What is driving corporate sustainability?

Rising interest in climate change means businesses are facing increased scrutiny over the environmental and social impacts of their practices. Mandatory carbon reporting already makes corporate sustainability obligatory for many big energy users. And securing funding in the future may entirely rely on a company’s ESG strategy thanks to financial guidelines like the TCFD.

Fortunately, there are many benefits to embracing corporate sustainability beyond ticking boxes. An organisation’s green credentials will only rise in value as the UK races towards its net zero target. Not to mention, at the heart of decarbonisation and sustainability is energy efficiency, which can uncover considerable cost savings.

There are various forces driving corporate sustainability, including a shift in consumer behaviour, policy changes and more ambitious government targets. These forecast a more permanent transformation in the business and finance sectors.

The race to net zero

The real fuel behind the environmental movement at the moment is the global race to net zero. Over the past year, the UK government has introduced new policies and plans to achieve net zero emissions by 2050. This includes new energy efficiency standards, increased renewable generation, hydrogen development, and a ban on petrol vehicles from 2030.

What is clear is that the green wave is coming.  To stay competitive, businesses will have to create sustainable strategies that prepare them for a net zero economy.

EIC can be your partner in this journey, from the first energy audit through to accreditation. Along the way, we help manage all your energy admin and take the stress out of complex carbon legislation. The path to net zero can be difficult to navigate, but our experienced in-house team of energy specialists provide end-to-end simplification. Giving you peace of mind, and your organisation a green, resilient future.

The Task Force on Climate-related Financial Disclosures (TCFD)

In November 2020, Chancellor Rishi Sunak announced plans to make alignment with the TCFD guidelines mandatory in the UK. This will apply to most sectors of the economy by 2025 including listed companies, banks, and large private businesses.

The Task Force on Climate-related Financial Disclosures was established in 2015 by the international Financial Stability Board. It is based on the growing consensus that climate change has immediate effects on economic decisions.

This new step towards mandatory transparency will require a more holistic view of a company’s environmental footprint. It also confirms that investors are growing more aware of climate-related risks and are putting more faith in organisations that plan ahead. For this reason, it can be beneficial for organisations to follow TCFD guidelines, whether they are obligated to do so or not.

Impact investing and the rise of ESG

Environmental, Social and Governance strategies are not new to the corporate sector, but they have become more important in recent years. Now with a heightened focus on climate change and social justice, ESG is becoming essential for securing future investments.

This goes hand-in-hand with the rise in impact investing, which goes beyond mitigating risks and asks – how is your organisation positively impacting the planet? This trend has seen a rise in companies with social or environmental missions.

Why choose true sustainability?

The rise in climate action has led to some companies ‘greenwashing’. This is essentially when a company markets themselves as being ‘green’ without taking real action to reduce their environmental footprint.

There are many benefits to genuine environmental sustainability. The most important being an organisation’s longevity in a changing market.

If the recent shift in policy and finance has taught us anything it is that total transparency will be essential in the future. While ‘greenwashing’ may have some rewards now, it is poor preparation for a net zero economy. And though it may be cheaper in the short term, organisations that are ignoring their energy efficiency are missing out on significant long term savings.

Why choose EIC on your journey to net zero?

At EIC we know that building an environmentally and ethically sound business is not only the smart thing to do, it is the right thing to do. Our in-house team can guide you through energy monitoring, carbon footprinting, green procurement and compliance legislation. Our aim is to provide you with holistic energy management and sustainable solutions that boost your green reputation and financial savings.

Contact us at EIC for a bespoke net zero roadmap for your organisation.

SECR: How to make it work for your business

Compliance with carbon legislation such as Streamlined Energy and Carbon Reporting (SECR) has become a corporate obligation. But it can also unlock a range of opportunities for businesses seeking sustainable growth.

This is because the energy audit and reporting involved in carbon compliance can gather valuable data. This can then help to unearth hidden financial savings by highlighting areas of inefficiency and waste. Not to mention, sealing those leaks to reduce carbon emissions.

So, while it is often seen as a tedious piece of admin, SECR can help organisations prepare for the UK’s transition to a net zero economy. Smart energy management can also help to build a resilient foundation for any future business.

Here are some of the hidden benefits businesses are privy to if they make the most of SECR.

Getting more out of your energy audit

If your organisation falls within the scope of SECR, your energy and carbon reporting is already a priority. But the data collected has value far beyond mandatory compliance.

