at the temperature of 30 o C the performance is only 91.1% of the maximum”

A collaboration between the Lawrence Berkeley National Laboratory and Helsinki University of technology, the report also stated:

“There is an obvious need to develop tools so that economic outcomes of health and productivity can be integrated into cost-benefit calculations with initial, energy and maintenance costs.”

Lighting

Finally, the internal lighting systems a business utilises can have a dramatic affect on productivity since they have a direct relationship with their staff’s circadian rhythms, the aspect of our biology that tells us when it is time to be engaged and time to rest.

Psychological studies have also shown that people’s mood and productivity can be affected by the ‘temperature’ of light as well i.e. whether light feels warm or cold to look at.

“There is growing evidence for a link between lighting conditions, shift-work and biological health conditions: an area likely to receive more attention from researchers in future.”

Lighting, Well-being and Performance at Work, by Professor Jo Silvester and Dr Efrosyni Konstantinou

Closing thoughts

All that being said, the key question is how to obtain the data and control necessary to make these systems work for you rather than just being extra columns on the expense report. 

Considering these elements as potential assets rather than liabilities might seem counter-intuitive but when the application of something has the power to affect productivity this dramatically, it is only a liability while it is not under our control.

As Jones Lang LaSalle’s 3-30-300 rule posits, for every dollar or pound spent on utilities like lighting and heat, you are likely to spend a hundred on people so why not make those costs go further by making what you spend on utilities count towards your people too.?

The recent SECR deadline also served as a sobering reminder of the importance of effective utilities management and regular reappraisal of existing practices. 

Intelligent building management will continue to grow more and more sophisticated, allowing greater adaptability to the needs of clients, staff and business owners, and EIC can help you to leverage this technology to increase both your staff’s productivity and your bottom line. To find out more click here.

An update on ESOS Phase 2

The ESOS deadline for Phase 2 was 5 December 2019. Unlike Phase 1, no extra time has been issued to allow for late submissions. Any qualifying organisations who did not complete their assessment and submit a compliance notification by the deadline are at risk of enforcement action. Penalties issued in Phase 1 for compliance failures ranged up to £45,000 with a potential maximum fine of £90,000.

Compliance Notices

ESOS Regulators are currently issuing compliance notices to all UK corporate groups who they believe should have participated but they haven’t yet received a notification of completion from.

If you receive this, you must inform the regulators whether you are;

  • in the process of completing your compliance, or
  • provide evidence you have already submitted your notification, or
  • advise that you do not qualify for ESOS

ESOS submissions

You can find a published list of all businesses who have made a submission via the ESOS notification system as of 1 February 2020 here.

Further evaluation on the effectiveness of energy audits and ESOS can be found here.

ESOS support

If you need urgent support with your Phase 2 compliance, talk to EIC today. Our dedicated team of ESOS Lead Assessors and highly trained Energy Auditors will work hard to help you comply as soon as possible, and support you in any conversations with the Environment Agency.

After ESOS compliance

It’s vital that you don’t let your compliance go to waste. ESOS aims to highlight where companies can make energy improvements, cut wastage and lower costs. Use these opportunities to improve your operations and make significant energy savings. The most common areas for energy savings are lighting, energy management through smarter energy procurement, metering, monitoring and controls, and air conditioning.

SECR

If your business complies with ESOS, it’s highly likely you will need to comply with Streamlined Energy and Carbon Reporting (SECR) too. SECR was introduced in April 2019 as a framework for energy and carbon reporting. Its aim is to reduce some of the administrative burden of overlapping carbon schemes and to improve visibility of energy and carbon emissions for large UK organisations.

SECR can also help businesses on their first steps to meet the UK’s 2050 Net Zero target. Companies in scope of the legislation will need to include their energy use and carbon emissions in their Directors’ Report as part of their annual filing obligations. They will also need to report any energy efficiency actions they have taken within each financial year. If the coronavirus is likely to cause a delay to your accounts, there is guidance here.

Talk to EIC on 01527 511 757 or email info@eic.co.uk if you need any further advice on ESOS or SECR. We’re here to help.

Time to focus on SECR compliance

The ESOS deadline has now passed and it’s time to focus on a new compliance scheme.

SECR, Streamlined Energy and Carbon Reporting, was introduced in April 2019 as a framework for energy and carbon reporting. Its aim is to reduce some of the administrative burden of overlapping carbon schemes and to improve visibility of energy and carbon emissions for large UK organisations. Given the timing of its introduction SECR could also help businesses on their first steps to meet the UK’s 2050 net zero target. Companies in scope of the legislation will need to include their energy use and carbon emissions in their Directors’ Report as part of their annual filing obligations they will also need to report any energy efficiency actions they have taken within each financial year.

