Clean Growth Strategy: What does it mean for businesses?

The long-awaited Clean Growth Strategy has been released on 12 October, and sets out ambitious plans by the UK Government on how to accelerate clean growth, and meet national climate goals and the fifth carbon budget.

The 165-page document covers policies and proposals ranging from green finance, building energy efficiency, low carbon heating, electric vehicles and renewable technology. Having green growth at the centre of an industrial strategy aims to boost the economy and productivity across the country, whilst protecting the climate and environment for a sustainable future.

First scheduled for release in 2016, the EU referendum vote and the 2017 General Election meant the plan was published ten months after expected. It changed its name from  Emissions Reduction Plan to Clean Growth Plan, and finally to Clean Growth Strategy. But does it meet the expectations of growing the nation as a low carbon economy, and what exactly does it mean for businesses?

Business and Industry make up 25% of all UK emissions, and the plan looks to “develop a package of measures to support businesses to improve their energy productivity, by at least 20%by 2030”. Here is an overview of a few of the measures aimed to benefit the productivity of businesses in the UK.

Energy efficiency

The plan states that the Government is determined to unlocking potential energy savings for businesses, to improve their productivity and competitiveness. Their analysis has shown that through investment in cost-effective energy efficiency technologies, up to £6 billion could be saved in 2030. They aim to do this by improving the energy efficiency of new and existing commercial buildings and simplifying the requirements to measure and report on energy use to help identify where to reduce the cost of energy bills. They will build on existing schemes such as the Energy Savings Opportunity Scheme (ESOS), and consult on new reporting frameworks to replace others.

The ambitious Industrial Energy Efficiency scheme will look to help large companies install measures to cut their energy use and bills, including decarbonisation road maps for seven industries that are operationally carbon intensive, such as chemicals, paper and pulp, farming, and food and drink. New technologies such as carbon capture usage and storage (CCUS) and switching to low carbon fuels such as sustainable biomass will be required by industry to meet carbon reduction targets, with Government providing the framework for doing so.

Low-carbon transport

Transport makes up 24% of UK emissions, and to meet targets, “almost every car and van will need to be zero emission by 2050”. An Automotive Sector Deal will be developed in collaboration with Government and industry to increase the uptake of zero-emission vehicles, and to ensure a continuing thriving automotive sector. The plan boldly aspires for the UK to be one of the best electric vehicle (EV) charging networks in the world. This means that workplaces will have additional charging support.

Business and their supply chains will be reviewed to find more cost-effective options for shifting more freight from road to rail. Urban areas will be addressed to include low emission rail freight for deliveries, with zero emission last mile deliveries and reduced Heavy Goods Vehicle (HGV) journeys to deliver significant fuel and emissions savings.

Natural resources

As negotiations continue following the vote to leave the EU, improving our natural environment and delivering better outcomes means land and agriculture have a significant role to play. The future of farming will be supported by Government through a new agri-environment system, maximising the value extracted from resources and ensuring minimal negative impacts. £99 million will be invested in new research and technology, focusing on agri-tech, land use, greenhouse gas removal technologies, waste and resource efficiency.

A new Resources and Waste Strategy will be published to position the UK as a world leader for competitiveness, resource productivity and resource efficiency, with an ambitious goal to transition to zero avoidable waste by 2050. Government will also launch a “Green Great Britain”, working with businesses and civil society week to promote clean growth.

Innovation

The plan states that £162 million of public funds will be invested in research and innovation in Energy, Resource and Process efficiency. This includes driving down the cost of new technologies and increasing the commercial viability of them. £14 million of further investment will be made to the Energy Entrepreneurs Fund to support innovative energy technologies and processes, to boost competitiveness, improve job growth and promote new technologies in low-carbon businesses and supply chains.

The Clean Growth Strategy has shown the Government’s ambitious plans and policies to grow a low carbon economy in the UK. As we wait to see whether this bold vision lives up to expectations, businesses are already on track to meeting these goals with sustainability at the heart of many core strategies.

Could the EU NFRD have prevented the BBC pay scandal?

In July 2017, the BBC made headline news when the sheer scale of their gender pay gap was revealed. The revelation that the top 7 earners were men, and that only a third of the top 96 earners were women, shocked many and came in for fierce criticism. After all, if gender inequality is currently woven into the BBC’s framework, a trusted and publicly-funded organisation who are perceivably far more accountable to stakeholders than the majority of their competitors, then it begs the question; how can companies be urged to be more transparent in the way they treat their employees?

How did this gender pay gap slip under the radar for so long? Gender inequality across salaries has long been something spoken about, however, it has traditionally been hard to pin point where it is happening. There is a relatively obvious solution to this problem. Companies that report on non-financial issues, such as diversity and gender equality, can address them, as the matter is out in the open and organisations can be held to account. Indeed, issues such as these may well be something that companies themselves do not realise, until they are forced to report on it and are thus made aware of it. The key therefore to solving this issue is to ensure that organisations increase transparency to their stakeholders.

There are several ways in which large companies in the UK are now being driven into transparency, one of them being the EU Non-Financial Reporting Directive (EU NFRD). Introduced by the EU in 2014, the EU NFRD aims to improve the transparency and consistency of non-financial disclosures by large businesses.

