The Energy Savings Opportunity Scheme (ESOS) is a legal requirement for organisations of a certain size or value. The scheme is designed to make companies look at how they use energy with a view to improving performance. If your organisation qualifies for ESOS, you have until December 5th to comply or complete your phase 3 reporting.
Over the last few episodes we’ve explored two routes to compliance: Energy Audits and ISO 50001. As we explained, ISO 50001 goes above and beyond ESOS requirements and ensures you don’t have to gather an evidence pack every four years to prove compliance.
However, there are many more benefits to ISO 50001 than just it’s compliance with ESOS requirements. Join Mel this week as she dives into the other benefits ISO 50001, including real world examples from some global brand names.
- Why Implement ISO 50001?
- What are the benefits of ISO 50001?
- Who has found success with ISO 50001?
In this episode, we talk about:
[01:41] Benefit #1: Cost savings – By Improving your energy efficiency and reducing energy consumption, you can save a startling amount. ISO 50001 helps you to put a system in place that will allow optimisation of your energy usage.
[02:20] Benefit #2: Compliance – ISO 50001 can help you comply with the likes of ESOS and SECR. Carbon reporting and legal requirements in relation to it are global, any countries lagging behind on these requirements will soon adopt or create their own in response to the limited time we have left to reduce the effects of the climate crisis.
[02:45] Benefit #3: Reduce your environmental Impact – By reducing energy usage and switching to more energy efficient means, you will reduce your carbon emissions. ISO 50001 also acts as a complementary tool to ISO 14001 (Environmental Management) that many already have in place.
[03:10] Benefit #4: A coordinated approach – Companies, especially large ones, may have multiple systems in place to manage energy. ISO 50001 helps to create a universal framework that can be applied to a whole business.
[03:25] Benefit #5: External Incentives – There may be external benefits that can be gained by proving that you are taking steps to reduce your environmental impact. This could include tax benefits, insurance ect
[04:25] Benefit #6 Informed funding – There is a lot of funding out there to help companies with new green technology. Having ISO 50001 in place will give you a consistent overview of your energy usage, so you’ll be able to make informed funding choices based on where more savings can be made in terms of emissions and general costs.
[04:55] Benefit #7 Track Objectives – ISO 50001 can help you set Objectives and then set policies and procedures to help make those a reality. Those familiar with ISO Standards will know that it’s all about continual Improvement, so you’ll always be making progress.
[05:30] Benefit #8 Credibility – ISO 50001 is an internationally recognised Standard, and is a mark of your credibility. This can be used in marketing materials, displayed on your website, used in Case Studies ect.
[06:35] You don’t have to be a large brand or organisation to Implement ISO 50001. It can be implemented for a business of any size where energy is a significant environmental Impact.
[07:05] Hilton’s success with ISO 50001: One of the world’s largest hotel chains, Hilton was the first global hospitality company to achieve portfolio-wide certification to ISO 50001. The savings have been significant, reducing Hilton’s energy intensity by 20.6% and its carbon intensity by 30.0% from a 2008 baseline.
[07:55] Bentley’s success with ISO 50001: Reduced energy usage by two-thirds for each car produced and by 14% overall for the entire plant, delivering savings of 230 GWh of energy – enough to power 11,500 houses for a year!
[09:37] Hitachi’s success with ISO 50001: Following the Japanese earthquake disaster in 2011, Hitachi decided to introduce “the smart next-generation factory plan”. Following implementation of ISO 50001, the plant reduced 23 % of the contract electricity, 15 % of CO2 emissions and 5 million yen/month of electricity costs.
[10:12] Toyota’s success with ISO 50001: Implementation of ISO 50001 resulted in a reduction in electricity usage which has translated into cost-savings of more than R4.8 million (Over £210,000!) over a two-year period. The company also generated energy savings of GWh 8.15 across its 14 plants, and reduced its GHG emissions by 7,804 tons.