We believe it’s time to focus on SECR. The good news is, if your business complies with ESOS, you’re in a much stronger position as you may have much of the data you require already to hand.

Who needs to comply with SECR?

The scheme affects UK quoted companies and ‘large’ unquoted companies and LLPs. These are defined as those meeting at least two of the following; 250 employees or more, annual turnover of £36m or more or an annual balance sheet of £18m or more.

What the scheme requires

For SECR, companies are required to report the following:

  • Scope 1 (direct) and Scope 2 (indirect) energy and carbon emissions (electricity, gas and transport as a minimum).
  • Previous year’s figures for energy and carbon. At least one intensity ratio (e.g. tCO2/turnover).
  • Detail of energy efficiency action taken within the reporting year.
  • Reporting methodology applied.

When will you need to comply?

Compliance will be based on your financial reporting year. Therefore, if your financial year is 1st April – 31st March, your first energy and carbon disclosure data collection will be for the period covering 1st April 2019 – 31st March 2020. This must be submitted in your Director’s Report after March 2020.

Take a look at our chart to see when your SECR deadline will be.

What happens if I don’t comply?

Whilst there are no fixed penalties specified, as there are in ESOS, there are still consequences for non-compliance. Not meeting the reporting requirements of SECR can result in accounts not being signed off. Missing the filing deadline could lead to a civil penalty. So it’s important for organisations to fully align communications between their energy and finance teams and to get a head start where possible.

Save time and hassle

There are similarities with SECR and ESOS when it comes to required data for each scheme, this can be used to your advantage. We offer a combined ESOS and SECR compliance package for businesses at a discounted rate. If you’d like more information on this or any of our services, call +44 1527 511 757 or email us.

Updates to the SECR Scheme

The Streamlined Energy and Carbon Reporting Scheme (SECR) came into force at the start of this month. Quoted companies and large unquoted companies and LLPs are affected, and will now be required to make a public disclosure within their Directors’ Annual Report of their UK energy use and carbon emissions.

Over the last few months the ETG (Emissions Trading Group) have been consulting with various parties and collating feedback and queries regarding the guidance for the scheme. As a result, a number of minor updates have been made to the SECR section (Chapter 2) of the Environmental Reporting Guidance.

 

A guide to the updates

All of the updates can be found in Chapter 2 of the Environmental Reporting Guidance.

Below is a summary of the changes:

  • Page 14, 20, 36 – hyperlinks for ISO 14001, BS 8555, ISO 14064-3 and ISO 14064-1 have been updated.
  • Page 26 – reference to public sector has been expanded (first paragraph and footnote 22) and also for charitable organisations (second bullet point).
  • Page 26 – new paragraph inserted to ensure that guidance is not seen as a substitute for the SECR Regulations.
  • Page 30 – reference to corporate group legislation has been expanded (sections 1158 to 1162 of Companies Act 2006) in the last paragraph of section 2.
  • Page 33 and 39 – amended reference to NF3 to reflect that it is not currently listed as a direct GHG in section 92 of the Climate Change Act.
  • Page 45 – footnote 39 referencing Government consultation published on 11 March 2019 on the recommendations made by the Independent Review of the Financial Reporting Council.
  • Pages 50-56 – changes to reporting templates to recommend grid-average emission factor is included as the default by those organisations that choose not to dual report.


Our view on the changes

These updates provide useful clarification on outstanding queries raised by EIC such as dual reporting of electricity. Dual reporting remains voluntary but doing so allows companies to demonstrate responsible procurement decisions. For example, those selecting to procure electricity from renewable sources with a lower emissions factor can demonstrate this within their energy and carbon report if they choose to dual report.

EIC work closely with the ETG and BEIS to help the group reach key decisions regarding carbon compliance scheme development and implementation, including SECR, and will continue to do so. As a result we are able to ensure all of our customers receive the most up-to-date information and we are always on hand to support with SECR compliant reporting.

Click here to learn more about the Streamlined Energy and Carbon Reporting scheme.

7 things you need to know about SECR

    1. SECR stands for Streamlined Energy and Carbon Reporting, a new UK Carbon Reporting framework. Companies in scope of the legislation will need to include their energy use and carbon emissions in their Directors’ Report as part of their annual filing obligations.

 

    1. It starts on 1 April 2019 and companies will need to report annually, reporting deadlines align with the company’s financial reporting year.

 

    1. The scheme affects UK quoted companies and ‘large’ unquoted companies and LLPs, defined as those meeting at least two of the following; 250 employees or more, annual turnover of £36m or more or an annual balance sheet of £18m or more.