Click here to download the free EU NFRD guide

 

What is EU NFRD?

The EU NFRD was introduced by the EU in early 2014 and transposed into UK law in late 2016. The EU NFRD applies to all financial years starting on or after 1st January 2017. It is now mandatory for public interest entities (including listed companies, insurance undertakings and financial institutions with over 500 employees) to report on five key matters:

  • environmental
  • social
  • employee
  • human rights
  • anti-corruption and bribery.

Specifically, companies will be required to report on (for each of the five non-financial matters) policies which they have set out and the outcomes of the derived policies. Where no policies have been pursued, the company must offer a full explanation for why this is the case. This Directive compliments a number of other non-financial reporting-focused legislative requirements introduced over the past few years such as the Modern Slavery Act. However, questions remain around how companies will choose to comply with the legislation and whether the NFRD will be enough to make transparency and accountability an integral part of large businesses.

How can the EU NFRD bring about transparency?

As companies begin to start (or improve) reporting on non-financial matters, and transparent reporting becomes the norm, rather than exception, within the business community, it will start to become obvious which matters organisations have addressed and which they haven’t. The way these key non-financial matters are addressed is very important because it could begin to have a catastrophic impact on companies’ reputation.

Companies have the choice to reveal all or state why they are not reporting on specific matters, however it’s not likely to reflect well on a business if it they freely admit they are doing nothing to tackle social issues, such as gender inequality. Given the qualification thresholds, as public interest entities begin to report on these matters, other non-qualifying companies risk being left behind and also risk a reputational shadow being cast upon them thanks to assumptions made by the public based on their choice not to disclose. It is essential that companies understand and address the requirements in the EU NFRD to ensure transparency of reporting, and ultimately, tackle these non-financial risks.

 

To learn more about the EU NFRD, what it requires and who is caught by it, download a copy of our free EU NFRD guide here

Could ESOS be the key to unlocking the UK’s Demand Side Response capacity?

We are currently living through a time of transition. As the world begins to go about designing and implementing the types of policy required to keep global warming below 2°C, one inevitable area of significant focus is how we are going to decarbonise our energy supply.  

There are several legacy issues to be addressed, such as the intermittency of many renewable technologies, the inefficiency with which we use energy and the vast differences between peaks and troughs in demand. There’s no quick fix and it’s going to require a combination of factors to solve these problems. However, progress is already being made on all fronts. For example, the types of storage technologies required to address intermittency are becoming more price competitive by the month. Similarly, the EU and UK governments have introduced a raft of policies aimed at improving energy efficiency and smoothing out demand cycles.

Indeed, the Energy Savings Opportunity Scheme (ESOS), the UK’s response to Article 8 of the Energy Efficiency Directive (EED), has made it mandatory for large companies to conduct energy audits at least once every four years, whilst the National Grid has made plain its views on the growing importance of Demand Side Response (DSR), where users are financially incentivised to shift or reduce their electricity use at peak times, for softening peaks and filling in troughs in demand.

It will be intriguing to see how these policies intersect. Well-designed policy interventions should not only achieve their objectives, they should complement interventions in the same area. The benefits of ESOS and energy auditing are relatively obvious – greater understanding leads to improved efficiency and ultimately reduced expenditure on energy, coupled with a decrease in carbon emissions – but could a hidden benefit be an uptake in DSR?

First, it’s necessary to explore the barriers to the uptake of DSR. Unsurprisingly, the main barrier to DSR uptake is a lack of understanding, both about DSR itself, but also about how businesses power their own operations. To explore the technical and economic feasibility of DSR, the first step should be to gather information such as the patterns of electricity consumption across all assets, who manages the assets, the local grid infrastructure, and the on-site technical and operational constraints. Unfortunately, the reality is that the majority of businesses do not have access to this kind of information, nor do they have any intention of gathering it.

Enter ESOS. For those less familiar with the steps required to comply with ESOS, it involves measuring and profiling 100% of the energy consumed by a business over 12 months, auditing at least 90% of that energy to identify energy saving opportunities and obtaining sign off internally by a board-level director and externally by a Lead Assessor. Whilst the effectiveness of ESOS Phase 1 was debated, it did at the very least shine a light on the glaring gaps in energy management at a board-level for first time for many large organisations. With ESOS Phase 2 beginning to ratchet up, over 10,000 of the largest organisations in the UK will be profiling energy consumption and undertaking audits again at some point over the next 2 years.

This presents a massive opportunity to increase both awareness and uptake of DSR. There’s no reason why a well-thought out and executed ESOS assessment couldn’t provide all the detail required to develop a full business case for DSR. This will, however, require some forethought. For example, if you’re a business searching for a contractor to conduct your ESOS assessment, it’s worth specifying what you need out the final report, as a budget ESOS assessment is unlikely to provide the depth of energy analysis required to progress DSR. Conversely if you’re carrying out ESOS assessments, exploring DSR may not be your top priority given it doesn’t necessarily improve energy efficiency, it can merely shift patterns of consumption.

