compliance Archives

The journey to and benefits of Scope 3 emissions reporting

Posted on 11th January 202115th February 2021 by Josh Ellison

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.

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.

Explaining TM44 Inspections: The what, who, when and why

Posted on 7th October 202026th October 2020 by Josh Ellison

EIC explores the purpose of TM44 inspections, why your organisation might need one and how EIC can help you get one.

What is TM44?

TM44 is the accepted guidance for the UK for judging the efficiency of air-conditioning units. The key role of the guidance is to support inspections to comply with the Energy Performance of Buildings Directive (EPBD). However, they can provide assistance to any building owner or manager desiring further data on the efficiency of their air-conditioning system. The EPBD¹was initiated in 2003 and replaced a decade later by a recast Directive².

The legislation required that European members devise ‘measures to establish a regular inspection of air-conditioning systems of an effective rated output of more than 12 kW’.

Who needs a TM44?

Not all air-conditioning systems are equal; TM44 focuses on those that use refrigerants for cooling, and parts of other cooling methods such as cooled decks/ceiling slabs or those using aquifers for cooling.

The 12kW figure is a good rule of thumb, making any building owner or manager with a system of that scale subject to TM44. It is important to note that this applies to single large-scale units with an output of 12kW and to individual units that together reach or exceed 12kW.

When is a TM44 necessary?

Inspections timings are relevant here since each mandatory inspection must take place within five years of the previous one. According to TM44 guidance, the initial inspection must satisfy the following criteria:

Any system that began service on or after 1^st January 2008, must have undergone an initial inspection within five years of the date service began.
Systems whose output exceeds 250kW must have undergone inspection no later than 4^th January 2009.
Systems with a service start date prior to 1^st January 2008 and whose output exceeds 12kW must have received inspection by 4^thJanuary 2011.

From 6 April 2012, all TM44 air-conditioning inspection reports have been required to be lodged on the Ministry of Housing, Communities & Local Government Energy Performance of Buildings Register where a report and certificate are generated. Accredited assessors and members of the public may access this site to view and download their TM44 certificates and reports.

Why is TM44 important?

There are several benefits to having a TM44 inspection. Firstly, a company can avoid penalties for non-compliance. These penalties are costly, inviting a £300 fine per offence – meaning either a non-complying building or multiple units inside a single structure whose combined output is more than 12kW, and if an organisation fails to supply a copy of their inspection report within seven days of request by an enforcement authority, they can incur an additional fixed penalty of £200 per building or unit. Enforcement Officers can check at any time whether a building or unit is compliant.

TM44 is an excellent data gathering opportunity about a major source of utility costs, offering insight on how to:

Improve efficiency
Reduce electricity consumption
Decrease operating costs
Diminish carbon emissions
Reduce maintenance needs
Improve controls and settings
Identify technical flaws

The report will also highlight opportunities such as:

Improvement to operation
Improvements to replace less efficient systems
Replacement of oversized systems (scale of the system relative to cooling load)

When viewed with these gains in mind, TM44 can be thought of a necessary process that yields significant benefits down the line.

Securing your TM44 with EIC

The EIC team were among the first to receive UK accreditation for the delivery of air–conditioning inspections and actively follow any legislative changes so they can keep businesses ahead of the game.

The team can also provide Wrap Reports as standard, offering an overview of essential report findings including reference pictures, additional relevant data and a complete asset list of equipment found.

Alongside this extensive experience, clients will receive additional complimentary intelligence in other areas of sustainable improvement. EIC’s expertise in other fields like Energy Contract Procurement and Intelligent Building Management will position organisations to undertake other sustainable development projects seamlessly, with guidance and security.

For a full breakdown of EIC’s compliance services, and how your organisation can acquire TM44 Certification, get in touch with the EIC team here.

¹(2002/91/EC)

²(2010/31/EU)

³(Statutory instrument 2012 N0 3118)

SECR: Why use EIC?

Posted on 1st April 202015th February 2021 by Josh Ellison

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 1^st 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 1^st2019, 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.

Time to focus on SECR compliance

Posted on 8th December 201915th February 2021 by Amy Coniff

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 1^st April – 31^st March, your first energy and carbon disclosure data collection will be for the period covering 1^st April 2019 – 31^st 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.