Your Sustainability Shopping List

We are almost at the end January and there is already a growing list of activities and aspirations for the proactive Sustainability Manager in 2019. It’s now time to focus on the priorities of a Sustainability Manager.

If you are looking for inspiration, and want to freshen up the tired strategy from previous years, read on. Before reading Acclaro’s top 5 sustainability priorities, we should remind you that underpinning all of these areas is the need for good quality data to be captured and interpreted. Without which little can be achieved.

1. Developing a Social Value Approach

Globalisation offers many positives, but the drive for cheaper goods and services has affected not only, supply chains but also the communities that companies work within.

Social Value is currently measured on the value and impact of the corporate, rather than the benefit derived by the community. Some are scrambling to measure a monetary value. Assessing the benefits that supply chains can bring, or engaging with communities we operate within, is surely the first logical step.

We suggest, take a step back. The first stage is to understand what already takes place across the business coupled with assessing the needs of the community in which you operate, (or serve if you are a public-sector body). Capturing this information will help to develop a cohesive programme of engagement. This can be structurally managed across internal, supply chain and community programmes. There are many benefits to gain from a social value programme. This includes an increasing number of tenders requiring some form of disclosure of the value you create, so now is the time assess what your organisation can bring to society.

2. More accurate GHG Supply Chain Emissions

The reporting of greenhouse gases provides an ever-greater understanding of how our organisations impact climate change. However, when it comes to affecting change, it can be difficult to understand which areas of a business to target that will yield the most effective results. Carbon emissions from the supply chain is being increasingly scrutinised. Therefore, understanding these burdens and your ability to target them effectively is critical.

Using economic models based on annually updated economic data can map supply chains and associated emissions. The data from industrial Supply and Use tables is combined with emissions factors to create a model that maps national emissions linked with the spend of an organisation. This maps the entire organisations economy using matrix algebra to link environmental and economic data. Save yourself time and move away from the bottom up approach that sees us plot only a small proportion of supply chain emissions very inaccurately. There are other ways of doing it, and you can have a greater impact on climate targets by using correct data to being with.

3. Energy Audits and Reporting

Carbon emissions and energy consumption remain some of the biggest risks and contributors to climate change. The move towards nearly zero carbon buildings is accelerating with standards being developed as part of the wedges associated with science based targets.

The first stage should always be to minimise emissions and the energy being consumed through an effective understanding of how and why energy is used the way it is. Regulations are asking for public disclosure allowing for greater scrutiny and the need for verified and accurate information to be disclosed.

Significant quantities of information exist, but translating this into usable data and tangible outcomes from dynamic systems is the challenge – but can yield significant savings in excess of 15% energy reduction.

4. Environmental Risk Management

Whilst often initiated and implemented as part of management systems, the recent driver for climate and biodiversity related risk evaluation has come from the investor community. The premise is simple and equates to understanding the environment’s impact on you. These disclosures are targeted at mainstream investors and are intended to help them assess whether climate risk is appropriately priced in to their valuation of your company, enabling investors to make more informed decisions

Techniques and approaches for the scenario testing are still in development, but this year will see an increase in the understanding of the risks and early stages of validating the implications. Early movers will benefit from the opportunities available.

5. Building a Responsible Business Culture

Finally, this is the piece that joins the dots together. Business culture is changing and the expectations of new employees and our major consumers are dictating different terms – we now have a language of Purpose.

Responding to the societal pressures, the increased level of data, reporting pressures and investor requirements will necessitate a different response from organisations. And that culture needs to extend beyond the four walls of the sustainability team, into business and towards supplier management and sales programmes.

This is a long journey, that connects together forward risks, social benefits and environmental impacts, a develops a long-term strategy. Ultimately it will mainstream your role, but a concept we need to grapple with is, will it make it redundant? In time, perhaps some day-to-day operational parts. But there will always a need for strategic thinking and forward planning.

Acclaro Advisory wishes you a belated Happy New Year, and we hope to see you at many an event to discuss the direction you are taking for a sustainable future.

Good luck with putting  your priorities as a Sustainability Manager into action.

What are you talking about?

So what is Consumption -Based GHG Reporting?  ‘Consumption-based’ carbon accounting, as the name suggests, calculates carbon footprints based on your consumption of goods and services. It is based on input-output analysis, a robust method of modelling economies. It maps nationally published data on the flow of money, into, around and out of a country via industry sectors. Originally used to study economics, it can be adapted to environmental needs by assigning ‘environmental burdens’ such as kilograms of carbon emissions to each industry. This gives you a value for kilograms of carbon emitted per pound sterling (or any other currency) spent in any industry or on any product. This can be combined to describe whole companies.