Ultimately, we shouldn’t be looking to address the challenge of decarbonising our energy supply in silos. Tackling the full range of barriers to decarbonisation will require a multi-pronged approach with as much emphasis on improving efficiency and smoothing the fluctuations in consumption as other considerations such as increasing the overall renewable capacity. Only by looking at the problem holistically will we be able make the transition to a decarbonised electricity supply both efficiently and effectively.

 


Don’t leave ESOS to the last minute – get in touch with our Approved Lead Assessors today by phone 0207 048 0450 or email esos@carbonsmart.co.uk

Early bird discount for those who begin ESOS Phase 2 assessment in 2017

Post ESOS: When to act

In our opinion, businesses should act now to make compliance with ESOS phase two straightforward and cost effective.  Of the 100+ business we worked with on ESOS compliance – only a handful had robust enough data to meet the requirements of the regulation ahead of our work with them.  Moreover, only 6% (369) of the 10,000 organisations required to comply with the ESOS regulation in 2015 were covered by ISO 50001, which meant they didn’t need to conduct ESOS audits.

This tells us that many businesses were not prepared enough to comply with the requirements of the ESOS regulation in phase one – we fear that inaction in the coming 24 months could mean businesses have to overspend to achieve last minute compliance for ESOS phase two as well.

Act now and avoid the rush by introducing:

  • A Smart Data approach – ongoing data management that will ensure your business has all of the energy data it needs at its fingertips to comply with the next round of ESOS and a performance history that can tell the story of energy efficiency improvements made along the way
  • ISO 50001 – the internationally recognised standard makes it simple for organisations to integrate energy management into their wider approach to quality and environmental management. Businesses that adopt ISO 50001 as a next step will take up the opportunity to manage the roll out of current energy saving opportunities, embed energy efficiency in top management’s strategy and spread the cost of compliance over four years.

Our advice to businesses is to start paving the way for ESOS phase two now, to keep costs down and avoid the sprint to the compliance deadline in four years’ time.

If you are interested in our Smart Data service why not read our SmartPaper written by Aleksandra, one of our in-house data experts.  Or to talk with us about your strategic approach to ESOS phase two and ISO 50001, get in touch with thomas.beney@carbonsmart.co.uk

 

New circular economy package will mean changes for businesses

What is a circular economy?

Circular economy, as opposed to linear economy, tries to optimise usage of materials and resources to minimise the amount of loss throughout their life cycle. It can include ecodesign, industrial symbiosis, recycling and reuse, collaborative economy, new business models, etc.

Circular economy is a great opportunity to reduce emissions and costs, create jobs and develop innovation and technology, as well as reduce raw materials scarcity. In 2014 the EU published a package of targets and measures to develop a circular economy across Europe. This original package was scrapped with the promise that a more ambitious one would follow.

The new circular economy package, released in early December 2015, has disappointingly less teeth than its predecessor in terms of targets: the municipal waste recycling target has gone from 70% to 65% by 2030 and the commitment to reduce food waste by 30% between 2017 and 2025 has been removed altogether. A comparison of the two packages also shows potentially 110,000 fewer jobs will be created.

There is some good news: the new package wants to prevent programmed obsolescence of products – a topic that wasn’t tackled by the previous one. It also encourages more reuse of products like electrical appliances, textiles and furniture. Despite these new adjustments, it is a shame to see that a year of reflection has mellowed the Commission rather than spurred it to greater action.

But how will it affect business across the EU over the next few years?

Product-selling companies will no doubt need to adapt to forthcoming legislation in certain areas like packaging: in its timetable of actions, the Commission included measures on improved date marking on products (to be taken forward in 2017), increased recycling targets for packaging materials as set out in revised waste proposals, action on false green claims (to be taken forward in 2016), and product environmental footprints to communicate environmental information (to be taken forward in 2016 onwards).

The actual products themselves could be required to change, with plans for the substitution of hazardous substances support for SMEs (to be taken forward in 2018), increased recycled content in products and an independent testing programme on planned obsolescence (to be taken forward in 2018).

The package also calls for new incentives and requirements for Member States to provide economic instruments like taxation, so product prices reflect environmental costs.

Despite some disappointing figures, the package still represents a great opportunity for businesses and sets out funding that should help with the transition, and support new projects to come off the ground: important research and innovation funding will become available and the Cohesion Policy funds will provide support to improve production processes, product design and SMEs.

The package will now be reviewed by the European Parliament and European Council along with other legislative proposals to amend the Directive on Waste, Directive on Landfill, Directive on Packaging Waste and Directive on Waste Electrical and Electronic Equipment to reach an agreement over the course of the next year. It is still possible – and to be hoped – that the European Parliament will call for more ambitious measures in its review.

Read the official communication on the EU’s webpage: http://ec.europa.eu/environment/circular-economy/index_en.htm

Sources:
http://www.theguardian.com/sustainable-business/2015/dec/03/eu-circular-economy-plan-waste-targets-weak-critics

http://www.euractiv.com/sections/sustainable-dev/circular-economy-package-waste-job-opportunities-320134

70% of targeted organisations compliant with ESOS by January 2016

The deadline for ESOS has now been and gone: Jo Scully of the Environment Agency has confirmed to Carbon Smart that, as of 5 December 2015, 4000 organisations have notified them of their compliance, and 2500 others have stated they intend to comply by the 29 January 2016. Only a very small number of companies still needing to comply have opted for an ISO 50001 (about 100 only). Added together, these numbers represent about 70% of the companies expected to fall under the ESOS regulation.