 

    1. It will affect over 11,000 firms from high street retailers to manufacturers.

 

    1. SECR requires companies to report the following: their Scope 1 (direct) and Scope 2 (indirect) energy and carbon emissions (electricity, gas and transport as a minimum). Previous year’s figures for energy and carbon. At least one intensity ratio (e.g. tCO2/turnover). Detail of energy efficiency action taken within the reporting year. Reporting methodology applied.

 

    1. Not meeting the reporting requirements can result in accounts not being signed off and missing the filing deadline could lead to a civil penalty. So it’s important for organisations to fully align communications between their energy and finance teams and to get a head start where possible!

 

  1. There is an overlap with other reporting and compliance schemes such as ESOS so savvy businesses can save time and hassle by using data collection from one to support compliance with another.

Find out more at our Streamlined Energy and Carbon Reporting (SECR) service page.

ESOS Phase 2 – stay ahead of the deadline

The compliance date for ESOS Phase 2 is fast approaching. Make sure you’re on track to meet the 5 December 2019 deadline.

With under a year to ensure your compliance with ESOS Phase 2, it’s critical to make sure you’re ready to complete all compliance activity within the next 12 months.

The qualification date is 31 December 2018. This means that if you know your business will fit the ESOS criteria, you can start some compliance activities now.

ESOS applies to large organisations, classified as those with:

  • More than 250 employees or;
  • A turnover of more than €50,000,000 and an annual balance sheet total of more than €43,000,000 or;
  • Part of a corporate group containing a large enterprise.

ESOS compliance can help you get a head start with upcoming Streamlined Energy and Carbon Reporting (SECR) compliance – find out more here.

 

Three reasons to comply with ESOS Phase 2

1 – avoid paying over the odds

Many organisations delayed the start of their compliance journey until close to the Phase 1 deadline. This led to a squeeze in service provision, leading many suppliers to increase the cost of their services. Environment Agency (EA) data shows a significant spike in compliance notifications around one month prior to the 5 December 2015 deadline. What’s more, 33% of all who complied by July 2016, did so in the final week of Phase 1. A further 30% of notifications were logged by the end of January 2016.

Had demand for ESOS compliance support been smoothed over the course of 2015, costs may have been more reasonable as the deadline approached.

The lesson here is not to wait until the final months of 2019 to get started with Phase 2.

 

2 – ESOS Lead Assessor numbers are limited

There were almost 950 ESOS Lead Assessors accredited across 14 approved registers by the Phase 1 deadline. BEIS suggests there were enough Lead Assessors to help organisations reach compliance. By 5 December 2015 there were 7.3 qualifying undertakings per Lead Assessor. This is based on an estimated 6,933 organisations that met the ESOS qualification criteria.

However, this doesn’t take into account the Lead Assessors that become accredited purely to certify their own organisations alone. So, in fact, the 900+ Lead Assessors would’ve been spread far more thinly. There’s also a broad scope of the size of organisations (by employee size) and number of sites per qualifying business, meaning not every organisation would have been as easy, or as quick, to assess as another.

Our advice would be to seek guidance from compliance partners you already know who have a proven track record with Phase 1 compliance.

 

3 – Acting now enables you to seize your energy saving opportunity

Delaying compliance for as long as possible means by the time you comply you’ll simply be ticking a box and more than likely paying an unreasonably high cost.

Acting now allows your organisation to really invest in the compliance process by ensuring you have strong and accurate reporting of your energy consumption data. Accurate data is the start of being able to visualise and truly understand when, where, and how you use energy and, more importantly, how you can improve your efficiency to increase savings. EIC can assist you with implementing any energy saving measures identified as part of your ESOS recommendations report. We’ll also ensure these measures work in harmony with each other as part of a bespoke, joined-up Strategic Energy Solution.

 

Why make EIC your trusted compliance partner?

Whether it’s ESOS, SECR, or CCAs, EIC will work with you to reach compliance deadlines and targets. In Phase 1 of ESOS our team identified 2,829 individual energy efficiency opportunities, equivalent to 461GWh or £43.9m of annual savings across 1,148 individual audits. We also helped over 300 ESOS Phase 1 clients avoid combined penalties of over £48m, based on maximum fines.

With under a year until the ESOS Phase 2 deadline, we’re urging you to make a start with compliance. To find out more about how we can help you comply, call us on 01527 511 757 or email esos@eic.co.uk

An insight into SECR

SECR will require all quoted companies, large UK incorporated unquoted companies, and limited liability partnerships (LLPs) to report their energy use and carbon emissions relating to gas, electricity, and transport, and apply an intensity metric, through their annual Directors’ reports.