And we don’t do this already?

The method used by the majority of people to calculate carbon emissions at the moment is called ‘process-based’ carbon accounting. It is essentially a shopping list of items and activities which get assigned a carbon factor, combined to find the total carbon footprint. This could describe your energy or waste processes, for example.

There are a number of problems with this method. The data provided is often incomplete leaving gaps and underestimating the footprint, by as much as 87% in some studies. This means your reporting is inaccurate and you cannot reduce your carbon footprint because you can’t see that it’s there. It is also a very time-consuming method with lots of individual calculations that make mistakes easy to make.

How is this new approach any better?

Where ‘process-based’ methods take a long time, varied data, and huge amounts of it, ‘consumption-based’ is much simpler. Once the model is constructed your data is fed into the model and – after some fancy matrix algebra – get your entire carbon footprint. Because it uses both client data and national data sets it always calculates 100% of your carbon footprint

There is also more you can do with an input-output carbon footprint. As well as the usual detail, the final figure can be picked apart to show hot-spots for carbon in your supply chains down through 5 tiers of spending. For complex companies this allows unrivaled access to your carbon burdens and how to mitigate them. It also expands your influence and capacity for change beyond your company, and to top it off tells a great do-good story.

Get in touch

The Acclaro approach is to take its clients on a journey that provides long term solutions and stream lines burden. We have experience of developing long lasting relationships that continues to save clients time and money whilst delivering results. If you are interested in setting up the consumption based model, or hearing how we work, get in contact and we can discuss whether this approach is right for you.

This blog forms part of a series of articles on consumption-based GHG reporting. Stay in touch for further guidance and information.

Through the Making Policy Clear Series, Acclaro Advisory informs clients of policy and regulatory changes around energy, environmental and social issues. Series 1 is focused on the energy and carbon regulatory schemes which impact business energy cost and reporting responsibilities. Now let’s take a look at the Energy Savings Opportunity Scheme  (ESOS).

For a detailed breakdown on the full extent of the impact on your organisation, steps to comply and where Acclaro’s expertise can support. Contact us now to arrange a consultation.

What is the Energy Savings Opportunity Scheme (ESOS)?

ESOS is a mandatory energy assessment and energy savings opportunity identification scheme for large enterprises operating in the UK. It aims to help organisations to increase energy efficiency and reduce energy cost by identifying cost-effective measures to improve business energy performance. Ultimately lowering carbon emissions.

This scheme was put in place as a response to European Union law which required all EU states to transpose and implement Article 8 (4 to 6) of the EU Energy Efficiency Directive (2012/27/EU) into regulation suited to each country. This has been transposed in various forms across the EU member states with key elements remaining similar in each country. The ESOS Regulation 2014 gave effect to the scheme with the first compliance (Phase 1) which ended on 5 December 2015.

We are now in the second compliance period (Phase 2) which will last until 5 December 2019. Compliance with the scheme runs every four years.

Phase Qualification Date Four Year Compliance Period Compliance Deadline
1 31 December 2014 From 17 July 2014 – 5 December 2015 5 December 2015
2 31 December 2018 6 December 2015 – 5 December 2019 5 December 2019
3 31 December 2022 6 December 2019 – 5 December 2023 5 December 2023
4 31 December 2026 6 December 2023 – 5 December 2027 5 December 2027

Will ESOS affect me?

All large undertaking operating in the UK (business, not-for-profit, university etc.) except Public Sector undertakings, which on 31 December 2018 meet either one of the criteria below:

ESOS Criteria June 19 Update

* This includes an overseas (non-UK registered) organisation with a UK registered establishment meeting either Criteria 1 or 2. Here, the only UK operating establishments need to comply.

N.B. Bank of England rates applied for qualification period of ESOS Phase 2.

We understand that organisational structure is not always this clear. If you are unsure of where your entity fits, or you are unsure if it meets the requirement to comply please get in touch for clarity.

How will the Energy Savings Opportunity Scheme (ESOS) Affect Me?