This encouraging figure still suggests that about 2500 businesses haven’t submitted anything to the Environment Agency and risk facing fines in the new year. They are also missing out on significant savings opportunities by not identifying areas for improvement. The Environment Agency stated: ‘government has calculated that if businesses covered by ESOS reduce their energy use by just 0.7 per cent, they will save around £250m each year’.

Compliance with the scheme is a good first step, but implementing recommendations is essential to reap the benefits calculated by the government, and cut down on emissions.

Plan your implementation strategy early in the new year to start benefitting from money and emissions savings. We can help you map out the best course for your company and build the business case to implement the right measures.

New Feed in Tariff rate for solar not in place before March 2016?

Since DECC warned us about deep cuts to the Feed in Tariff (FiT) support for solar panels in August this year, we have been waiting to hear what prices will look like from January 2016.

Responses to DECC’s recent consultation on the issue have been prolific and the department still needs to sort through all the responses before they can make an announcement.

However, any negative changes to the FiT scheme can only take place 40 parliamentary days after they are announced. Since Parliament has planned to adjourn over Christmas, and again in February, the new rate might not be in place before end of February or beginning of March 2016.

We are now of the opinion that there will be only a small reduction in the tariff on 1st January 2016, in line with the quarterly reduction we have been used to.

If that is indeed the case, prices in January could be better than anticipated and the current mad rush to install before the end of the year may be a short lived reaction.

Get in touch with us at 0207 048 0450 if you are unsure what to do about your solar energy project.

New ESOS enforcement date ‘gives’ more time to companies that need to comply

Companies that are still working on their ESOS compliance or are struggling to find a Lead Assessor still available before 5 December can panic a little less: the Environment Agency stated in its last newsletter that companies falling under the scheme should ‘Not normally expect [the EA] to take enforcement action for late notification provided it is received by 29 January 2016’.

This effectively means companies can get more time to comply between 5 December and 29 January. It is worth noting that companies planning to comply after 5 December should still get in touch with the EA by that date via their online portal to provide information about their expected compliance date. Companies choosing to comply via an ISO 50001 management system will have until 30 June 2016 to achieve it.

The Carbon Smart team and Lead Assessors will be able to provide support to companies that are still looking to comply after the deadline on 5 December – get in touch with us now at 0207 048 0450 or at info@carbonsmart.co.uk if you haven’t started your ESOS response yet.

Access the Environment Agency’s newsletter via this link for further details

ESOS: Environment Agency says do as much as you can before 5 December

Two months away from the deadline, a large number of companies still haven’t gone through the steps to compliance with ESOS, and many face the risk of not hitting the deadline on 5 December.

A project manager at the Environment Agency stated in reply to a query sent by Enistic that ‘Where an organisation has done something rather than nothing before the deadline then this is obviously going to be more favourable to their case when we are reviewing it. We would recommend that organisations do as much as they can before the deadline even if they know they will not be in a position to comply fully by 5 December’.

In light of this comment, businesses that haven’t started complying should look into appointing a Lead Assessor and going through the first stages of measuring their energy consumption sooner rather than later to have, at the very least, initiated something before the deadline comes.

For those companies that have already clicked the ‘submit’ button, it’s a good time to think about how to reap the benefits of the compliance exercise. Now that you know how much energy your company consumes and how it could improve, there are different ways you can make the most of this information. We can help with implementation of recommendations, managing your data on an ongoing basis for future compliance or reducing other environmental impacts in your organisation like waste and water. Get in touch with us to discuss the possibilities and start a plan for the new year.

DECC proposes deep cuts to Feed in Tariff support

DECC have announced a consultation to review the Feed in Tariff (FiT) scheme, by which the government provides financial support for renewable technologies – most notably solar panels.

Currently the government pays the owner of the system for each kilowatt hour of electricity it generates; the owner also benefits from a tariff for each kilowatt hour they export, not to mention reduced energy bills. The subsidy varies dependant on the size of the installation.

According to DECC, the uptake of solar energy has been so great that funds set aside for this scheme will be exceeded sooner than expected, hence a consultation has been launched to revise this financial incentives downwards.

To date the feed in tariff has dramatically reduced the payback time of a solar array; consequently it has significantly stimulated uptake in the market, reducing the cost of the panels themselves. The consultation threatens heavy cuts in January 2016 and the possibly of wholesale tariff removal swiftly thereafter. Given the rates proposed from January 2016, the payback for a typical system will rise from 6 years to more than 10 years.

In addition, the export tariff (the price paid for unused electricity currently exported to the National Grid) is also under scrutiny, potentially increasing payback times further.

Solar energy remains a sensible proposition for businesses irrespective of policy and subsidies, as it provides clean, free electricity not subject to typical energy market fluctuations. But it is clear that to reap the best financial return businesses need to act quickly to secure support under the current arrangements and rates.

 

 

ESOS compliance is more straightforward with the Greenstone-Carbon Smart partnership

Since the announcement of our strategic partnership in March, Greenstone and Carbon Smart have assisted a growing number of organisations with reporting under the UK’s Energy Savings Opportunity Scheme (ESOS). The joint ESOS proposition has ensured consistent end-to-end ESOS compliance for both organisations’ clients.