[10:50] Schneider Electric’s success with ISO 50001: The company adopted ISO 50001 certification in order to maximise energy performance. Following the certification, the business’ energy performance increased by 10.5%, with savings totaling £26,500 over 3 years.
[12:15] Want more info on ISO 50001? – Head on over to the isologyhub to get access to a wealth of ISO 50001, and energy management tools
For those interested in ISO 50001, we’re offering a free copy of the Standard to anyone who signs up for Implementation with us before the 16th June.
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Today, we’re joined by our resident Carbonologist David Algar to discuss SECR.
What is SECR?
SECR stands for Streamlined Energy and Carbon Reporting, it stemmed from The Companies Act (2006) which was updated in 2013 to require quoted companies to report annual emissions in their directors’ report.
In 2018, the regulations were updated and an additional disclosure requirement for quoted companies was brought in. They now require energy use and associated GHG emissions to be reported by quoted companies, as well as by large, limited liability partnerships (LLPs).
Why was it introduced?
To increase awareness of a business’ energy use and emissions and to encourage the introduction of initiatives to reduce energy usage.
To provide organisations with the relevant data to make informed decisions.
To help increase visibility to key decision makers who may not have been aware of how much carbon their organisation is producing.
Provides transparency on an organisation’s emissions and energy use to external stakeholders.
Is it applicable to you?
SECR reporting is designed to apply to all quoted companies in the UK, as well as unquoted companies and LLPs defined as ‘large’ under the Companies Act 2006.
To be defined as ‘large’ under the Companies Act and therefore qualify for SECR reporting they must meet 2 or more of the following criteria:
- Have a turnover of £36m or more.
- Have a balance sheet of £18m or more.
- Have 250 or more employees.
Who does it not apply to?
Low energy users, those using less than 40MWh per year.
If disclosing energy use data could inadvertently reveal sensitive information about your business, or seriously detrimental to the interests of your business.
Not all public bodies are required to report.
If your data would not be practical to obtain.
What needs to be included?
This is where it gets slightly more complex as this is where reporting guidelines specify what you must report depending on if you are a quoted company compared to a large unquoted or LLP.
Similarities (what everyone needs to report):
- Their energy use in kWh and GHG emissions in tonnes of CO2 equivalent.
- Scope 1 and scope 2 emissions you are responsible for and a subset of scope 3 emissions relating to transport.
- Methodologies, at least one intensity ratio and finally, everyone must report on energy efficiency improvements.
- A key difference between quoted companies and the other two types is that quoted companies must reference their global Scope 1 and 2 emissions they are responsible for, and what proportion of their emissions comes from international sources.
- For unquoted companies and LLPs there is more of a focus on Scope 3 emissions. You will need to report on the energy and emissions associated with Scope 3 transport. This mainly refers to leased road vehicles and vehicles staff own but use for business purposes (grey fleet), but also covers larger vehicles such as ships, planes and trains if you have directly paid for the fuel yourself.
What are the benefits for your organisation?
You would have quantified a significant proportion of your emissions, which paints a good picture of where your largest emission sources are from.
You would have just taken one of the first steps towards achieving carbon neutrality.
SECR also helps provide greater transparency for investors and other stakeholders.
It also supports other reporting such as ESOS and the new requirement for businesses looking to obtain large government contracts to have a carbon reduction plan in place.
How can Blackmores help?
By quantifying your emissions for your reporting period, in the long term we can help quantify any remaining emissions that are not referred to in SECR, specifically any remaining Scope 3s
We can also help provide clarity on the definitions of each scope and the subcategories within them.
We have various templates that we have created and refined to help simplify the process.
We can produce the SECR report, meeting all the requirements of UK Environmental Reporting Guidance, and as well as the main SECR report, we can produce the summary of your Director’s Report.
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If you’d like further information on how we can help you with Carbon verification, SECR or Carbon Neutrality, check out our Carbonology Service.
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