  • ESOS runs over four-year phases; Phase 1 ended on 5th December 2015 and Phase 2 will end on 5th December 2019.
  • Organisations must assess the total energy use across the business. This must cover a full 12-month period that includes 31st December 2018.
  • Non-compliance can result in financial penalty up to £90,000 and reputational damage.
  • Compliance can provide a series of benefits to the organisation which include but are not limited to;  Enhanced understanding of energy use across the organisation.
     Enhanced understanding of the parts of the business which consumes the most energy and carries the highest energy cost.
     Uncover and highlight deficiencies in data and information measurement and monitoring processes.
     Identify simple solutions to improving energy efficiency, such as behaviour change and engagement.
     Identify cost savings and activities to lower carbon emissions.

How Do I Comply?

1. Assess the total 12-month energy use across the organisation.

For example, Energy used in your buildings, industrial processes and for business-related transportation (company travel via cars, equipment/product transport via trucks, etc.) All assets/activities must be accounted for.

2. Identify areas and sites of significant energy use.
3. Choose your route to compliance most suitable to business goals.
4. Appoint your ESOS Lead Assessor, who is qualified to review your compliance route and reports.
5. Evidence opportunity for energy efficient measures in areas or sites of significant energy use and have the reports signed by the ESOS Lead Assessor and company Director.
6. Notify compliance to the administrator, the Environmental Agency.

How Acclaro Can Help?

The Acclaro Energy Programme is an end-to-end energy management package that helps your business to get to grips with its energy consumption from all angles. Our programme helps you adapt and address responsibilities of energy efficiency as a business, whether cultural, technical or financial.

At Acclaro, we possess vast experience in ESOS compliance, energy efficiency and reporting with a variety of clients. Our Energy Team assists clients through expert advice and detailed energy audits, providing opportunity for further energy reduction when in-house teams can no longer identify.

The final countdown to ESOS will soon begin, so get in contact with us now. Our experienced team help you through compliance and provide the best approach to fit with your organisation’s goals and aspirations.

 

NB This Blog was updated on 19th June 2019

The Countdown to ESOS Phase 2

With so much currently happening: Brexit negotiations, new policy frameworks SECR, end of CRC and FiT… the list goes on; it’s hard to believe that there are only 12 more months to comply with the next phase of Energy Savings Opportunity Scheme (ESOS). We are on the countdown to ESOS Phase 2.

Energy Savings Opportunity Scheme (ESOS) is a mandatory reporting regulation that requires large undertakings to audit their energy use. The key word in this scheme is opportunity. The aim is to identify opportunity to save energy and potentially cut related energy costs.

Yes! It has already been 4 years. We are officially in the last 12 months to comply.

While ESOS phase 1 may be in the distant memory of the corporate world, it remains fresh in the minds of Consultants, Energy Managers and Lead Assessors. Also, ever present in the mind of the Environment Agency’s (EA) own auditors, the introduction of ESOS requirements in 2014 was chaotic. As a result, many companies struggled to complete the scheme before the first compliance deadline 5th December 2015.

During phase 1, over 2700 companies were forced to send notifications advising of their need for late compliance to the Environmental Agency. However, even with the resulting deadline extension into the first quarter of 2016, many organisations were ultimately fined for non-compliance.

The UK regulators continue to conduct ‘Compliance check audits’ for Phase 1 ESOS while companies should be preparing for phase 2.

Lessons Learnt from Phase 1

  •  Poor quality energy data
  •  Poor quality energy audits including due diligence due to poor quality data
  •  Poor quality reports due to lack of detail
  •  Lack of Early Action taken compounded by the availability of Lead Assessors

In 2018, it was reported that 15 businesses had been issued in civil penalties of up to £45,000 for non-compliance. While several other businesses received non-compliant designations without financial penalty.
Standards are expected to be considerably higher for phase 2

Are you ready?

Don’t leave choosing your assessor until too late. As the 12 months moves on it will be more challenging on the supply of auditors and Lead Assessors available to work with you.

Research suggests that few companies have started to secure the support of Lead Assessors for the fast approaching ESOS Phase 2 compliance deadline on 5th December 2019. Its time to actively support now to avoid repeating the bottlenecks and other challenges of phase 1. The countdown to ESOS Phase 2 is on!

What has changed since Phase 1?

In short, nothing has changed with regards to the regulation. Compliance dates remain the same for Phase 1 but have been updated to reflect the new Phase. The regulation will remain in place unaffected by the UK leaving the European Union.

If the size and structure of your organisation has changed since the first compliance period, then it is best you re-assess your organisation against the qualification criteria.

Who Must Comply?