ESOS is a mandatory energy audit compliance scheme set up by the UK government requiring qualifying organisations to measure and audit the total energy usage across all buildings, transport and industrial activities. By 5 December 2015, qualifying organisations are required to have carried out their ESOS assessments and notified the Environment Agency.

Using ESOS dashboards, Greenstone Enterprise software users are able to define what needs to be measured under the scheme and prepare data before an energy audit. Carbon Smart’s approved Lead Assessors then carry out the practical energy audits required under ESOS, compile the required energy audit report and associated evidence pack and register compliance on behalf of organisations with the Environment Agency. Once an audit has been carried out, Greenstone users can manage their data on an ongoing basis, manage their energy saving opportunities, set targets, analyse data outputs and store evidence to prepare for future reporting.

Matthew de Villiers, CEO at Greenstone comments ‘Through this partnership we have been able to provide our clients with a seamless ESOS reporting service. We are delighted to have partnered with Carbon Smart who have extensive experience in energy audits and bring in the expertise necessary to enhance our capabilities in this area.’

Julie Craig, Principal Consultant at Carbon Smart comments ‘Developing this partnership has made the compliance exercise more straightforward for our clients. Greenstone’s software makes collecting the energy data much easier for clients and provides us with a solid set of numbers that we can base our energy audits and evidence packs on.  It make the whole process quicker and more economic for clients that need to comply.’

 

ESOS Compliance steps – Click here to find out how Carbon Smart and Greenstone can help you

ESOS compliance steps Carbon Smart Greenstone image

Energy audits directive & ESOS: have you considered your group’s other entities?

The Energy Savings Opportunity Scheme (ESOS) regulation is the UK’s response to Article 8 of the EU Energy Efficiency Directive (EED). The EED is a European-wide Directive which mandates that all large EU organisations must undertake a number of steps, including performing energy audits, once every four years on 100% of the energy the organisation consumes. All qualifying organisations will have to comply with Phase 2 by 5th December 2019. Whilst the EED applies to every EU Member State, there is a degree of flexibility for Member States in terms of qualification criteria, the percentage of energy which must be audited and so on. Requirements therefore vary from one country to another, which can make it difficult for pan-European organisations to understand their what they need to comply with and how best to proceed.

If your group has activities across the EU, you may want to coordinate across your European entities, to evaluate where you need to comply, assist those qualifying regions with their response and ultimately ensure your organisation meets its legal obligations in each market. Some of the key variables from Member State to Member State include:

Compliance threshold

Whilst the qualification thresholds are broadly based on the financial performance or headcount of the business, the specific threshold and relevant organisational boundaries for compliance are different from one country to the next, so it is worth checking whether you are caught in multiple Member States. For example, whilst in the UK you need to meet the qualification thresholds with regards to headcount and financial performance, in Sweden you qualify if you are part of a group which meets the qualification thresholds elsewhere. Similarly, the UK legislation requires the turnover to be over 50M Euros and the balance sheet to be over 43M Euros to be caught. France only requires one of the two, for instance.

It is also worth noting that in France, unlike in the UK, aggregated numbers are the ones taken into account to determine whether organisations need to comply. So, for example, a consolidated set of accounts is used in France, not in the UK. In countries with similar requirements, separate entities that are below the threshold should still check whether they are caught, as they could be above the threshold when aggregated with other entities in the same country.

Energy audits

The percentage of energy that needs to be audited varies: 90% in Germany and the UK, versus 65% in France this time round, going up to 80% next time.

Requirements for the energy auditor specify certain levels of experience and sometimes a qualification from a national body. Spain requires a certificate from the Entidad Nacional de Acreditacion (ENAC), whilst registration with the nominated body BAFA in Germany is not mandatory. Outside of the UK, many other Member States don’t mention the need for a Lead Assessor in their legislation.

In all EU countries, large organisations with an ISO 50001 management system are exempt from carrying out energy audits – with the caveat, in some countries like Italy, that the management system itself includes energy audits.

Reporting compliance

Regardless of whether you are supporting entities in other EU Member States, your compliance response should be done on a country-by-country basis. In the UK, your organisation can choose whether it wants to aggregate with other UK entities that have the same parent organisation as you, and report together to the Environment Agency.

We have worked with many clients to:

  • Review European-wide operations, engaging internal stakeholders to obtain relevant headcount and financial information
  • Assess which Member States the organisation needs to comply in based on our in-depth understanding of the intricate requirements of each country
  • Designed a compliance plan laying out the specific obligations in each country, the different routes to compliance (i.e. ISO 50001 vs energy audits), key deadlines, penalties and the required steps to achieve compliance.

We are already offering our support to large companies with entities across several EU Member States. We can help you too to navigate your way across compliance in different EU countries. Get in touch at 0207 048 0450 /  esos@carbonsmart.co.uk to find out what you need to do to comply. 

Look out for the Heat Network Regulations this year

Heat suppliers should be on the lookout this year for a little-known piece of legislation – the heat network regulations.