Submetering and monitoring provide a window into the performance of your building. Helping to pinpoint any weaknesses and inefficiencies in your systems. This holistic view of your energy use and carbon emissions can help you build a smarter, data-driven sustainable strategy.

With the next-generation technology available today, you can go beyond the data and incorporate smart controls. Our sister company, t-mac, offers Building Management Systems (BMS) that enable real time insights with IoT technology. For big energy users, this is an invaluable energy management tool for streamlining carbon compliance processes.

Ignoring this data after the initial report would mean that you risk wasting time and money on energy admin. It would culminate in nothing more than standard compliance.

Preparing for future Scope 3 reporting

Currently, organisations are mandated to report on only scope 1 and 2 emissions.

Scope 1: Direct emissions from company operations such as company vehicles or factories

Scope 2: Indirect emissions from company operations such as purchased electricity generated by fossil fuels

But it is a long road to net zero, and scope 3 emissions will likely become a part of mandatory reporting before 2050.

Scope 3: Indirect emissions from company supply chains such as shipping, business travel, and raw material extraction

By making the most of your current reporting you can prepare your organisation for future compliance. This gives you an advantage over your competitors and helps mitigate any risks, and costs, involved in last-minute reporting.

Boosting your green credentials

Businesses are waking up to the rapidly evolving corporate landscape and the growing focus on transparency. With climate change now being widely recognised as a global challenge, it is clear that every industry will have to innovate and adapt. Any organisation’s growth and longevity will increasingly rely on its levels of sustainability and environmental, social and governance. Both at a leadership level but also embedded in the corporate identity as a whole.

SECR compliance spans areas like energy management, sustainability, and financial reporting. This challenge can be transformed into an opportunity by establishing open communication between teams and forming a more cohesive SECR team.

When EIC helps a client navigate complex carbon legislation, we go beyond compliance. By establishing a long-lasting sustainable strategy for your team, we help to incorporate green values into every part of your corporate identity.

Beyond compliance, genuine sustainability will become an expectation among employees, customers and stakeholders. While greenwashing is widespread now, with companies cashing in on the climate-friendly trend, this won’t be an option for long. With transparency made mandatory and rising interest from the general public, companies will struggle to hide their skeletons.

SECR can help you begin your sustainable journey by rallying your team around your environmental mission.

How can EIC help?

At EIC, we provide businesses with end-to-end guidance and support for carbon compliance including EPBD, ESOS and SECR. Our dedicated carbon consultants have supported over 300 organisations, many of them are big energy users with complex energy admin. Our goal is to simplify and streamline your energy management from utility connections to net zero guidance.

If you want to understand how to put the findings from your SECR reporting to good use or need to begin the reporting process, contact us at EIC today.

The journey to and benefits of Scope 3 emissions reporting

Last year saw many businesses contending with the challenges of SECR (Streamlined Energy and Carbon Reporting) for the first time. 2021 does not promise any respite however and Scope 3 emissions remain a contentious issue.

What are the scopes?

Reporting on Scope 1 and 2 emissions is mandatory for many organisations. Any ‘large’ company must report if they meet the following criteria:

  • 250+ employees
  • Turnover more than £36m
  • Balance sheets totalling over £18m

As well as reporting the emissions themselves, organisations must show the steps they have taken to reduce emissions over the course of the financial year.

The key distinction between Scope 1, 2 and 3 emissions is how directly they relate to your business operations. Scopes 1 and 2 concern direct emissions made by your organisation. Scope 3 takes a holistic view of business operations, including your supply chain, and how embedded carbon emissions can be reduced throughout it.

Firms have typically avoided reporting on Scope 3 emissions unless required to do so. Yet, they are missing out on a range of benefits afforded by going the extra mile in their carbon reporting.

 

End-to-end control

Conducting a robust analysis of your supply chain’s carbon emissions can provide insights that would otherwise be unavailable. Such as GHG (Greenhouse Gas) emissions and cost reduction opportunities that exist outside of the organisation.

Generally, sources of Scope 3 emissions provide support to your business without existing directly under your control, however, there are a couple of exceptions.

Scope 3 emissions can include:

  • Business travel
  • Employee commuting
  • Investments
  • Leased assets and franchises
  • Purchased goods and services
  • Transportation and distribution
  • Use of sold products
  • Waste disposal

While many of these represent elements of a supply chain others can be tackled more immediately. Business travel, commuting, investments, and waste disposal are all subject to the influence of your management team.