Companies have grown, merged and evolved since 2014 which could mean that they are now eligible for compliance. For those who are new to ESOS…

If your organisation has maintained its size (as a large undertaking) for at least two consecutive accounting periods but has reduced in size since it remains eligible to comply. However, for organisations which were SME’s for two consecutive accounting periods, but has changed in December 2018, these would not be required to comply.

Even more so you must understand your organisations’ legal corporate structure when assessing the qualification.
All large undertaking (as defined in the Companies Act 2006) except Public Sector organisations, which meet any of the following criteria must comply with ESOS:

1. ≥250 employees
2. Annual turnover >£44mil (€50 mil) and, Annual balance sheet total >£38mil (€43mil)*
3. Part of a Corporate Group undertaking (overseas company) that meets one of the other criteria.

Your organisation will be assessed by these criteria as the ESOS qualification date – 31st December 2018. You may still be eligible to comply if your organisation is close to either of these criteria. Contact us for a consultation if you are unsure about your eligibility.

* Using the Bank of England spot exchange rate at the close of business on qualification date 31 December 2018.

Routes to Compliance

Energy Assessments and notification of compliance must be completed by 5th December 2019 to comply with ESOS via:

• ESOS Energy Audit
• ISO 50001 Certification
• Display Energy Certificates
• Green Deal Assessments

Assessments must consider all business energy consumption for buildings, industrial processes and transport over 12 consecutive months including qualification date 31 December 2018.

Does ESOS apply to our Europe based businesses?

If you are a multinational organisation with businesses throughout Europe, you may also need to comply in these territories. We have extensive experience with auditing for the transposed Article 8 of the European Energy Efficiency Directive; the ESOS equivalent in EU countries. Our lead assessors and consultants have worked in and with assessors in Europe to ensure our clients effectively comply with the regulation and meet business objectives. Make sure your business has the Countdown to ESOS Phase 2 in its sights!
To understand more about the energy audit compliance requirements for EU sites have a look at our Making Policy Clear – EED Article 8 or get in touch.

Acclaro Advisory Expertise

The Acclaro Energy Programme helps organisations adapt for and address the very visible responsibilities that sit within energy efficiency. We aim to deliver the right result for our clients. That’s why we start our programme by finding out your drivers and barriers to making energy interventions. Understanding your concerns means we can deliver recommendations that really fit the way you work. We’d be happy to assist you in taking action whether mandatory or voluntary to manage risk, reduce cost or enhance business reputation.

NB This blog was updated 19th June 2019

Through the Making Policy Clear Series, Acclaro Advisory informs clients of policy and regulatory changes around energy, environmental and social issues. Series 1 is focused on the energy and carbon regulatory schemes which impact business energy cost and reporting responsibilities.

Increased Climate Change Levy – Why is CCL increasing?

At end of July 2019, the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme is set to be closed.

The CRC is one of the two energy taxes that target large energy-intensive organisations. This tax is levied to encourage energy efficiency in business. The end of CRC will result in a significant increase to the Climate Change Levy (CCL) to recover the loss of the CRC energy taxation revenue.

Who pays CCL?

The second energy tax is to encourage energy efficiency in business is the CCL.
Exempt from CCL are organisations using less than 1,000kWh electricity and less than 4,397kWh gas, per month.

The end to CRC will simplify the various levels of compliance and reporting regimes for many organisations. While energy and carbon reporting will remain, the additional administrative burden of CRC will be significantly reduced, as it is likely that the organisations affected will also be compliant to mandatory greenhouse gas reporting.

How will the increase to CCL Affect Me?

  1.  For organisations where energy consumption is not a major component of business expenditure, the increase in CCL rates may not create a major impact on overall business costs. However, energy cost will increase from 1st April 2019.
  2.  If you are covered under the Climate Change Agreement (CCA) scheme, the CCL rate increase will have little to no impact on business energy cost, with the increase more significant to natural gas and LPG costs in comparison to the previous years’ costs.
  3.  If you are currently part of the CRC scheme, the energy tax is ultimately transferred to the increased CCL rates. From April 2019 energy bills will increase. Organisations will be required to submit their last CRC report by the 31 July 2019 and surrender allowances for the last time by the end of October 2019. The new Streamlined Energy and Carbon Reporting (SECR)1 framework will require organisations to continue to calculate and report the total annual energy consumption and carbon emissions.
  4.  Typically, this change will add between 2 – 4% to the business energy bill.

More on the impacts of SECR can be read in part one of this series here.

How can I prepare for this change?