Heat suppliers for communal heating/cooling networks such as sheltered housing, halls of residence or rented accommodation with a shared source of heat, have until the 30th December to take action under the new Heat Network Regulations. Shopping centres and hotels with sub-let space like fitness centres or restaurants may also be caught.

They must provide information about their communal heating/cooling networks to the National Measurement Office. Supply that is part of a package or a service charge is also covered by this new legislation.

With the reporting deadline only weeks away, heat suppliers need to check whether they fall within scope and to gather the relevant information if they do. Failure to do so before the deadline will lead to penalty fines.

If you think this may apply to you, or if you’re not sure, get in touch and we will help you to get it right.

Find out more information about the Heat Network Regulations in our SmartPaper.

Carbon Smart announces partnership with software provider Greenstone to facilitate ESOS compliance

Carbon Smart are pleased to announce a new collaboration with Greenstone, provider of non-financial reporting software, to support clients throughout ESOS compliance.

The new Energy Savings Opportunity Scheme (ESOS) regulation requires large organisations to measure their total energy consumption over a period of 12 months and audit 90% of that energy before the end of 2015.

Greenstone’s recently launched ESOS reporting functionality is a great addition to its existing non-financial reporting software, enabling clients to easily organise their data, prepare for energy audits and keep all of their actions in one place. The Carbon Smart team are working with existing Greenstone clients and those new to software to ensure gathered energy data complies with the regulation, as well as supporting clients to find energy saving opportunities and assist businesses to take voluntary action to implement the suggested improvements.

Julie Craig, Principal Consultant at Carbon Smart, says: ‘As energy and compliance experts, we are already supporting a number of businesses to comply with ESOS and as such we know that data capture is a long term challenge. By joining forces, Carbon Smart and Greenstone offer a seamless service to clients ensuring a straightforward approach to compliance.’

Are you aware of the UK Waste Regulations update?

The UK Waste (England and Wales) Regulations 2011 have been amended and the changes will enter into force on 1st January 2015. Here are more details to ensure you are up to date.

What has changed?

All businesses must ensure paper, metal, plastic and glass are collected separately. The amended regulations state that this new responsibility only applies where the act of separating these materials is necessary to ‘ensure, facilitate or improve recovery’, and where it is ‘Technically, Environmentally and Economically Practicable (TEEP)’ to do so.

What does this mean for you?

You will have to work with your waste service provider to ensure that they can separate those different strands of waste where reasonable and appropriate. Carbon Smart can work with you to determine the best way for you to do this.

The basics

  • You need to ensure glass is kept out of your mixed recycling stream.
  • If you produce lots of paper waste, you could add that as one of your separate waste streams.
  • Cans, tins and plastic packaging are fine to collect in one sack or bin, because this does not affect their ability to be recycled, further down the line.
  • Food and food contaminated waste will need to be kept separate.

Call Carbon Smart for advice on complying with this new regulation

New energy legislation for large organisations

The Energy Savings Opportunity Scheme, the UK government’s response to the 2012 EU Energy Efficiency Directive, requires large organisations to measure their total energy consumption for a period of twelve months starting before the end of 2014.

With the end of the year fast approaching, it is worth making sure whether you’re in or out, and what you should do now if you are covered by the legislation.

All large organisations have to register with the Environment Agency and ensure they are collecting the required data to start measuring their total energy consumption in the coming months. This should include buildings, industrial processes and transport. It requires more energy data to be collected than CRC or mandatory GHG reporting schemes.

A large organisation for ESOS, has:

  • 250 or more employees, or
  • An annual turnover of at least £39 million and an annual balance sheet of at least £33 million.

Once you have measured your energy consumption, you will have to carry out energy audits for 90% of the energy used across your business, write a report to be signed off by an Approved Lead Assessor and ensure it is approved by the Environment Agency before 5th December 2015.

With a vast amount of experience in supporting businesses to achieve legal compliance, Carbon Smart is ideally placed to guide you through ESOS in an effective way. Whether you simply need someone to help you tick the boxes or could use this opportunity to look into cost-effective energy consumption changes, we can offer our knowledge and experience to build your own, tailored, ESOS response.

Contact us now to discuss your ESOS requirements to be ready before December.

Know thy energy: ESOS and it means for your business

The new legislation – The Energy Savings Opportunity Scheme (ESOS) – is the UK Government’s proposed approach to leading large enterprises through comprehensive and regular energy audits.

 

The world’s energy conundrum is a tough one: on the one hand energy dependency is substantially increasing, whilst on the other hand, resources are diminishing and the need to reduce consumption is becoming more urgent. Energy efficiency should therefore be a fundamental consideration for UK business, both in the quest for energy security and in limiting the impact of climate change.

With the aim of establishing concrete objectives to improve energy efficiency, the EU passed the 2012 EU Energy Efficiency Directive (2012/27/EU), which stipulates a 20% energy efficiency target to be met by 2020 by member states. Crucial for the private sector is Article 8, which requires all member states to introduce a mandatory requirement for all large enterprises to undertake energy audits every four years.

The Energy Savings Opportunity Scheme (ESOS) is the UK Government’s proposed approach to implementing the requirements set out in Article 8, and is currently being established by the Department of Energy and Climate Change (DECC). The scheme sets out a broad legislative framework, supported by best practice guidance, which aims to lead large enterprises through comprehensive and regular energy audits.