Choosing to report means you can engage with sustainability culture across all levels of your organisation. Engagement can include a ride-to-work scheme to encourage greener travel options, divestment from fossil fuels, or taking on a waste disposal contractor that can reduce both your costs and carbon emissions.

Scope 3 emissions matter on the global scale

Thinking globally

After ensuring that your in-house Scope 3 emissions are under control, it is wise to next look to your supply chain and the environmental impact of your business on a global scale.

Despite not being a direct consumer, your firm still possesses the buying power to influence the behaviour of its collaborators and the power to choose who not to collaborate with based on their carbon profile.

In addition, the data you gather in order to report may highlight potential weak points in your supply chain vulnerable to events like pandemics or climate change. Just last year, we saw Brent Crude, the international standard for oil prices, drop to zero. All because of a sudden and unforeseeable fall in demand triggered by the pandemic, and with suppliers losing millions in the process.

Assessing these factors gives you the opportunity to adjust or replace links in the chain to ensure future resilience. Since Rishi Sunak promised that the UK will be a leader in climate risk disclosure, having a strong Scope 3 dataset will help bolster the confidence of future investors.

It is likely that abiding by TCFD (Task Force on Climate-Related Financial Disclosures) regulations will become mandatory for an increasing number of businesses in the future. Securing Scope 3 data now can give you a head start in the process.

Finally, an understanding of your Scope 3 emissions will empower you to choose suppliers whose priorities align with your own brand. Given that 84% of consumers in 2020 stated that being environmentally friendly is important to them, consistency in brand values is becoming more important than ever.

 

How can EIC help?

EIC offers expert guidance on a range of compliance processes including SECR for all emissions scopes, as well as consultative services for carbon management assisting routes to carbon neutrality, energy management, UK ETS, CCA, and ESOS.

We will provide you with a dedicated carbon consultant, annual and bi-annual energy and carbon reports, and we’ll completely oversee both the compliance process and any energy audits and evidence collection required.

Since we view the goal of sustainability completely, we also offer packages of complimentary services like ESOS and SECR to encourage our clients to do the same.

To find out if one of these packages might suit your organisation, and how our compliance services can work for you, get in touch.

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.

SECR: Why use EIC?

A brief look into SECR, why it matters, the deadlines and reasoning behind the legislation and how EIC can combine it with ESOS in an economic package suited to your organization’s needs.

The Nuts and Bolts

The UK’s Streamlined Energy and Carbon Reporting Policy (SECR), is a piece of government legislation that came into effect April 1st of last year. It seeks to consistently highlight the carbon footprint of companies, whilst encouraging long term strategies that are congruent to UK carbon emissions goals.

To that end, the SECR requires companies to provide a detailed report which includes items such as their carbon emissions and energy efficiency/carbon reduction behaviours implemented to redress their overall carbon footprint.

Established as the Carbon Reduction Commitment (CRC) was ending, last year’s regulations will affect approximately 11,900 companies in the UK, considerably increasing the range of influence that the CRC originally enjoyed.

The scheme affects businesses described as “large organisations” within the Companies House terminology. Therefore businesses which have at least a turnover of £36 million, balance sheet of at least £18 million, or 250 or more employees, will be within this category.

SECR works in cooperation with the pre-existing legislation the Energy Savings Opportunity Scheme (ESOS).

Year 1 – Act Now

Since the SECR came into effect on April 1st 2019, it means that we now sit on the eve of the first regulatory deadline, with the first trench of qualifying businesses financial year ending in March 2020.

For businesses which also qualify for ESOS, the SECR scheme is a useful tool to provide the necessary data sets required for compliance, making the journey smoother.

As such, we felt that the timing was right to remind our readers of the combined ESOS and SECR package that we offer. The fusing of the two services is designed to remove unnecessary stress and inconvenience with the promise of a dedicated Carbon Consultant.

Finally, EIC also offers a 10% discount to any clients that sign up for a 4-year joint service package, our website contains further details on all of our services and we invite you to find out more should they appeal to you.

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.
  2. It starts on 1 April 2019 and companies will need to report annually, reporting deadlines align with the company’s financial reporting year.
  3. 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.
  4. It will affect over 11,000 firms from high street retailers to manufacturers.
  5. 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.
  6. 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!
  7. 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.