CCL is added to energy bills by energy suppliers, therefore there are no changes necessary for consumers to accommodate the increased taxes. However, these organisations should consider ways to reducing business energy cost to minimise the impact of the increased tax.  Energy efficiency is widely recognised as the most effective way to reduce energy consumption and costs. The CRC scheme was designed with an aim to incentivise improving energy efficiency and reducing carbon emissions in large energy intensive organisations.  Well run energy audits can uncover several opportunities for energy efficiency. However, if not combined with effective implementation, the true value of these opportunities can be lost.

How Acclaro Can Help?

The Acclaro Energy Programme is an end-to-end energy management package that helps your business to get to grips with its energy consumption from all angles. Our programme helps you adapt and address responsibilities of energy efficiency as a business, whether cultural, technical or financial.  At Acclaro, we possess vast experience in CRC, CCA, energy efficiency and reporting with a variety of clients. Our Energy Team assists clients through expert advice and detailed energy audits, providing opportunity for further energy reduction when in-house teams can no longer identify. Our energy programme is designed to support you through a series of phases forming parts of your energy efficiency journey; from understanding energy consumption to embedding energy efficient practices into day-to-day business.

As organisations portfolios, data collection, emissions methodologies and reporting procedures vary significantly, it is important to plan before the change occurs. We are setting up discussions with a range of clients to further understand how the closure of CRC will impact their organisation. If you are keen to learn more, please contact us.

Our team can create a detailed action plan utilising your current processes to help streamline and reduce the impact of this transition. For a breakdown on the full extent of the impact to your organisation, steps to comply and where Acclaro’s expertise can support, email us now at info@acclaro-advisory.com to arrange a consultation.

Through the ‘Making Policy Clear’ Series, Acclaro Advisory will inform clients of policy and regulatory changes around energy, environmental and social issues; bringing clarity to governance, compliance and targets so you can get on with regular business activities. We dismantle the complexities of new and amended legislation and standards in a way that will help you meet your requirements today and be ready for new ones tomorrow.

This first series is focused on the energy and carbon regulatory schemes which impact business energy cost and reporting responsibilities. Our team has pulled together key information and insight on what is expected to occur and how organisations can prepare. Part one of this series will focus on the Streamline Energy and Carbon Reporting (SECR).

We would be happy to provide a detailed breakdown on the full extent of the impact to your organisation, steps to comply and where Acclaro’s expertise can support. Email us now at info@acclaro-advisory.com to arrange a consultation.

Streamline Energy and Carbon Reporting (SECR)

What is SECR?

The Streamlined Energy and Carbon Reporting (SECR) framework will be in effect from April 2019 as part of a new policy landscape. The framework has been designed to streamline and reduce complexity in the carbon and energy reporting regimes while broadening the scope for reporting compliance. This is set to impact approximately 11,900 companies (PCL) and 230 Limited Liability Partnerships, up from the approximately 1,200 required to report carbon emissions.

SECR will require large companies to report their annual energy consumption and carbon emissions in Annual Director Reports alongside financial data.  The new framework comes ahead of the closure of the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, set for the end of July 2019. The Climate Change Levy (CCL) and CRC are two energy consumption taxes on large energy-intensive organisations currently levied to encourage the businesses to consume energy more efficiently. The end of CRC includes an increase on the Climate Change Levy (CCL) rates as a re-balance measure to recover the loss of the CRC energy taxation revenue.

At Acclaro, we feel that the new requirements can have a significant impact on many organisations and can ultimately increase their administrative burden. This can be said mainly for the many organisations which did not participate in similar schemes but are now captured in the new compliance scope. Moreover, the accompanying changes to the energy tax regime will have a significant impact on energy costs. On the other hand, increased energy cost and increased transparency for investors and other stakeholders will encourage more companies to be accountable and responsive to the need for effective energy management and carbon reduction to meet UK climate change targets.

Who needs to Comply?

The compliance structure of SECR is very similar to the compliance criteria of ESOS. The need to comply with the new framework will be based primarily on financial or employee thresholds.

An organisation falling near to these thresholds will need to clearly explain why they do or don’t need to comply with the regulations. They will also need to maintain an evidence pack which could be subject to audit by the Environment Agency. Additional specific exemption conditions apply under limitations of data and prejudicial disclosure concerns; only expected in exceptional circumstances.

How will SECR Affect Me?