Under the proposed mandatory energy audits, large undertakings will be required to measure their entire energy consumption over the course of a 12 month period and to determine their most significant energy usage. Organisations will also be required to include assessments of the following three areas: key buildings, transportation and industrial/ commercial processes.

The objective of the regulation is to ensure that the companies which are considered to have the largest energy use understand all aspects of that use in relation to their business: from supply, transformation, transmission and distribution to consumption. Through acquiring the detailed knowledge on energy use, it is hoped that those organisations will make better decisions in terms of good energy management.

Importantly, this month, DECC are due to announce the requirements of the legislation, determining the ESOS compliance criteria. Leading up to the announcement, we are advising all businesses to determine whether they are within the ESOS scope and if this is the case, to start to consider where the gaps may be. We are also urging companies not to treat the legislation as another layer of environmental red tape on top of the existing regulation, but to take the opportunity to examine their energy use and make savings.

There are great benefits of comprehensive energy audits or management systems. Understanding the entirety of your business’s energy system will allow you to identify areas of inefficiency, wastage and perhaps even vulnerabilities within your operations. Being able to address these areas effectively will enable you to minimise your resource consumption, reduce costs, whilst at the same time improving your environmental credentials.

Read our ESOS briefing SmartPaper to learn more about how ESOS will affect you. If you would like to have any further information on energy or environmental management systems or how to comply with ESOS, please contact our London or Manchester based offices for further advice.

Workshop series on greenhouse gas reporting: conversion factors, regulation and guidance

n 2013 Defra appointed Carbon Smart to lead a review of the UK’s conversion factors for greenhouse gas reporting. The goal of the review was to improve the usability of the factors through simplification and the development of an online tool to better navigate them. The resulting changes to the factors themselves and the way they are presented will affect any organisation that reports on emissions in the UK.

As part of the overhaul, Defra have relaunched their environmental reporting guidelines and finalised the mandatory greenhouse gas regulation for quoted companies.

business seminarThese positive actions aim to propel both greenhouse gas disclosure and low carbon operations forward, as the UK strives to reach ambitious carbon reduction targets.

Central to all of these changes is the need to simplify greenhouse gas disclosure and keep reporting as easy to follow as possible, freeing up organisations to take real action.

If you are new to greenhouse gas reporting, or haven’t quite kept up with the changes to Defra’s guidance, the new regulation and the 2013 conversion factor format, book a place to one of our workshops to enjoy a masterclass with members of the Carbon Smart team.

The workshops will be held in:

London – 26th November 2013 (Location and time TBC) click here to reserve a place

Manchester – 28th November 2013 (Location and time TBC) click here to reserve a place

Edinburgh – 29th November 2013 (Location and time TBC) click here to reserve a place

Places are limited and will be confirmed in due course with exact locations and timings.

CRH, the building materials group tops the Smart Assurance Index for the first time

Carbon Smart: Launch of 'The smart assurance index 2013'Carbon Smart has published its fourth annual Report and Index on the state of sustainability assurance, which ranks the assurance of the FTSE 350 companies, highlighting the top performers and those still with work to do. CRH, the buildings materials group has topped the Smart Assurance Index for the first time, ending Vodafone’s 2 year reign.

Assurance is the third party verification of companies’ reported sustainability data and procedures, which aims to reduce the risk of material error in their corporate sustainability reports. 280 of the FTSE 350 companies don’t carry out assurance, which begs the question: Where is the value in assurance?

  • With the introduction of MGHR (Mandatory Greenhouse Gas Reporting) coming into affect this year, these FTSE 350 companies are legally required to report on their carbon and to ensure that their reporting is accurate.
  • There is increasingly greater reputational risk on companies to get their reporting right; with pressure from stakeholders (including clients, investors and environmental campaigners) to be reporting clearly and comprehensively on sustainability performance

Download the Smart Assurance Index to find your place in it and discover more about trends in sustainability assurance for 2013: http://www.carbonsmart.co.uk/opinion/the-smart-assurance-index-2013/

Top companies join our masterclass to ensure carbon reporting is right

You might think that the largest companies need little assistance with their annual carbon reporting, however the extensive changes to Defra’s reporting requirements this year has made even the biggest players take stock.

Sainsbury’s, BP and Coca Cola Enterprises (amongst 40 other private and public sector giants) joined Carbon Smart’s reporting masterclass to understand the practical implications in carbon accounting terms, but also the impact on stakeholders’ perceptions of this years’ reporting.

Andrea Smith from the CDP began proceedings with a whistlestop tour of the new Mandatory Greenhouse Gas Emissions Reporting regulation.  Our discussion with the room revealed that the requirement for organisations to report an organisation-wide carbon intensity metric remains one of the most controversial areas of the new regulation.  In particular, the extractive industries and diverse financial institutions are struggling to find meaningful metrics that represent their organisations’ activities and accurately portray their sustainability story year on year.

