Peter Webster – Jumping through the hoops of energy reduction legislation

Peter Webster – Chief Executive of Corps Security

Peter Webster, chief executive of Corps Security, a regular blogger, discusses the Energy Savings Opportunity Scheme. He writes: “As one of the estimated 9,000 ‘large enterprises’ within the UK, Corps Security has just completed and submitted its Energy Savings Opportunity Scheme (ESOS) audit to the Environment Agency. I’m delighted to say that we beat the 5th December 2015 deadline by a comfortable margin, but having gone through the process and seen at first hand the time, trouble and expense of doing it, I’m left with the feeling that it was nothing more than fruitless exercise that is indicative of the type of red tape that is becoming all too common on the subject of energy saving and carbon reduction.

“Not surprisingly, ESOS is necessary due to our membership of the European Union (EU) and was announced by the government in 2014 as its initiative for implementing Article 8 of the EU Energy Efficiency Directive. I should point out that Corps Security is neither pro or anti our membership of the EU and we are far from flippant about the need to reduce our impact on the environment. In fact, we are proud of our ISO 14001 certified environmental management system (EMS) and were one of the first companies within our sector to use low carbon vehicles.

“However, I’m sceptical about the government’s claim that, as well as making a significant contribution to its Energy Efficiency Strategy, ESOS will drive the take-up of energy efficiency measures amongst businesses, thereby enhancing their competitiveness and contributing to the wider growth agenda.

“Why? The simple answer is that after completing the compliance process, there’s no statutory requirement for companies to undertake any activity as a result of the recommendations. The government is effectively hoping that having gone to the time and expense of complying, companies will take subsequent action. However, I think that this is a false expectation and that many organisations will simply do the bare minimum.

“Although the government pledged to minimise the administrative burden placed on businesses, there’s little doubt that the audit process is a significant drain on resources. I have the sense that because compliance is limited to companies that employ 250 or more staff, or that have an annual turnover in excess of around £42.5m and an annual balance sheet total of around £36.5m, it doesn’t matter and an attitude of ‘they can afford it’ prevails. My view is that while resources are being spent on ESOS, they’re not being used in more worthwhile and productive ways.

“Government figures suggest any action taken as a result of findings from ESOS audits could lead to an average 0.7 per cent saving per enterprise, which is expected to provide a net positive benefit to the UK of between £0.8bn and £3bn, with a central estimate of £1.9bn between 2015 and 2030. While this might sound impressive, I believe that forward thinking organisations will already be doing all they can to reduce any harmful effects they have on the environment by developing processes to lower energy, reduce waste and pollution, and mitigate the risk of emergency situations. As there is no legal requirement for companies to act upon the findings of an ESOS audit, those that have no interest in taking action will simply not bother.

“Then there’s the issue of what will be done with all of the information that is collected. Given that we live in an age of ‘big data’, it is surprising that there will be no central repository for all the information that is collected from the 9,000 or so companies undertaking the process. This is another missed opportunity, as crunching the numbers would provide a valuable insight into how energy is being used. It could also help to identify the types of measures that could be implemented in the future to help other organisations reduce consumption.

“Enforcement is another big concern. Qualifying organisations that did not complete an ESOS assessment and notify the Environment Agency by 5th December are at risk of enforcement action, including the possibility of civil penalties. However, it is possible for the Environment Agency to waive or modify enforcement action and penalties relating to non-compliance, and for the first compliance period it is not expecting to take enforcement action for late notification, provided it is received by 29th January 2016.

“In fact, according the Environment Agency’s own figures just 4,000 eligible businesses had declared compliance by 5th December, while another 2,500 had notified it that they intend to comply by 29th January 2016. This leaves thousands of eligible UK companies still to advise the Environment Agency and are potentially open to significant penalties for non-compliance – currently a fine of £500 per day for non-submission up to 80 days and then potentially a £50,000 fine. The question is are they bothered?

“ESOS is just the latest in a range of schemes designed to reduce energy usage and its success depends on whether the boards of the nation’s largest organisations decide to act upon the recommendations outlined in their audits. If they do, all well and good, however, I can’t help thinking that many will simply not bother and ESOS will become just a tick in a box”.

Corps Security Website

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