There are a series of minimum reporting requirements that must be met. For example:

1. If you are already reporting under mandatory Greenhouse Gas (GHG) reporting there is little change except for the inclusion of annual energy use and energy efficiency action in your company annual reports.
2. If you are reporting and purchasing credits in the Carbon Reduction Commitment (CRC EES). The new SECR regulation will replace the CRC reporting framework with much of the direct costs of CRC shifted to the increase on Climate Change Levy¹.
3. If you comply with ESOS. It’s likely that most organisations who have had to comply with the Energy Saving Opportunities Scheme (ESOS) will be required to report additional information under the new scheme. This will introduce annual public disclosure of energy use, energy efficiency action and scope 1 & 2 carbon emissions.
4. If you don’t fall into either of the current reporting schemes. It is likely that some organisations, such as public authorities and charities, normally exempt from mandatory energy and carbon reporting requirements, will fall into the broadened scope of this new framework. It is critical for such organisations to act now in preparation for the 2019 reporting requirements.

¹More on the impacts of increased CCL rates can be found in part two of our Making Policy Clear – Energy and Carbon Series here.

How Do I Comply?

Compliance varies by organisation and its current reporting regime. Reporting will be based on the company’s annual reporting cycle and is required through the company Annual Reports. Typically, Director Annual Reports must include:

1. Annual UK energy use covering all UK sites, including business travel.

2. Annual scope 1 and 2 greenhouse gas emissions, including an intensity metric and methodology. Scope 3 emissions can be reported voluntarily.

3. An overview of annual energy efficiency action taken in the financial year. Companies can voluntarily disclose ESOS action as a part of this report.

4. Where practical, annual global energy use and greenhouse gas emissions (if applicable).

How Acclaro Can Help?

We expect to see more details on the framework and updated to legislation in the coming months, with an impact to reporting in 2019. As organisations portfolios, data collection, emissions methodologies and reporting procedures vary significantly, it is important to plan before the roll out of the framework occurs.

The Acclaro team has a breadth of experience in ESOS, GHG and sustainability assessments with a variety of clients from IT technology companies to Opera theatres and public bodies. Our clear structured approach supports compliance regimes and we help to validate and back up your results, so you have a solid sounding board for your sustainability reporting. Our team has assisted many companies to adapt for and address responsibilities that sit within energy efficiency. Our clients have benefited from investor interest, improved recruitment and client retention. We can help you turn compliance risk into opportunity.

We are setting up discussions with a range of clients to further understand how SECR will impact their organisation.

If you are keen to learn more, please contact us. Our team can create a detailed action plan utilising your current reporting regime to help streamline your transition into this new framework.

Today we launch the Acclaro Energy Programme, and with it comes a series of free guidance that opens up the world of energy management and policy. Today we begin with a jargon busting look at UK energy and carbon compliance.

The energy and carbon industry is so full of reporting acronyms, that sometimes it’s hard to keep up.  July (2018) brought yet another to the doors of the UK corporate world; SECR – Streamlined Energy Carbon Reporting. For the many businesses currently navigating the energy and carbon regulatory regimes, adding another to the mix should not be too difficult to handle. In many instances, reporting requirements utilise the same energy data in a variety of ways to translate into business energy and carbon. But, as new regulations are added, the harder the names roll off the tongue.

Let’s talk a bit about what currently exists.

CCL
Climate Change Levy is first of the two energy taxes targeted towards energy-intensive organisations. Introduced in 2001, the tax is applied to electricity and gas bills for all businesses and public sector organisations that pay the standard rate of VAT. Exempt from CCL are businesses using less than 1,000kWh electricity and less than 4,397kWh gas, per month. No reporting is required by business energy users. CCL seems to be here for the long haul.

MGHG
Mandatory greenhouse gas reporting (MGHG reporting), introduced in 2013, requires all UK quoted companies to publicly report their greenhouse gas emissions on all forms of energy used annually. At present this policy only affects around 1200 companies. The main focus is on transparency of carbon data for carbon management and reduction.

CRC
The Carbon Reduction Commitment Energy Efficiency Scheme, this one doesn’t exactly roll of the tongue, but luckily it is also known as the CRC scheme. CRC is second of the two energy taxes targeted towards large energy-intensive organisations. This tax and reporting mechanism, introduced in 2016, is levied to encourage eligible businesses and public sector organisations to consume energy more efficiently. Over 5000 undertakings report annually to the Environment Agency. The reports cover UK energy use and the purchase of allowances to cover their carbon emissions. The scheme phases cover emissions generated over UK financial year; March 2019 will mark the last phase – the end of the CRC scheme.