 

Summary of the Government’s proposed SECR framework

From April next year, large organisations in the UK will need to comply with the SECR regulations. The new scheme is part of the Government’s reform package.

Its aim is to reduce some of the administrative burden of overlapping carbon schemes and improve visibility of energy and carbon emissions. As such, it will be introduced to coincide with the end of the current Carbon Reduction Commitment (CRC) Energy Efficiency Scheme.

SECR will build on the existing mandatory reporting of greenhouse gas emissions by UK quoted companies and the Energy Savings Opportunity Scheme (ESOS).

 

Who needs to comply with SECR?

SECR qualification will follow the Companies Act 2006 definition of a ‘large organisation’, where two or more of the following criteria apply to a company within a financial year:

  • More than 250 employees.
  • Annual turnover greater than £36m.
  • Annual balance sheet total greater than £18m.

There is no exemption for involvement for energy used in other schemes – e.g. Climate Change Agreements (CCAs) or EU Emissions Trading Scheme (ETS).

 

What are the reporting requirements?

From 1 April 2019, affected organisations will be required to:

  • Make a public disclosure within their annual directors’ report of energy use and carbon emissions.
  • Report using a relative intensity metric e.g. tCO2/number of employees.
  • Provide a narrative on energy efficiency actions taken during the reporting period.

Reporting will align with an organisation’s financial reporting year.

 

Is anyone exempt from SECR?

Yes – those exempt from complying with SECR include:

  • Public sector organisations.
  • Organisations consuming less than 40,000kWh in the 12-month period are not required to disclose SECR information.
  • Unquoted companies where it would not be practical to obtain some or all of the SECR information.
  • Disclosure of information which Directors think would be seriously prejudicial to interests of the company.

 

There seem to be similarities to ESOS – can ESOS compliance help with SECR?

Yes. Though ESOS and SECR are separate schemes, and will continue as such, the information from your ESOS compliance can be used to support SECR reporting.

 

Where do I start with compliance?

The detailed guidance for SECR will soon be published. EIC can assist with compliance as well as providing bespoke reporting to ensure that you have real visibility of your energy and carbon emissions both at organisational and site level.

If you would like to know more about SECR, what it means for your business visit our Streamlined Energy and Carbon Reporting (SECR) service page.

How ESOS can help you get ahead with SECR

You probably know all about ESOS, and you may feel that even now, with 15 months until the next deadline, there’s still no rush to get started with Phase 2. We disagree. Rather than put off compliance until the bitter end, we recommend getting ahead of the curve to avoid any bottleneck in resources later on.

The ESOS Phase 2 compliance deadline is 5 December 2019, however, the qualification date is 31 December this year. This means that if you know your business will fit the criteria, you can start some compliance activities now.

ESOS applies to large organisations, classified as those with:

  • More than 250 employees or;
  • A turnover of more than €50,000,000 and an annual balance sheet total of more than €43,000,000 or;
  • Part of a corporate group containing a large enterprise.

 

It’s time to get started

In their latest ESOS newsletter, the Environment Agency (EA) emphasised that businesses can start audit work now. They state that although you won’t be able to complete the assessment of your Total Energy Consumption (TEC), as this has to include the qualification date, if you expect to qualify for Phase 2 – and you know that an energy supply will be included in your Significant Energy Consumption (SEC) – you can do the audit work on this supply.

This audit will need to have at least one-year’s energy measurement, but this can be from anytime between 6 December 2015 and 5 December 2019. The audit can use data that has been collected at any time during this period provided that it is carried out no later than 24 months after the data period (and the data has not already been used for an audit in Phase 1).

 

SECR is coming – ESOS can help get you ready

Streamlined Energy and Carbon Reporting (SECR) aims to further incentivise the improvement of energy efficiency and reduction of carbon emissions. It’s also hoped that SECR will reduce some of the administrative burden of overlapping carbon schemes. As such, it’ll be introduced from April 2019 to coincide with the end of the current CRC Energy Efficiency Scheme.

Taking action with ESOS compliance will help you get a head start with preparing for SECR compliance. Though ESOS and SECR are separate schemes, and will continue as such, you can use information from your ESOS compliance to support energy and emissions reporting and narrative on energy efficiency action taken in your annual reports.

 

Make EIC your trusted compliance partner

Whether it’s ESOS, SECR, or CCA, EIC will work with you to reach compliance deadlines and targets. In Phase 1 of ESOS we identified a total of 527GWh worth of energy savings for our clients, equivalent to £49,000,000 in cost savings.