Posts

ESOS – Will you be compliant?

The 5th December 2019 ESOS date is fast approaching! Is your business ESOS Compliant?

It’s hard to believe that we are already halfway through 2019.
There have been a few changes this year with legislation and strengthen intentions around climate action at all levels of industry. For example, we’ve had councils make Climate Emergency declarations, the London Toxicity Charge (T-Charge) has been replaced by the upgraded Ultra Low Emission Zone (ULEZ) and organisations are looking towards Net Zero Carbon buildings and Carbon Neutrality by 2030.

Support for Businesses

At Acclaro we have been supporting our clients on their Environmental Sustainability and Energy Efficiency journeys. At present one of our main focus areas is ESOS. The UK’s opportunity for non-SMEs to recognise and act on energy efficiency improvements. Energy efficiency has been recognised as the premier cost-effective way to concurrently improve energy security, reduce energy costs, reduce carbon emissions, contribute to the overall energy and climate goals and enhance competitiveness.

6 months until the ESOS Phase 2 Deadline!

If you have not already made arrangements for compliance, it’s time to get in touch. Several organisations have started their compliance preparations and audits. But we already foresee a bottleneck as with 2015. So, don’t leave yours to last minute. Act now and make sure you are ESOS Compliant.

To get you started, here’s a list of what you need to do and how we can help.

1. Assess the total 12-month energy use across the organisation.
  • Remember to include at least your energy consumption for December 2018. This ensures you meet one criterion of compliance.
  •  Assess all buildings, UK transport related to your business (company cars / expensed car travel etc), industrial processes.
2. Identify areas and sites of significant energy use.
  • This should be your largest energy consuming assets from the above list.
3. Choose your route to compliance most suitable to business goals.
  •  What are your business goals/intentions?
  •  Are any changes on the horizon?
  •  Do you have specific targets or challenges?
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.
  • These are different for England, Wales and Northern Ireland.

Our experienced team has supported several organisations during phase 1 and have already started phase 2 compliance for our clients. We provide all the support you need from start to finish and beyond compliance.

Examples of our team’s experience with project complexity include:

  • Meeting compact schedules required during the intense phase 1 compliance deadline.
  • Effective audit sampling strategies to meet compliance and business requirements.
  • Successfully managing late compliance for organisations resulting in no financial penalties.
  • Successfully supporting on the Environmental Agency’s post-ESOS phase 1 audit checks.
  • Highlighting and implementing improved processes for phase 2 compliance.
  • Conducting Office, Theatre, Shopping Centre and Research Laboratory audits.

What about my multinational organisation?

Through us, you have access to knowledge and experience on the transposed regulation in the 28 EU countries. We can help you navigate the complex challenge of meeting all variations of requirements of the energy audit obligation.

Our team is up-to-date with the status of the directive across Europe and are equipped to support full compliance and carry out audits.

If you would like to understand these points further or would like advice or support with Article 8 of the EU Energy Efficiency Directive 2012/27/EU, please contact me on +44 1183 273519 or email Erica Hall

In the meantime, have a look at our Making Policy Clear – EED Article 8 article.

Acclaro Advisory provides Comprehensive information in One Location.

You can learn more about the Acclaro Energy Programme which helps you adapt and address responsibilities of energy efficiency as a business.

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.

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 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:

 

* 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 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.

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.

Both client and provider must invest in a long-term relationship to truly harness the potential of timely and specialist support.

While environmental requirements on companies – due diligence, transparency and performance progress – have increased over the last decade, environmental team sizes have rarely recovered from the contraction experienced during the recession. Beyond the sheer weight of the environmental workload, CR managers are increasingly finding that the diversity of skills needed to satisfy the requirements is rare to find contained solely within one team. Outsourcing some or all of the environmental functions is becoming more popular. But to be truly effective, long-term relationships are needed.

The sole “environment manager” within large corporates in the late 1990s – often tasked with an array of activities including health and safety, supply chain management, environmental management, social impact management, communications (if the company engaged in this), quality and community giving – began to be replaced in the early 2000s by a larger team, with more specialised roles.

Even so, the increasing external reporting requirements on large corporates – including the various rankings and the need to produce a complete CR report each year – effectively shut down progress on performance for around three months each year unless data collection and copywriting was outsourced, as well as verification. CDP, DJSI, FTSE4Good and GRI amongst others led to a fundamental shift by connecting the investment and fund bodies with environmental performance data. As reporting requirements became stringent – and a clearer picture of ‘best practice’ more prescribed – some companies struggled to keep up with the new imperatives, now with the additional impetus of potential investor sanctions. Additionally, stand-alone research pieces were commonly commissioned from consultancies, often focussed on a defined issue affecting strategy and frequently inspired by the latest ranking requirements.

Compliance and due diligence obligations also increased over this period, led initially by regulatory pressures and financial penalties, particularly in the US. Overall, outsourced support in this period tended to be piecemeal, with providers called on occasionally on a task-by-task-basis and changed frequently, without investment in a long-term relationship or a deep understanding of the company culture.

As reporting requirements became stringent – and a clearer picture of ‘best practice’ more prescribed – some companies struggled to keep up with the new imperatives,

The economic turmoil of the past decade saw environmental teams cut and a retrenchment in Government policy globally on green issues – but emerging from this came incentives for companies to promote their environmental and social credentials directly – particularly to a new generation more interested in social value, hungry for transparency and well acquainted with the new tools with which that need could be satisfied.

What does this mean for today and the future? Certainly, we can expect that the need for transparency will continue to play a stronger role in environmental progress than compliance alone. For a generation well-schooled in sustainability matters and sceptical of regulatory effectiveness, environmental performance inherently includes aspects of social value, well-being, and value chain impacts.

The skill sets required to deliver this change are becoming more complex requiring a mixture of change management, data analysis, strategic insight, in-depth and targeted two way communications, and operational management. The reporting calendar is still a huge influence, meaning different skills sets continue to be emphasised at different times of the year.

Outsourced environmental teams can provide the right kind of technical support for the time of the year, and give a pool of specialist skills to be dipped in to when necessary. To truly harness the power of an outsourced team – to truly have a ‘team’ – the provider needs to be able to invest in a long-term relationship with the client and become well-versed in the company culture, with their own internal network. Only then can they work semiautonomously, and ensure their work becomes business-as-usual within the client company rather than the dreaded report-gathering-dust-on-a-shelf.

Conclusion

Outsourcing isn’t for everyone and shouldn’t be seen as a panacea to achieve higher rankings scores and deliver better results – the outsourced parties still need to work within the bounds of the strategic direction that can ultimately only be set by the company. If a company is willing to invest in a long-term relationship and truly immerses the provider within the day-today running, an outsourced team can become an invaluable pool of insight and workforce in the face of shifting priorities and constrained resources.

Portfolio Items