ESOS
Energy Savings Opportunity Scheme (ESOS) introduced in 2014; another which seems to be here to stay, is a mandatory reporting regulation that requires non-SME undertakings to audit their energy use. The key word in this scheme is opportunity; the aim is to identify opportunity to save energy and potentially cut related energy costs. However, whilst this scheme requires an element of reporting, the minimal nature of the reporting does not include public disclosure. In fact, unless formally audited, the compliance reports are not reviewed by the regulator, Environment Agency.

SECR
Streamlined Energy and Carbon Reporting framework, as the name suggests is aimed to simplify and bring together elements of the above reporting schemes into one clean process. This framework will be in play from April 2019 with a wider compliance qualification. Similar to MGHG reporting, it will be implemented through disclosure in annual directors reports with Companies House. SECR will replace CRC reporting, with a combination of MGHG and ESOS reporting elements. These changes will add value to robust reporting mechanisms and the opportunity to quantify ESOS outputs with energy efficiency action and carbon management into one streamlined approach.  It is estimated that the number of companies which will be required to comply with SECR will change from the 1,200 covered in MGHG to 11,900. This includes all quoted and large unquoted companies with some exceptions. In other words, many companies complying with ESOS will be scooped up into the SECR framework.

Our team of energy and sustainability experts have extensive experience in navigating the policy landscape and delivering reporting that meets regulatory requirements and business objectives. To find out more about the above reporting mechanisms and how they may affect your business, please get in touch.

The Acclaro Energy Programme helps organisations to adapt for and address the very visible responsibilities that sit within energy efficiency. We’d be happy to assist you in taking action whether mandatory or voluntary to manage risk, reduce cost or enhance business reputation.

Plastic waste pollution: bad resource efficiency

The WWF published its latest Living Planet Report last Tuesday. It’s not just a thorough analysis of global data on biodiversity; it’s also a landmark in how leaders connect abstract, data-heavy sustainability concepts with the drivers that really motivate people. An important theme is that human wellbeing, economic performance, and social development all depend on “the web of life that sustains us all”. It says responding to this is our generation’s greatest challenge and opportunity. But there’s one big problem: the way we use resources is wrong. So how do we improve resource efficiency?

Consumer demand is an increasing burden on natural resources and habitats – and global population will approach 10 billion by 2050. International development and increased spending is bringing large cars, plentiful diets, and an abundance of waste.

Rising consumption globally is more than the planet can bear, and is straining material and natural resources. That threatens our food, biodiversity, materials, energy, soil, water, and atmosphere. There is a growing scarcity of key materials, such as copper and lead. It’s pushing procurement prices up and limiting their availability in many nations.

Overall, humanity’s Ecological Footprint has almost doubled since 1969, largely attributable to a carbon footprint which has quadrupled since the 1950s. Not everybody has an equal footprint and there are enormous differences between countries, particularly those at different economic and developmental levels. Humanity’s Footprint is around 20.1 billion global hectares (gha), or 2.8 gha per person. However, the Earth’s biocapacity is only 12.2 billion gha, or 1.7 gha per person. That’s an ecological overshoot: people use the equivalent of 1.7 planets to support their activities.

What does overshoot mean?

How can humanity be using the capacity of 1.7 Earths, when there is only one? Just as you can withdraw more money from a bank account than the interest the account generates, it’s possible to harvest renewable resources faster than they regenerate. Agricultural operations destroy tropical forests faster than newly planted forests elsewhere can grow. The global fishing industry and uncontrolled pollution are damaging aquatic ecosystems without allowing enough time for their regeneration. This can only continue for a limited time, as the resources become depleted. Similarly, CO2 emissions exceed the rate at which ecosystems can absorb them, and cannot be fully sequestered on Earth. Ultimately the overuse of resources will lead to a shortage of materials. Unless we can improve resource efficiency, we’ll need to find alternatives or reduce consumption.

Resource Efficiency as a Solution

Businesses of all sizes should consider resource efficiency across their operations. Ultimately, the demand for goods drives the global market that we are all part of. So, businesses should consider not only the goods they consume, but also the products that they produce for consumption.

Mapping major resources can be tough, but it’s an empowering start. Once identified there can be a move towards one of three options:

  1. finding alternatives with a lower impact or ideally a renewable source;
  2. being efficient with the resource which will see marginal gains; or
  3. a total reduction in consumption.