Exploring aspects of the new Defra reporting guidelines Ben Murray from Carbon Smart worked with the delegates to tackle the challenge of data collection.  Comparing sustainability reporting to financial reporting, he pointed out, “sustainability reporting, unlike financial reporting, is not a mature, ingrained process with clear communication channels in an internationally understood language; it is a practice that is thus far based on best endeavours across a tangled web of different departments, many of which are not employed to produce sustainability figures.”  Ben’s top recommendation to organisations is to use a widely communicated reporting protocol to highlight the importance of each piece of data collected, and emphasise responsibility for data accuracy in the context of the organisation’s final report.

Rounding off the session; Julie Emmings from Carbon Smart led a technical session on the 2013 conversion factor changes.  Although the changes have short term implications, the long term horizon is that reporting will be simpler and fewer retrospective changes required leaving organisations with more time to get on with carbon reduction action.  One organisation contributed, “No one likes change, but change is overdue; this is a big improvement on the previous approach, cleaner, tidier and more consistent with other international approaches”.  We invite you to judge for yourselves at: www.ukconversionfactorscarbonsmart.co.uk.

The masterclass has clearly demonstrated that with the new legislation, many high profile organisations are keen to get their reporting right first time; putting effort in to clarify the requirements up front.  We would advise other organisations to follow suit and reduce the risk of trying to rectify issues on the eve of a reporting deadline.

If your organisation needs assistance getting up to speed, Carbon Smart offers  a range of reporting training modules, guidance and implementation support, please contact us on 0207 940 8285.

Avoid reporting pitfalls – follow Carbon Smart’s top tips for time efficient greenhouse gas disclosure

More frequently than ever, sustainability metrics are a feature of business decision making from a strategic, financial and reputational perspective. Whether for voluntary or compulsory purposes, greenhouse gas reporting is increasing.

However, increased reporting also means more public scrutiny.  Given the reputational risk, reporting organisations can ill-afford to get their environmental declarations wrong.  On the other hand, those responsible for sustainability reporting (unlike those typically responsible for financial reporting) are often conducting multiple job functions; reporting may be just one facet of working life, which can divert much needed resource away from the real task at hand; sustainability action.

Carbon Smart have worked extensively with organisations reporting both voluntarily and for compliance purposes and we know that time committed during reporting preparation and other key moments in the journey pays dividends.  Follow our top reporting tips to get your data in line, on time.

1.       Know your conversion factors from the beginning, start by reading the guidance in Defra’s frequently used conversion factors at: www.ukconversionfactorscarbonsmart.co.uk/

Defra’s conversion factors have undergone a complete overhaul for 2013.  Some organisations using the Defra conversion factors will need to rebaseline their data to align with the new approach so make sure your organisation is prepared for the adaptations that will be required.

 2.       Take time to fully understand your organisational boundary: clear definition up front improves consistency and ensures relevance down the line

Many organisations struggle to report consistent results year-on-year because their organisation has a complex structure and each year best data collection endeavours cover different subsidiaries, brands or operations.  Clearly understanding what you should and are including within scope (or need to include in terms of regulatory reporting) can significantly reduce confusion later on.

3.       Establish your reporting protocol to enable transparent and consistent calculation methodologies

Without clear, transparent documentation of reporting methods, organisations small and large may struggle to replicate and align calculations across different business divisions or between years.  Organisations seeking external assurance for carbon data may enjoy an easier assurance audit if the clarity and transparency of their processes is documented and adhered to.

4.       Collect data early, and regularly, it pays dividends in terms of the completeness and accuracy of reporting

It goes without saying really, but the sooner your data collection begins the sooner it will end and there will be plenty of time to ask questions, sanity check increases and decreases in data and generally make sure your reporting is accurate.  Hasty data collection and calculation can leave reporting littered with assumptions or even errors; this might mean complex data restatements in future and dilution of the integrity of your sustainability messages.

 5.       Push for high quality data (i.e. direct fuel usage over distance travelled or spend data) this reduces the need for assumptions in calculations and ensures reporting accurate enough to inform business action

Whilst time is rarely a luxury in reporting, making sure that the data you request / collect is of the best quality available can make the difference between business action and inaction.  GHG reporting based on spend information for example will need to be extrapolated to calculate emissions, this may undermine confidence in decisions based on the reporting.  Calculations based on primary data will be viewed as more reliable.

 6.       Communicate widely and frequently to ensure reporting turns into action rather than accountancy

A frequent pitfall for organisations is reporting their sustainability data quietly and neatly in a subsection of their annual report without engaging with investors, employees and other important stakeholder groups.  Make the most of all the time and effort committed to reporting, by communicating at every available opportunity and engaging your whole organisation in the sustainability journey.

Getting all these things right means your readers will understand your achievements better; their attention will be focused on your results not the shortcomings of your reporting.  Getting them wrong risks the reporting being the story, not the report.

Keeping up to date with the rapidly moving reporting landscape is difficult, but a little more preparation would certainly, in our experience, stand most organisations in good stead.

Julie Emmings, Senior Consultant said, “At Carbon Smart we make sure to follow our own tops tips with each of our reporting organisations.  The launch of the new Defra conversion factors, for example, has wide ranging impacts on all of our clients.  Our current focus is on taking the time to brief clients on the changes that need accommodating over the next reporting cycle and helping them understand how to communicate these changes to stakeholders. Our clients will benefit greatly from this level of preparation (as well as the simplifications to the new Defra conversion factors) in the future.”