Drivers pushing businesses to do this with carbon and energy already exist. Companies are switching to alternative providers, setting efficiency targets in line with their growth, or they are reducing outright. In many cases, all three can be approached simultaneously. That’s encouraging, but, as the WWF report highlights, there is still a fundamental issue with the way we use resources. Businesses need to consider more and more what they consume and how they can make changes.


Acclaro Avisory runs the Sustainable Facilities Management Index. It considers resource use among a set of ESG criteria to set a sustainability standard for outsourced facilities management.

On Thursday 8 November, the Sustainable Facilities Management Index will launch its 2018 results at the RICS building in Parliament Square. We’ll be hosting speakers from RICS – and we’ll provide a free breakfast. Join us for the free event.

The National Audit Office report on packaging recycling, (published 23rd July 2018) highlights real concerns involving UK waste that is exported overseas for recycling: there is little visibility on what happens with it, and a suspicion that much of it ends up dumped in landfill.

Such exports increased six-fold between 2002 and 2017, as a result of insufficient domestic recycling capacity to meet demand. The majority was exported to China – but as of January 2018, Beijing has banned almost all plastic waste imports. That creates a new challenge: who should we send our waste to now, and can they prove they will recycle it?

The report also reveals that the government does not account for undetected fraud and error in its recycling records. Although official data indicates that 64% of packaging was recycled last year, the figures rely on estimates that are not sufficiently robust, despite the financial incentive for packaging producers to fail to report the volumes of material that enter the market, and for recyclers to overstate the quantities they handle.

The government will have the opportunity to address these concerns when it develops its new strategy for waste and resources, which it expects to do later this year. However consumers should be aware that sending harmful waste to be recycled isn’t always an effective way of eliminating it, and instead look for long-term solutions to cut back on their waste.

As the scandal of the UK’s plastic rubbish being dumped overseas deepens, businesses need to check if their data systems record reliable waste data, and if they store proof that waste contractors verify proper disposal. Smart businesses are saving costs and proving credibility by retaining the value of their materials with circular economy principles.

Acclaro Advisory can provide the expertise to help your organisation achieve this, so please get in touch if you would like to explore your options.

I often find myself advising clients and friends about the benefits of electric vehicles (EVs). With drastically reduced emissions compared with any other car, they are miles ahead in sustainability terms, and have recently become a genuinely viable personal transport option with improved range and expanding charging infrastructure nationwide. I strongly believe in these technological advancements to improve our sustainability as a society, and today I get the keys to my own EV.

Almost everyone I have shared my news with has sung the praises of EVs with me, but they haven’t joined the family yet. There is only one other EV in my reasonably sized social circle, and that is a company-sponsored car rather than a personal investment (not that companies shouldn’t be investing in EVs for their fleets!).

I understand why – they still seem very new, not quite as capable as their fossil-fuel counterparts in mileage, and the idea of ‘charging’ a car does take some getting used to. It is strange to sit in their silence as you drive, and there are so many questions and misunderstandings about them. Our society is not used to this technology, so it makes many people uncomfortable. I guess carbon reduction starts at home.

For my personal circumstances it was a no-brainer. I unfortunately live just too far away to make public transport viable, and although I have used lift-sharing websites to try and reduce my personal impact these websites, much like EVs, are a bit niche so I usually end up commuting alone. Although not as prolific as fuel stations, public EV charging points are increasingly common. There is one outside my local gym, a 2-minute drive from my house, and another at Wokingham Council offices near my workplace – as well as multiple other charge points in between, so it is no less convenient for me to use these as to fill up at a pump.

In hard numbers, commuting in an EV will cut my daily transport emissions by more than half (table 1) which is a huge personal win for me. Although not as carbon-efficient as public transport, EVs come very close, and traveling by car rather than bus & train saves me two hours a day in transit, so for my personal circumstances the trade-off is worthwhile.

TOTAL kg CO2e for:

Diesel: 16.97297

EV: 7.242231

Public Transport: 6.463946

Table 1 kg CO2e emitted per day from commuting: (based on km and Defra 2017 carbon conversion factors) 79 km driven per day or 88 km on public transport

Ultimately, however well EVs do commercially it is the carbon intensity of our electricity production that matters. Right now, that is made up of only 30% renewables, and while that has been increasing it’s a way off being legitimately sustainable. I hope that by using my consumer power to show demand for electric vehicles I will be contributing to a UK in which EVs and future sustainable technology is embraced, and its disruptive power used to reduce our environmental impact.